Ron Leurquin wrote: IMHO, Michael does not fully understand the problem and is on the side of business being allowed to make a buck any way it wants and that the 'buyer should be ware'. I can understand him to some extent, the buyer should be ware, but that is very difficult to do when dealing with lending. I highly doubt any of us that have taken out a home loan actually read all the fine print in all those documents before singing them. We trusted to some extent those with more knowledge of the circumstances to not be 'taking advantage' of us.
That being said, mortgage rates themselves are not the issue with 'predatory lending practices'. The lower your score for lending purposes the higher your interest rate will be. This is not 'predatory' in any way. I for one, do not want to live in a society that I have to know everything about everything in order to make decisions. When would I ever get work done to make the money needed to buy anything? Laws keep businesses on the straight and narrow to defend consumers from fraud of many kinds. Think about it!!!!!! Mark Anderson replies: My understanding of contract law is that those engaged in a particular business contracting with those outside their business have a greater onus than otherwise required to prove there was a "meeting of the minds." So an innocent who signs a loan agreement based on deceptive practices by a savvy lender already has a legal method to break the contract. So we don't need new laws to make it illegal. I have no objection to statutes that "clarify" what constitutes deception (including requirements on disclosure), and to laws that detail what damages must be paid by the offending party. But we certainly don't need whole new laws making "predatory lending" illegal, when we have a perfectly good law out there already. My biggest concern with organizations like ACORN is their attempt to legislate away the sub prime lending market altogether, as well as their attempt subsidize low credit customers' loans with the loans of higher credit customers. ACORN has tried to force banks to lend to customers with lower credit ratings. But I question whether ACORN would agree that the banks should charge interest rates commensurate with the banks' increased risks. That would be "predatory lending!" If the banks are required to lend to high credit risks at low rates, then to survive the banks must increase rates to their low risk customers. That essentially constitutes a hidden tax on high credit customers. I think that high interest rates themselves often lead to charges of "predatory lending." There were attempts to outlaw rent-to-own places a number of years ago. The agreements often amounted to loans for furniture and such. The complaint was that the interest rates were "unreasonable" and so should be illegal. If they were outlawed, then people with perfectly good reasons for using these services couldn't use them. They'd have to go outside the law to borrow money from thugs. One of the unintended consequences of trying to legislate away the free market. Mark V Anderson Bancroft REMINDERS: 1. Be civil! Please read the NEW RULES at http://www.e-democracy.org/rules. If you think a member is in violation, contact the list manager at [EMAIL PROTECTED] before continuing it on the list. 2. Don't feed the troll! Ignore obvious flame-bait. For state and national discussions see: http://e-democracy.org/discuss.html For external forums, see: http://e-democracy.org/mninteract ________________________________ Minneapolis Issues Forum - A Civil City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[email protected] Subscribe, Un-subscribe, etc. at: http://e-democracy.org/mpls
