Predatory Lending

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Canada The sub-prime market did not take hold in Canada to the extent that it did in the U.S., where the vast majority of mortgages were originated by third parties and then packaged and sold to investors who often did not understand the associated risk. Subprime Crisis The subprime mortgage crisis arose from 'bundling' American subprime and American regular mortgages into MBSs that were traditionally isolated from, and sold in a separate market from, prime loans. These 'bundles' of mixed (prime and subprime) mortgages were based on asset-backed securities so the 'probable' rate of return looked superb (since subprime lenders pay higher premiums on loans secured against saleable real-estate, which was commonly assumed "could not fail"). Many subprime mortgages had a low initial interest rate for the first two or three years and those who defaulted were 'swapped' regularly at first, but finally, a bigger share of borrowers began to default in staggering numbers. The inflated house-price bubble burst, property valuations plummeted and the real rate of return on investment could not be estimated, and so confidence in these instruments collapsed, and all less than prime mortgages were considered to be almost worthless toxic assets, regardless of their actual composition or performance. Because of the "originate-to-distribute" model followed by many subprime mortgage originators, there was little monitoring of credit quality and little effort at remediation when these mortgages became troubled. To avoid high initial mortgage payments, many subprime borrowers took out adjustablerate mortgages (or ARMs) that give them a lower initial interest rate. But with potential annual adjustments of 2% or more per year, these loans can end up costing much more. So a $500,000 loan at a 4% interest rate for 30 years equates to a payment of about $2,400 a month. But the same loan at 10% for 27 years (after the adjustable period ends) equates to a payment of $4,220. A 6-percentage-point increase (from 4% to 10%) in the rate caused slightly more than a 75% increase in the payment. This is even more apparent when the lifetime cost of the loan is considered (though most people will want to refinance their loans periodically). The total cost of the above loan at 4% is $864,000, while the higher rate of 10% would incur a lifetime cost of $1,367,280. Page 30 of 181
II. The Poverty Industry, Economic Inequality, and Redlining The Poverty Industry The terms Poverty Industry or Poverty Business refer to a wide range of money-making activities that attract a large portion of their business from the poor because they are poor. Businesses in the poverty industry often include payday loan centers, pawnshops, rent-to-own centers, casinos, liquor stores, lotteries, tobacco stores, credit card companies, and bail-bond services. Illegal ventures such as loansharking might also be included. The poverty industry makes roughly US$33 billion a year in the United States. In 2010, elected American federal officials received more than $1.5 million in campaign contributions from poverty-industry donors. Income Inequality Economic Inequality is the difference found in various measures of economic wellbeing among individuals in a group, among groups in a population, or among countries. Page 31 of 181
Page 1 and 2: The e-Advocate Monthly …a Compend
Page 3 and 4: The Advocacy Foundation, Inc. Helpi
Page 5 and 6: Dedication ______ Every publication
Page 7 and 8: The Transformative Justice Project
Page 9 and 10: 1. The national average cost to tax
Page 11 and 12: The Advocacy Foundation, Inc. Helpi
Page 13 and 14: Biblical Authority ______ Luke 6:34
Page 15 and 16: Table of Contents …a compilation
Page 17 and 18: I. Introduction Predatory and Subpr
Page 19 and 20: have not only misled borrowers but
Page 21 and 22: Predatory Lending Towards Minority
Page 23 and 24: Underlying Issues There are many un
Page 25 and 26: In an article in the January 17, 20
Page 27 and 28: Ohio, Oklahoma, Oregon, Pennsylvani
Page 29: United States Although there is no
Page 33 and 34: Individual earnings inequality amon
Page 35 and 36: Changes in the structure of househo
Page 37 and 38: substantial privilege". A 2017 repo
Page 39 and 40: of 30 or above is considered medium
Page 41 and 42: Theoretical Frameworks Neoclassical
Page 43 and 44: explain the accumulation of wealth
Page 45 and 46: economy. Lagerlof and Galor stated
Page 47 and 48: On the other hand, Jonathan Rothwel
Page 49 and 50: Economic Development A Kuznets Curv
Page 51 and 52: Since rent seeking aims to "pluck t
Page 53 and 54: In their book, Social Epidemiology,
Page 55 and 56: economic inequality from previous r
Page 57 and 58: Others dispute the importance of co
Page 59 and 60: NYU economist William Baumol found
Page 61 and 62: effects were eliminated by using pa
Page 63 and 64: Equitable Growth While acknowledgin
Page 65 and 66: cases, with great economic inequali
Page 67 and 68: unequal. In both cases, the cause i
Page 69 and 70: Social Justice Arguments Patrick Di
Page 71 and 72: Well-targeted income-support polici
Page 73 and 74: Progressive taxation: the rich are
Page 75 and 76: cities; often they were also black
Page 77 and 78: African Americans in those neighbor
Page 79 and 80: Legislative Action In the United St
Page 81 and 82:
Liquorlining Some service providers
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Mortgages Reverse Redlining occurs
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90s, showing an insensitivity to et
Page 87 and 88:
III. Aprophobia and Economic Discri
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Animosity Racism, sexism, ageism, a
Page 91 and 92:
Most wage discrimination is masked
Page 93 and 94:
Against Businesses Minority owned b
Page 95 and 96:
IV. Payday Lending A Payday Loan (a
Page 97 and 98:
products were not as suggested by t
Page 99 and 100:
orrower him or herself understood t
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Industry Profitability Proponents'
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A 2012 report produced by the Cato
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Australian payday lenders providing
Page 107 and 108:
the practice. The annual percentage
Page 109 and 110:
similar to those of a payday loan;
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V. Refund Anticipation Lending Refu
Page 113 and 114:
would take on average two to three
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Taxpayers themselves will continue
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VI. Title Loans A Title Loan (also
Page 119 and 120:
orrower to visit a store to pick up
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Some lenders can move around the Mi
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VII. Loan Sharks A Loan Shark is a
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lenders with a means of blackmailin
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ootleg lenders could not get credit
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Loan Sharks in Ireland The Central
Page 131 and 132:
money", as well as the debtors' uni
Page 133 and 134:
VIII. Usury Usury (/ˈjuːʒəri/)
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Certain negative historical renditi
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converts to Christianity were no lo
Page 139 and 140:
And for practicing usury, which was
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eceived. The sin rests on the fact
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Federal Regulation On a federal lev
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effort, but is made to bear the ris
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IX. References 1. https://en.wikipe
Page 149 and 150:
Notes _____________________________
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Attachment A What Is Predatory Lend
Page 153 and 154:
How We Can Protect Ourselves from P
Page 155 and 156:
Attachment B Predatory Lending and
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Predatory Lending and the Subprime
Page 159 and 160:
combinations, and only to a specifi
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Our findings have important implica
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ange receive counseling if they cho
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to make approval and/or pricing dec
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operation. To provide some of the f
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the effects of the legislation. We
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is repeated for the next HB4050-are
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performance can be attributed to th
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skeptical of this. The treatment ar
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significantly lowered borrower appl
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standard deviations. Overall, this
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mortgages had adjustable-rate contr
Page 183 and 184:
while Panel D is based on the match
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order to reach an average default r
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ased on soft information collected
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mortgage origination leading up to
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References Abadie, A., Gardeazabal,
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Yandle, B., 1983. Bootleggers and B
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November 2006: - A group of residen
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Table 1. Summary Statistics The tab
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Table 1. Summary Statistics (Cont.)
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Table 2. Effects of HB4050 on Marke
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Table 4. Exit of Lenders Due to HB4
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Table 5. The Effect of HB4050 on Bo
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Table 5. The Effect of HB4050 on Bo
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Table 6. Measuring the Default Rate
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Figure 2. HMDA Loan Application Fil
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Attachment C Subprime and Predatory
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2 C A R S E Y I N S T I T U T E The
Page 217 and 218:
4 C A R S E Y I N S T I T U T E Fig
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6 C A R S E Y I N S T I T U T E •
Page 221 and 222:
8 C A R S E Y I N S T I T U T E BUI
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available come from 357 foreclosure
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Advocacy Foundation Publishers Page
Page 227 and 228:
Issue Title Quarterly Vol. I 2015 T
Page 229 and 230:
Issue Title Quarterly Vol. V 2019 O
Page 231 and 232:
LI Nonprofit Confidentiality In The
Page 233 and 234:
Vol. XVIII 2032 Public Policy LXXVI
Page 235 and 236:
African-American Youth in The May 2
Page 237 and 238:
The e-Advocate Quarterly Special Ed
Page 239 and 240:
Legal Missions International Page 1
Page 241 and 242:
Vol. V 2019 XVII Russia Q-1 2019 XV
Page 243 and 244:
The e-Advocate Newsletter Genesis o
Page 245 and 246:
Extras The Nonprofit Advisors Group
Page 247 and 248:
About The Author John C (Jack) John
Page 249:
Page 181 of 181
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