Preditory Business Practice - Essay Example

The bad thing with predatory lending that the borrower is left at a very big economic disadvantage, and this in most cases ends up disrupting their financial and economic stability. The fact that these bad loans are given to so many people mean that when these people are financially disrupted, the economy at the end will suffer (Moses, 2010). There is a debate of who should carry the blame and bear the responsibility with regard to such loans. The truth is that the loan originators use very aggressive and sometimes methods that border the illegal practices to be able to lure the borrowers.

Most people do not have an inside understanding of how finances work and if the lenders refuse to disclose all the implications of the contract that a customer enters into when taking such a loan the borrower can end up entering into a predatory relationship. The loan may look attractive to the borrower while the truth is that it is very harmful and it will eventually place them at a point of disadvantage. However, both the borrower and the lender can be seen has bearing some level of reasonability when such a loan turns out to be a predatory loan.

The lenders or the originators of these types of loans should bear some responsibility in that they cheat the customer to think that the loan is going to be simple to pay off and that it will leave them at an advantage. Most of these subprime lenders do not consider the customer’s interest when giving such loans but instead only look for ways to benefit them. In most cases, it is the loan brokers who benefit the most, sometimes even more that even the lenders themselves. In such a case, they have to bear the responsibility for not carrying out fair business activities.

If a relationship between a lender (or a loan originator) can be said to be a contract, then the lenders may need to bear some of the