Congress will pass legislation next year that will make Wall Street financiers civilly liable for funding predatory and reckless mortgage loans, predicted Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee.
Your Instant Payday Loans News Source Quoted With Edits From: A bill to make Wall Street accountable for loans urged (Seattle Post-Intelligencer)
Assignee Liability and Predatory Lending
This article raises the issue regarding “Assignee liability”. Assignee liability is the term used to hold individuals responsible for holding or buying a predatory loan. This follows in the wake of this years financial crisis and if implemented will help prevent a further one from happening.
What is Predatory Lending and Predatory Loans?
Predatory Lending although not clearly defined by legal law, it’s practices are. Wikepedia best defines predatory lending as quoted below:
“the practice of a lender deceptively convincing borrowers to agree to unfair and abusive loan terms, or systematically violating those terms in ways that make it difficult for the borrower to defend against.”
Although, a legal agreement is formed and signed between two parties of a predatory loan, it’s the predatory lender’s deception in taking advantage of a less informed borrower that terms a loan as predatory.
Why the need for Assignee liability
Can Assignee Liability Tame the Bull? Or will everyone need Instant Payday Loans?
The financial crisis that we are currently enduring was largely caused in part by Wall Street’s aggressive marketing of mortgage backed securities. These securities as the article states, were each made up of thousands of high risk sub prime and nontraditional loans. This ultimately led to the expansion of high risk predatory lending followed by the pandemic of foreclosure and defaulted loans that we have seen sweep the country.
Assignee liability will bring accountability to everyone including wall street in regards to high risk predatory loans.
What next and what to watch for…
If there is anything good that has come out of this crisis, assignee liability seems to be one of them. Until the laws are properly defined and the written we won’t be able to see just how much will be affected by it’s implementation. We want to be careful as not to invite anymore government regulation into our life as necessary yet ensure our own protection from such practices as well.
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