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9 - A Sub-prime Loan by Any Other Name Is Just as Predatory

Published online by Cambridge University Press:  22 June 2020

Janis Sarra
Affiliation:
University of British Columbia, Vancouver, Peter A. Allard School of Law
Cheryl L. Wade
Affiliation:
St. John's University School of Law
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Summary

Chapter 9 reveals that there are now new iterations of predatory lending in the form of “nonprime loans,” as well as continued abusive practices in mortgage modifications. These loans are now widely offered in the mortgage market and the market has now extended to nonprime auto loans and nonprime credit cards. While the market boasts in its disclosures that the “illegal activities” on zero-deposit mortgages are no longer prevalent, much of the conduct found during the subprime debacle appears to be continuing today. This chapter connects this new burgeoning nonprime market with some of the structural features of financial markets and the treatment of African Americans, portending the risk of another significant financial crisis for African-American and other borrowers. The other recent development is with respect to mortgage modifications themselves. The U.S. government ended its modification programs in 2016 and handed authority for modification back to the private sector.

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Publisher: Cambridge University Press
Print publication year: 2020

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