Question

At closing, the buyers realizes that the lender changed the terms of the loan, but since he was facing foreclosure, he felt he had no choice but to go ahead with the refinance or lose the house. This could be an example of _____________.

A. Undue pressure.
B. Predatory lending.
C. Rescission.
D. Due-on-sale clause.

Answer 1

The situation described could be an example of predatory lending, which involves unethical practices used by lenders to deceive or exploit borrowers through unfair loan terms.

Step-by-step explanation:

The situation described in the question could be an example of Predatory lending. Predatory lending refers to the unethical practices used by lenders to deceive or exploit borrowers, often through unfair loan terms.

In this case, the buyer is facing foreclosure and feels pressured to go ahead with the refinance, even though the lender changed the terms of the loan. This indicates a lack of transparency and fairness on the part of the lender, which aligns with the characteristics of predatory lending.

It's important for borrowers to be cautious and aware of their rights to avoid falling victim to predatory lending practices.