Sentences with phrase «irresponsible lending»
"Irresponsible lending" refers to the practice of a lender giving loans or credit to individuals or entities who may not have the ability to repay them. This can lead to financial difficulties for the borrowers and potentially even economic instability, as it increases the risk of loan defaults and financial crises. Full definition
High default rates are merely a symptom of irresponsible lending practices.
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The # 2 billion payday loan industry was accused by its regulator of widespread irresponsible lending earlier this year.
Although some lenders have been accused of irresponsible lending recently, there are still two parties involved.
But they represent the type of irresponsible lending that spread like a plague during the years leading up to the crisis.
There is, however, a dark side to the consumer credit market, fuelled by convenient access to credit, eg record levels of consumer debt, an increase in irresponsible lending practices, ineffective legislative protection of consumers and financial exclusion.
[26] Maude, «who has railed against irresponsible lending by banks and mortgage companies», was accused of hypocrisy for receiving more than # 100,000 as a director of a company that has profited from sub-prime mortgages.
So, the system tacitly promotes irresponsible lending.
In efforts to prevent losses associated with irresponsible lending practices, FHA is emphasizing enforcement of FHA requirements and is increasing its review of FHA approved lenders.
Irresponsible lending caused problems for lenders and borrowers: problems worsened by the effect of complex financial instruments created out of the packaging of bundles of often worthless sub-prime or «toxic» loans.
«This underscores the importance of mortgage availability to creditworthy home buyers, and the need to return to the safe, sensible underwriting standards that were in place before irresponsible lending led to the boom and bust cycle,» Phipps said.
Overbuilding and irresponsible lending ruled the day back then.
The government has also proposed more key changes to disclosures which would further clear up common confusions, and include more prohibitions against irresponsible lending.
«But the G - 8 must recognize that the issue of irresponsible lending and illegitimate debt begins first and foremost with themselves.»
As part of the rules to define what constitutes «fraudulent» or irresponsible lending, mortgage debt service should be reduced to the rate that FDIC head Sheila Bair recommended: 32 percent.
During the past decades of irresponsible lending, creditors threw credit around like candy in markets where the credit was dischargeable in bankruptcy (such as credit cards) and those where it was harder to write off debts in bankruptcy.
Ironically, one of the main factors driving this current economic downturn (recession) was the irresponsible lending practices of the mortgage and credit card companies.
Irresponsible borrowing was matched by irresponsible lending.
It puts behind us once and for all the kind of irresponsible lending that disrupted the housing market and so badly damaged our economy, and it provides strong new consumer protections while preserving needed access to mortgage credit,» he said of the rule and its Qualified Mortgage standard.
The primary mortgage market in the United States was unfortunately experiencing a high level of irresponsible lending and borrowing in prior years, ultimately becoming the cause of our great recession.
While nobody wants a return to the irresponsible lending that proliferated in the last decade, pulling back on a few regulatory levers would stimulate demand, especially in a number of markets where an increase in qualified buyers is most needed.