Asset Based Lending
Reader comment on: Elizabeth Warren's Line of Credit
Submitted by David Weinkrantz (United States), Feb 8, 2021 19:58
"Democrats often talk about wanting to crack down on "predatory" lenders, as if the lenders are out looking for non-credit-worthy individuals to loan money to."
Lenders have made loans to individuals secured by a mortgage on the land and home of the borrower, where the lender was aware that the borrower could not afford to repay the loan from his own income. In these cases, the lender planned to foreclose on the property to repay the loan.
I was told that there are cases where if the lender sells a say $100,000 house to repay a $10,000 loan. The lender is not required to return $90,000 to the former homeowner.
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