Finance
What is 'predatory lending' and how does it affect Illinois homeowners?
ALending to borrowers with perfect credit who don't need the loan
BUnfair, deceptive, or abusive lending practices that trap borrowers in unaffordable loans with excessive fees, rates, or terms✓ Correct
CGovernment lending programs targeting low-income borrowers
DLending in rural areas where bank branches are limited
Explanation
Predatory lending involves unfair, deceptive, or abusive loan terms that harm borrowers—excessive fees, unconscionable interest rates, loan flipping (repeated refinancing), equity stripping, balloon payments, and prepayment penalties that trap borrowers. Illinois has the Illinois High Risk Home Loan Act and other consumer protection laws to address predatory lending. Predatory lending disproportionately affects low-income, minority, and senior homeowners in Illinois and has contributed to foreclosure crises in Chicago neighborhoods.
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