Which term describes unscrupulous actions by lenders that induce borrowers into high-fee mortgages?

The term that accurately describes unscrupulous actions by lenders that induce borrowers into high-fee mortgages is predatory lending. This practice involves tactics that coerce or deceive borrowers into agreements that are unfavorable, often including hidden fees or unfavorable loan terms. Predatory lenders may target vulnerable populations, taking advantage of their lack of financial literacy or urgent circumstances, such as the need for quick cash or poor credit histories.

Predatory lending practices can include inflating fees, providing loans that borrowers cannot afford, and failing to disclose loan terms clearly. This leads to long-term financial distress for the borrower, as they may end up in a cycle of debt due to high fees and interest rates.

Understanding predatory lending is critical as it highlights the need for regulations that protect consumers from exploitation in the mortgage market. This is particularly relevant in discussions about ethical lending practices and the overall stability of financial markets.