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Real Estate Law Paulie Purchaser is in the process of obtaining lending to buy his $200,000.00...

Real Estate Law

  1. Paulie Purchaser is in the process of obtaining lending to buy his $200,000.00 home. Paulie was ecstatic when the bank told him that he could afford the payment structure even though the bank knew that he never could. In the loan documents, the bank included hidden balloon payments and a few unnecessary fees so they could actually make some money off of the loan. Which of the following is correct:

           

  1. This loan is unlawful because it is predatory.
  2. This loan would be held to be lawful if after the first year Paulie does get a raise as the bank thought he would therefore allowing him to make all of the payments on time.
  3. This loan is an example of unconventional financing and would be held to be lawful even if it isn’t standard practice.
  4. This loan is an example of creative financing, but would held to be unlawful because of the balloon payment.
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Answer #1

a. This loan is unlawful because it is predatory.

This is unlawful as this is done without the knowledge of Paulie and is also predatory as well.

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