# Predatory Lending

> Predatory Lending shows how individually rational actions can compound into systemic harm

| Field | Value |
|---|---|
| Stable ID | `node:kiduna:real-estate-mortgage:market-pathologies:predatory-lending` |
| Family | Market Pathologies |
| Domain | Economics |
| Era | Institutional Age → Agentic Age |
| Kind | concept |
| Archetype | The Relation |
| Claim layers | empirical, cultural_historical, synthesis, interpretive, symbolic_divinatory |

## What it is

Predatory Lending is a concept in the Market Pathologies family, defined here by the function it performs in the property system rather than by label alone.

## What it actually does

Predatory Lending shows how individually rational actions can compound into systemic harm.

## Why it exists

It exists because place is unique and immovable while law, capital, information, and human lives must still coordinate around it across time.

## System mechanics

- **Who uses it:** owner, occupant, buyer, seller, lender, investor, steward, regulator
- **Incentives:** access, certainty, control, value, continuity
- **Inputs:** place, people, records, rules, resources, time
- **Outputs:** rights, constraints, uses, relationships, consequences
- **Dependencies:** Land, Authority, Information, Capital, Time

## Archetypal reading

- **Essence:** Predatory Lending shows how individually rational actions can compound into systemic harm
- **Gift:** Clarity about predatory lending makes a hidden allocation of place, time, authority, value, or risk available for deliberate choice.
- **Wound / Shadow:** When predatory lending is treated as neutral or inevitable, its costs can be shifted to people who hold less information, authority, liquidity, or mobility.
- **Failure mode:** The failure mode appears when predatory lending is stale, opaque, mispriced, misrecorded, overextended, or applied outside the conditions that made it useful.

## Lenses

- **Personal:** Notice where predatory lending appears as a structure in your own commitments: what is held, promised, priced, protected, excluded, or deferred?
- **Business:** Predatory Lending reveals a handoff among information, authority, incentives, operating work, and capital. Make the owner of each handoff explicit.
- **Financial:** Predatory Lending changes the timing, priority, comparability, liquidity, or distribution of cash flow and risk.
- **Property:** Predatory Lending changes how a physical place can be used, valued, financed, transferred, occupied, maintained, or reclaimed.
- **Community:** Predatory Lending can create benefits inside one parcel while exporting costs or opportunity to neighbors, institutions, or future residents.

## Divination

The Relation enters the reading through Predatory Lending. The issue is not only what is visible; it is which map of ownership, time, risk, authority, or belonging currently governs the situation.

**Question:** What changes when Predatory Lending becomes the unit of analysis?

**Guidance:** Shift scale, clock, stakeholder, boundary, and claim layer before choosing a move.

## Game function

Creates a graph move that changes the active map. Initiative 1.

## Relationships

- **Straw Buyer enables Predatory Lending.** Straw Buyer enables Predatory Lending through a change in rights, information, cash flow, priority, timing, or physical use.
- **Negative Amortization is governed by Predatory Lending.** Negative Amortization is governed by Predatory Lending through a change in rights, information, cash flow, priority, timing, or physical use.
- **Predatory Lending externalizes to Adverse Selection.** Predatory Lending externalizes to Adverse Selection through a change in rights, information, cash flow, priority, timing, or physical use.
- **Predatory Lending prices Home Owners' Loan Corporation.** Predatory Lending prices Home Owners' Loan Corporation through a change in rights, information, cash flow, priority, timing, or physical use.

## Oppositions

- Use Value versus Exchange Value
- Speed versus Diligence

## Historical lineage and regulatory context

Read Predatory Lending through the lineage of Market Pathologies: earlier customary or local arrangements became recorded, standardized, financed, regulated, digitized, or contested over time.

Rules vary by jurisdiction and transaction. Use the cited primary sources as starting points and verify current local law, program guides, contracts, and professional standards before operational use.

## Visual direction

Text-free rounded-square enamel artifact for Predatory Lending: one dominant symbolic mechanism with a restrained secondary counterforce; vitreous midnight enamel, blackened steel, warm brass, copper accents, mortgage-paper cream, deep green, slate, and sky blue.

## Engine output / Sentinel handoff

The generative interpretation above is preserved as Engine Output. Sentinel factors: jurisdiction-specific rules, factual uncertainty. These factors request contextual review; they do not delete or silently rewrite the candidate.

## Research / provenance

- [The Financial Crisis Inquiry Report](https://www.govinfo.gov/features/financial-crisis-inquiry-report) — Financial Crisis Inquiry Commission / U.S. Government Publishing Office; causes and mechanisms of the 2007–2009 financial crisis.
- [The Future of Mortgage Finance in the United States](https://www.federalreserve.gov/newsevents/speech/bernanke20081031a.htm) — Board of Governors of the Federal Reserve System; securitization, GSEs, underwriting, leverage, crisis.
- [Risk Management Manual — Commercial Real Estate Lending](https://www.fdic.gov/risk-management-manual-examination-policies/commercial-real-estate-lending) — Federal Deposit Insurance Corporation; CRE underwriting and risk management.
