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Ruzich and Grant evolved a theory of predatory lending and AmericanDream that emphasized that the use of a metaphor predatory lendingled to a decline of subprime mortgage crisis. This theory wasdeveloped in conclusion of the article Predatory Lending andDevouring of American dream by analyzing how the metaphor has beendistracted from contributing factors like gender, race, psychologicalmotivations and the nature of American capitalism. The housing crisiswas due to the cumulative effect of predatory lending andovercharging borrowers.
The metaphor of predatory lending and the effects on the mortgagecrisis were the first arguments of Ruzich and Grant. They arguedthat the American dream has fallen, most people are losing theirproperties and investments due to predatory lending acts, and thishas caused conflicts in the American society. A survey of economistsconcluded that the effects of the mortgage crisis are the greatestthreat to Americans as compared to terrorist and conflict in MiddleEast. Americans form biased opinions on the mortgage crisis due topredatory lending. One would easily believe that lenders arepredators while the borrowers are the victims. These victims arethose facing financial difficulties. According to the authors,subprime mortgages are loans attracting a higher interest rate toborrowers that have led to the economy downfall.
A national columnist Bob Herbert explains that the American dream isa nightmare and stresses the importance of federal borrowersprotection agency that will ensure that the public is safe fromunscrupulous bankers and the lender`s lending practices. Cal Thomasblames the failing Americans dream on government. He believes thatthe society is too dependent on government leaders allowingpoliticians to influence their sense of self-reliance. Cal explainsthat achieving American dream will be achieved by those with highmorals and good conduct in the society.
Different options were considered in order to increase loans toborrowers who were initially considered poor credit risks. Forinstance, a change in federal government laws changed the mortgagepractices and homeownership opportunities to the American society.Further, technology changes in loan application and approval ofmortgages advanced leading to an increase in the number ofinstitutions offering loans. Since 1980s, the American economy hasbeen free of inflation and recession.