Wandering Wikipedia - Universal Default
A friend writes: "I've been a little bored today - so I've been brushing up on some payments basics using Wikipedia -- a surprisingly robust source for payments-related topics! Here, for example, is the article on "universal default."
Universal Default is the term for a practice in the financial services industry for a particular lender to change the terms of a loan from the normal terms to the default terms (i.e. the terms and rates given to those who have missed payments on a loan) when that lender is informed that their customer has defaulted with another lender (even though the customer has not defaulted with the first lender). The growing use of this technique is one of the most controversial trends in the financial services industry.Editor's note: I've been known to read (and correct!) a few of the payments-related Wikipedia articles myself!
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