Its not my business and nothing i have to do with but i don't get the idea about any red trust based on selling the collateral you providing for loan request. [...] I would like to understand why that's something which should be punished with red trust. [...]
Let's see:
collateral (kɒˈlætərəl; kə-)
1. (Banking & Finance)
a. security pledged for the repayment of a loan
So while the loan is still outstanding, the "collateral" is still "pledged". If someone tries to sell the collateral while the loan has not been payed in full (plus interest, if agreed upon), that person is deemed to be either a) stupid (which justifies a negative trust rating so people know not to do business with that person) or, b) untrustworthy (which justifies a negative trust rating so people know not to do business with that person)...
Isn't the collateral will be in deposit to the person who give the loan or escrow so the person who needs loan can't actually do anything with it ?
So searching to sell the collateral and also offer it for loan in same place its not something that can affect the person who give the loan or i am wrong?
Soon as the escrow or the person who give the loan takes the collateral, the person who needs loan can't do anything with it because its not in his position.
So i understand so far searching for the best way to earn fast money either ask for loan with valid collateral and in same place selling the collateral is something wrong.
I guess the person who needs loan searching for the fastest way to get this money either by loan with collateral or sell the collateral.
The only bad thing leaves here that the person who request the loan proves he's not even thinking to repay his loan consider he's also selling his collateral.