Lender Liability Claims – Why You Should Take a Lender to Court

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For some time, lenders were the only ones that had the liberty to sue borrowers for breach of a loan agreement. What if your inability to honor the agreement can be blamed on the lender? Well, you do not have to suffer anymore when you are convinced that the lender is to blame. Ideally, the lender liability law serves to protect borrowers from unfair treatment or breach of contract from the lender’s part. That said, here are possible reasons to sue your lender.

Failure to renew a loan

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Lenders have been notorious for renewing short-term notes. As such, they impose the changes to the borrowers and force borrowers to sign additional personal guarantees. Ideally, this often happens when the borrower has limited options for securing alternative finances. Based on the principle of good faith, it is unacceptable for a lender to decide not to award the loan in the 11th hour or demand additional collateral.

Improper default notices

Commercial loan documents tend to be quite bulky, which makes it almost impossible for a borrower to pick up every detail shared there. To make matter worse, the clauses in this document are often in the lender’s favor. Unfortunately, some lenders tend to rely on negotiated technical details as a way of acquiring the portfolio of their customers. The good thing is that courts can easily distinguish between payment and technical defaults.

Improper acceleration

Every loan document has an acceleration clause. Ideally, the essence of having these provisions on the policy documents is to allow the lender accelerate amounts due under the loan. Ideally, the entire balance often becomes due instead of the missed payment. Most borrowers are usually well aware of this provision. However, some loans have some grace period. Thus, defaults in loans with some default can give you considerable leverage when filing for a lender bad faith claim.

Improper foreclosures

foreclosure stressThe number of foreclosure cases is always on the rise. The good thing is that you can always file a claim against wrongful foreclosure. Ideally, the wrongful foreclosure case law looks at things like improper standing, pre-foreclosure conduct, lenders foreclosure conduct, and lenders conduct in the origination and underwriting process.

If you are convinced that your lender acted in bad faith in initiating a foreclosure, you need the services of a lender bad faith lawyer. These professional have the experience needed to get a fair ruling against a bad faith lender.