Lender Liability Lawsuit

Lender Liability Lawsuit

A lawsuit between a lender and a borrower alleging that the lender failed to fulfill the loan contract. For example, a customer may sue his/her bank for not providing a mortgage after the mortgage contract was signed. However, most lender liability lawsuits involve a person or firm suing a creditor for pursuing the debt so aggressively that it drove the person or firm into bankruptcy. Most suits derive from a claim that the creditor did not act in good faith, rather than a claim of specific violation of the lending agreement. During the 2008 credit crunch, it became increasingly common for construction companies to sue banks under lender liability for not providing promised funding.
References in periodicals archive ?
While the increased foreclosure and repossession activity related to the economic downturn have increased risk, it is also important to note other actions that can trigger a lender liability lawsuit against a credit union.
The lower revenues reported in 1991 compared to 1990 were primarily caused by the impact on business resulting from the lender liability lawsuit and the resulting bankruptcy filing of INDE's operating subsidiary in August of 1991.
Operating loss contributors were: a reserve of $75,000 established to mitigate a future expected expense to settle an arbitration case brought by a borrower against both the Bank and the purchaser of a loan sold in 1995 and on which the Company acted as servicing agent until it was paid in December 2000 (Fine Particle Related Action); an unexpected payment of $50,000 was provided to settle a long standing lender liability lawsuit (Fischer Action); a $17,000 loss was incurred on the sale of securities as the Bank transitioned from investment securities to loans and a $37,000 interest payment to the State of California to cover a 2000 disputed but determined income tax expense related to the Bank's substantial check fraud discovered that year.
CPM has filed a Lender Liability lawsuit against the bank in the New Hampshire court system in an effort to recover the extensive losses and damages that CPM has suffered from the misconduct of the bank.
In the lender liability lawsuit, filed in State Circuit Court today, the developer, Harbor Court Developers, alleges that Mitsui Trust and the other lenders have obstructed the progress and operation of the development for some time.
By 1989, more than 400 so-called lender liability lawsuits had been filed.