Lenders may be held legally responsible for mistakes made during the initial approval process and throughout the life of the loans they make. Lender liability issues were at the heart of the subprime mortgage crisis that began in 2007. Understanding the legal implications of various approaches to lending can help you and your company to avoid litigation that can tie up financial resources and reduce your productivity. Retaining the professional services of an established Sugar Land real estate law firm can help you stay on the right side of the law throughout these transactions. Here are some of the most common forms of lender liability.
Failure to Act in Good Faith
Especially in the mortgage industry, failing to act in the best interests of the borrower can sometimes allow litigation on the basis that the lender did not act in good faith when entering into the loan agreement. While lending institutions are entitled to make a profit, they cannot do so by making misleading statements or applying undue pressure to borrowers. Many of the lawsuits surrounding the subprime mortgage crisis involve allegations of misrepresentation on the part of the lender when offering loan terms to prospective borrowers. Working with a qualified Katy small business attorney can prevent these lender liability law issues from arising and can ensure the most positive outcomes for all parties to these lending arrangements.
Breach of Contract
Failure to adhere to the terms of the lending contract can also cause litigation issues for financial institutions and private lenders. Making sure that all actions are performed in accordance with the fine print of the mortgage or lending agreement can help lenders prevent issues associated with allegations of breach of contract during the course of these financial agreements.
Improper Foreclosure Proceedings
When a borrower fails to make mortgage payments on time, the lender often begins the process of foreclosure on the property and sale of this collateral. A qualified Katy real estate law firm can help you to ensure that every aspect of this process is conducted in compliance with applicable regulations and consumer protections. This can help you to avoid liability litigation when managing your mortgage lending arrangements.
The civil litigation experts at Lambert & Jakob can provide you with the guidance and support needed to ensure that your real estate transactions go smoothly and according to plan. By entrusting your complex business issues to these knowledgeable professionals, you can enjoy greater peace of mind during routine and complex situations alike. Contact us today at 713-640-5700 to set up your initial consultation. We look forward to the opportunity to provide the legal expertise and guidance you need.