Florida Banking Litigation: Lender Liability Claims
Under Florida law, loan originators and mortgage brokers have many legal duties. One overriding duty is an obligation to treat all borrowers fairly. If a financial lending institution fails to live up to this obligation, they may be held liable for damages incurred by the borrower. This is known as a lender liability claim. While lender liability cases can come in a number of different specific forms, most occur as a result of the lender’s alleged breach of contract. If you are involved in a lender liability dispute, please contact an experienced West Palm Beach banking litigation attorney today to discuss your rights and legal options.
Lender Liability and Breach of Contract
Ultimately, a loan is simply a contract between a lender and a borrower. As such, both parties are responsible for holding up their end of the bargain. Obviously, this means that lenders can take legal action against a borrower if a borrower fails to make timely payments. Most people are familiar with that concept. However, many people do not realize that borrowers can also take legal action against a lender. If a lender breaches any party of a loan contract, they may be held liable.
What’s in a Loan Contract?
The most important terms of a lending contract can be found within the loan commitment. This includes many key details, such as:
- The names and identifying information of the parties involved;
- The amount of the loan;
- The terms of the interest rate;
- The length of the loan; and
- Any precedent conditions.
If the lender deviates in any way from the precise terms spelled out in the loan commitment, the lender may be held liable for breach of contract. However, it is also important to note that the terms of the contract are not the only factors that govern a lending agreement. Lenders are also obligated to act in good faith, comply with rules of fair dealing, and follow all other relevant aspects of Florida lending law.
Examples of a Lender Breach of Contract
A lender’s breach of contract can come in many different forms. A lender may be held liable for breach of contract if they engage in any of the following:
- Failing to honor the terms of the loan commitment documents;
- Failing to offer a loan renewal;
- Forcing a technical default;
- Foreclosing in an improper manner;
- Issuing an improper default notice;
- Bearing responsibility for a material defect within the loan documents;
- Improperly accelerating the loan;
- Wrongfully interfering with the contract; and
- Breaching a fiduciary duty owed to the borrower.
If your lender engaged in any of those practices, or any other practice that violated your contract or their obligations of good faith and fair dealing, you could be entitled to compensation. An experienced attorney should review your case to determine how you should proceed.
Contact Our Office Today
At Pike & Lustig, LLP, our attorneys have handled many banking litigation cases, including lender liability claims. If you are involved in a lender liability dispute, please contact our West Palm Beach office today at (561) 291-8298 to schedule a free evaluation of your case. We represent businesses and individuals throughout South Florida, including in Miami and Fort Lauderdale.