What is Lender Liability and what do lenders need to be aware of to protect against it?
Lender liability is an informal term referring to various manifestations of actual or potential legal liability arising from the conduct of a financial institution lender. Generally, lender liability arises from allegations that a lender has violated a duty (whether implied or contractual) of good faith and fair dealing owed to the borrower or has assumed a degree of control over the borrower resulting in the creation of a fiduciary duty owed to the borrower or its other creditors or shareholders. In Florida, lender liability claims have relied largely upon traditional legal theories. Lender liability claims are best broken down by Contract, Tort, and Statutory theories of recovery: Breach of Contract claims- Breach of Contract claims are the most common claims brought by borrowers against lenders. These claims are often based on disputes of whether the lender has breached or waived written preconditions that otherwise support its position. Lenders are often held accountable with faili
