Lender Liability Info from a Financial Expert Witness

When a borrower or prospective borrower sues a lender for violation of state or federal statutes, breach of contract, or other wrongful behavior, this is lender liability. Victims of lender liability will usually seek legal counsel to try to protect themselves from the lender when they are no longer acting in good faith. Usually, these lawsuits require the assistance of a financial expert witness. This financial expert will evaluate the lender's practices against the legal and industry standards and help the attorney better understand if there is a case—and how to approach it.

Lender liability laws are constantly evolving. Today, the standards and regulations allow borrowers to hold lenders much more accountable than they have in the past. That means it is more common to see lender liability cases taken to court for such instances as:

  • Claims in Contract – Claims that typically relate to allegations of a breach concerning conduct during loan administration, pre-loan conduct, and conduct when the loan is in trouble
  • Claims in Tort – Claims founded on civil wrongs arising from the lender’s behavior, including negligence, economic duress, fraud, or misrepresentation
  • Common-Law Claims – Claims due to a breach of the fiduciary duty owed in a relationship
  • Statutory Provisions – Claims based on state or federal laws