Financing Disputes – Lender Liability Actions

Disputes arising out of a borrower’s failure to repay a loan are common. Financing agreements often contain several lender-friendly provisions designed to streamline the lender’s path to obtaining a judgment, and collection and hamper the borrower’s (or guarantor’s) ability to mount a defense.

These provisions are usually enforced. In addition, some courts, such as the New York state courts, provide expedited procedures for actions where lenders may bring simple claims based upon promissory notes, or other instruments.

However, in some unique cases, lenders may engage in problematic activity out of court that either compromises their ability to take advantage of the protections or even exposes the lender to liability. These defenses and claims based upon theories of lender liability are difficult to prevail upon, and people will need to consult an attorney who is familiar with these claims to truly understand their options.