Avoiding and Mitigating Lender Liability

Occasionally, our financial institution and commercial lending clients face lender liability claims from their borrowers. These claims may include allegations that the lender violated its duties and obligations (contractual or implied), allegations that the lender has assumed control over the borrower invoking fiduciary duties, wrongful foreclosure claims and other lender liability claims, including:

  • Wrongful refusal to renew loans or fund loans
  • Wrongful refusal to honor loan commitments or alleged deals that are not clearly documented
  • Negligent processing or administration of loans
  • Threatening enforcement actions that cause the borrower to act against its interests
  • Selling borrowers' collateral for under fair market value
  • Misrepresenting borrowers to other creditors or credit bureaus
  • Interfering with borrowers' business operations or relations with third parties
  • Improper foreclosure procedures

Our attorneys in both Dallas and Houston possess considerable experience responding to and litigating against lender liability claims in Texas.

Many borrowers believe that they should not be held fully responsible for repaying the indebtedness due under their loan agreements, and they will engage in efforts to avoid their obligations. Our attorneys are experienced in addressing the legal issues raised by these borrowers.

How Will Our Law Firm Help You?

Our lawyers' involvement with your lending team can begin with your lending strategies, principles and document preparation. We help protect clients against claims of contract breaches and lender misconduct at the inception of a lending relationship.

In the event of loan defaults, we counsel clients regarding collection options and strategies, including:

  • Loan workouts
  • Loan modifications
  • Forbearance arrangements
  • Collection lawsuits
  • Foreclosures
  • Dispositions of collateral

In many of these areas, we can handle interactions with borrowers directly on your behalf.

It is critical for lenders to retain comprehensive records, separate the work of loan officers and workout officers, follow financial privacy laws, honor all qualified commitments and avoid guiding borrowers' financial decisions too closely.

Our lawyers can be reached at 214-979-7400 or through our secure online form. Please call us whether you have questions or would like to schedule a consultation with a lawyer. We look forward to speaking with you.