More Borrowers Prevail

The New York Times article highlights two recent cases focusing on the behavior of banks in the loan administration and collection process and ruling in favor of borrowers. In one case the judge concluded the bank “abused” the borrowers and in another that it “forged” documents. Both cases, however, seem to essentially come back to a consistent theme: David usually prevails over Goliath.

It takes a few years for cases to get to the point of written decisions. The Great Recession is now spawning its share of rulings that support the maxim that bad facts make bad law. From a legal perspective, these cases really highlight that thoughtful attention to loan administration is initially important to a Lender’s success in collecting on “bad” loans.