New York State Lender Representation & Default Service Attorneys
Lenders, like all actors in real estate and other financial negotiations, require excellent legal representation. At Roman & Piccinnini, we provide effective, efficient, individually tailored service to all of our clients, including a broad range of lending institutions..
At Roman & Piccinnini, we work to ensure that bank closings proceed expediently. We are highly adept at avoiding the pitfalls borrowers and lenders may come up against in New York loan and mortgage closings. We routinely handle all phases of loan transaction which enables us to represent many of the leading lenders in New York State. Our attorneys also conduct and represent borrowers at closings.
Our first-rate corporate finance attorneys are available to assist lenders in avoiding lender liability, or if necessary confronting it through litigation. Lender liability first gained notability in the 1980s and has since become a significant body of law. Designed to protect borrowers from unfair, or even predatory, lenders, lender liability laws lay out rules to ensure fair lending practices. If lenders don’t follow such practices, they are subject to litigation. In most cases, such litigation involves breach of contract and/or fraud claims. If your lending institution finds itself in difficulty because of lender liability laws, our attorneys are here to help.
Breach of Contract/Fraud
For a long time, breach of contract cases usually involved borrowers as the defendants in breach of loan agreements. Once lender liability came into play, however, lenders became just as likely to be accused of contract breaches. If the borrower can prove that the lender used fraudulent methods or if there was an absence of mutual consent, not only can’t the agreement be enforced, but the lender can be sued.
Typically, when borrowers sue lenders they are seeking monetary damages. Such damages may include the costs of obtaining a replacement loan and any provable lost opportunities or profits. A primary defense against a lawsuit of this type is “the parol evidence rule” which regulates the extent to which parties may introduce evidence of a prior or contemporaneous agreement to explain or alter the contract being questioned. Basically, this rule prevents admission of oral agreements that contradict the signed document.
Fiduciary relationships are those in which one party (known as the fiduciary) owes financial duties to another and must therefore look out for the other party’s interests. Though in early lender liability cases, attorneys for borrowers tried to attribute such fiduciary duties to their lenders, this practice has changed. Legal representatives of lenders have now established that borrowers can only claim the lender-borrower relationship is, by nature, a fiduciary one. In one important court case, the court defined three elements as necessary to claim a fiduciary relationship between the lender and borrower:
- The borrower must have faith, trust and confidence in the lender
- The borrower must be in a dependent position to the lender, e.g. in terms of lack of knowledge
- The lender must have control or influence over the borrower’s affairs
These three criteria are very helpful when we are legally representing you, the lender, since they define the typical lender-borrower relationship as one that is not fiduciary. There are times when it is more challenging to convince the court that this relationship is not a fiduciary one, as, for example, when the lender has taken on the role of financial advisor. In such cases, it is especially important for the lender to have skilled attorneys protecting its interests.
Inappropriate Collateral Sales
Another way lenders can run into legal trouble is when they sell collateral after a loan default without following proper procedures. The Uniform Commercial Code (UCC), a federal body of laws established in 1952 to govern commercial transactions, requires that the method, manner, time, place and terms of the sale be “commercially reasonable.”
During the decades the UCC has been in force, the courts have typically found sales to be commercially unreasonable if the lender:  used an appraisal that it knew or should have known was too low or  insufficiently publicized the sale, resulting in an insufficient number of bids. If the court determines that the lender has wrongfully repossessed or disposed of the collateral, the lender may have to forfeit its security interest and be liable for damages, in addition to losing the right to collect a deficiency. In such cases, having a strong team of attorneys at your side is invaluable in mounting a successful defense.
Roman & Piccinnini Offers the Best Lender Representation
Our well-credentialed, sharp attorneys have successfully represented a wide variety of banks and other financial institutions. In addition to the areas mentioned above, we have extensive experience in:
- Documenting, negotiating and closing commercial lending transactions
- Developing and building permanent loans and revolving lines of credit
- Due diligence work, including comprehensive appraisal
- Extending, modifying and/or restructuring existing loans (loan workouts)
- Working out deeds in lieu of foreclosure, short sales, cash for keys, etc.
- Lender Default Services, including the prosecution of foreclosure cases, REO properties and eviction proceedings.Our firm prides itself on being at the forefront of Lender Compliance
- Our firm prides itself on being at the forefront of Lender Compliance Regulations by constantly updating the firm’s internal policies and procedures to suite the clients’ needs. This allows Roman & Piccinnini, PLLC to stay ahead of the curve of its competitors and to better effectively manage its clients portfolios.
When you bring your concerns as a lending institution to Roman & Piccinnini, you are assured that we will not only protect you from legal liability and look after your financial interests, but will make you gratified to be represented by consummate professionals. Working with our team will provide you with not only the competence you require, but the dignity you deserve. Contact us today to schedule a consultation.