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Lender Liability

Lender Liability

Definition

Liability caused by the wrongful acts of a lending institution. Lender liability claims most frequently arise when a debtor challenges the validity of a loan agreement in a counterclaim against a financial institution after the institution has filed a collection action. Such claims typically allege: misrepresentation of repayment terms, fraud, economic duress, and withholding of promised credit by the lender.

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