Can Tulsa Lenders Change the Terms of Financing Agreements Before Disbursing the Funds to Borrowers?
Once the lender and borrower sign off on a financing agreement, neither party can change the terms — unless the agreement provides for certain changes, such as specific interest rates. Any lending business can easily face potentially costly litigation by later refusing to proceed with the loan, or by changing the terms.
The legal issues surrounding lender liability are so complex that one popular guide, Lender Liability Law and Litigation, comprises two volumes containing 27 detailed chapters. Generally, the best way to avoid litigation is to honor the terms of the financing agreement, and to maintain a good working relationship with borrowers, even when they fail to make required payments on a loan. However, in cases like these, you should consider retaining an experienced attorney to help negotiate new terms that can help borrowers get back on track.
Any lender should exercise appropriate caution when determining borrower risks and choosing the language of a financing agreement. When such efforts fail to prevent business litigation in Oklahoma, lenders need to consider pursuing an out-of-court settlement, rather than facing a jury in court. Particularly after exposure to years of news stories regarding unfair lending practices during the recent economic downturn, juries can have inherent sympathies with borrowers — even when the facts clearly show that the lender followed all regulations to the letter.
The law firm of Eller and Detrich, A Professional Corporation has more than three decades of experience helping lenders navigate the complexities of lending law. Contact us to learn how we can help.