A New Duty Of Care Owed To Calif. Borrowers

Law360, New York (March 11, 2013, 6:28 PM EDT) -- In a decision that will significantly impact lender liability litigation, the California Court of Appeal (First District) recently decided in Jolley v. Chase Home Finance LLC that, under certain circumstances, a bank that has assumed the assets of another bank owes the predecessor’s borrower a duty of reasonable care with respect to investigating the history of the loan, reviewing any loan modifications in good faith, and conforming to industry standards of conduct to protect the borrower against losses associated with the loan.

In so doing, the...
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