In the current economic climate, created in large part by the Covid-19 virus, many borrowers face economic, logistical and institutional challenges and are making loan modification requests to their lenders. Therefore, when dealing with the large number of such requests, it is important that lenders and providers remember to exercise caution in their communications with these borrowers to avoid potential liability for negligence and / or misrepresentation by negligence.
A recent case in California, although occurring in a residential context, serves as a reminder to all lenders and service providers. In Weimer v. Nationstar Mortg., 2020 WL 1610159 (Cal. Ct. App. April 2, 2020), the California Court of Appeals recently held service officers liable for negligence and negligent misrepresentation due to their mismanagement of change requests from loan of a borrower and communications made thereon.
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