Developers To Begin Using "Lender-Liability" Suits To Stop Foreclosures?

In Miami, Florida, the Daily Business Review reports:

• For condo developers facing foreclosure, the newest defense may be an old counter offensive last waged during the real estate downturn of the 1980s. EB Developers, a condo builder in default on a $52.43 million loan, countersued Wachovia Bank, claiming the giant lender failed to fully fund construction loan draws and caused a shortfall that brought on the demise of a condominium project in Doral.

• The developer of Promenade At Doral II hopes the action, known as a lender-liability lawsuit, will prevent Wachovia from moving ahead with a March foreclosure suit against the unfinished project. One industry expert predicts a surge in the lawsuits as developers, who couldn’t restructure their delinquent mortgages through workouts, sue lenders to stop foreclosures.

For more, including links to Wachovia's foreclosure action, and Promenade At Doral II countersuit, see Condo Meltdown: Are lender-liable lawsuits on the rise?

Editor's Note:

It may not be a bad idea for homeowners facing foreclosure to take the same approach(1) against their mortgage lender / loan servicer if they won't give an affordable workout agreement satisfactory to the homeowner (and the homeowner's legal counsel).

For posts that reference the failure of some mortgage lenders and their attorneys to file the required loan documents when starting foreclosures, Go Here, Go Here, Go Here, and Go Here.

For other posts on homeowners using Federal & state consumer protection statutes to try and undo bad mortgage loans, Go Here, Go Here, and Go Here.

(1) Lawsuits, countersuits, defenses alleging violations of the Truth In Lending Act, Fair Debt Collection Practices Act, and state consumer protection laws as well as bringing any other applicable statutory and common law claims and defenses - assuming, of course, the foreclosing lender can establish legal standing to bring the foreclosure action in the first place. undo mortgage loans TILA batallion missing mortgage foreclosure docs gamma