Failure to Property Evaluate Creditworthiness of a Borrower
A mortgage broker arranges for a loan in the amount of $900,000 for a small business. Ultimately, the borrower cannot pay the loan. The mortgage broker attempts to help the borrower refinance, however, is unsuccessful. The property ultimately went into foreclosure. The borrower sued the mortgage broker, because he did not do his due diligence in granting the loan. The Plaintiff alleged that as a professional he should have been able to determine that the underlying business was not credible and therefore should not have ever issued the loan in the first place.