CBA Requests Publication of Opinion that Counters Recent Trend Toward Lender Liability
The financial crisis has spawned a raft of litigation arising from loan defaults and modifications, and courts have responded by judicially imposing on creditors heighted duties of care to borrowers. A court of appeal decision came down that bucked the trend but, unfortunately, the opinion was not published. Last week CBA requested that the opinion, Aspiras v. Wells Fargo Bank, N.A., be published so that it may be used as precedent. The case arose from the bank’s foreclosure on a defaulted home mortgage loan as modification negotiations faltered.
The decision stands for the proposition that loan modification negotiations and servicing are typical lending activities that preclude imposition of a duty of due care. CBA’s amicus letter was prepared by Karin Vogel of the law firm Sheppard Mullin.