Lender liability is a major issue, especially in a world where financial instruments are growing in importance each day. These issues come up at every stage of the lending process, and it's wise to address them as soon as you think something may be problematic. Here are four instances where you might want to discuss your concerns with a lender liability advisor.

Creating a Contract

This is primarily seen as an issue for institutions, but individuals and businesses taking on loans should also consider working with advisors when contracts are drafted. Institutions will want to limit their exposure to risk, and borrowers need to make sure they're well-positioned in case the lender fails in their duties.

Fears of Fraud

When a financial instrument like a loan or mortgage is presented to a borrower, it's important that the lender represents the terms honestly and in good faith. Predatory lenders, in particular, often use convoluted language or just plainly lie to get folks to sign agreements.

Although financial fraud is prosecuted as a crime, a borrower has to recover their losses through the civil court system. That means hiring an attorney, and the lawyer will likely want to hire at least one lender liability expert witness to explain what happened. The witness may provide reports, depositions, and testimony explaining why the lender in the case is liable for damages.

Notably, the defense may take a similar tacctic. Their attorneys will likely recruit witnesses to explain why they're in the right.

Breach of Fiduciary Duty

One potential issue you may face is regarding how a loan or mortgage handles fiduciary duty. This is the legal obligation that some parties have to look out for the interests of their customers and clients. Not every loan leads to a lender-borrower relationship where the lender has a fiduciary responsibility to protect your financial best interests. If there are questions about whether a lender was supposed to serve as a fiduciary, the answer is likely to come from a lender liability expert witness.

Statutory Prohibitions

Some transactions are fundamentally illegal simply because the law usually bans them altogether. For example, bundling a loan with the sale of a property is typically illegal and might even be considered a form of racketeering. An institution should consult with a lender liability advisor before making such arrangements. If you are a borrower who feels you were wronged, you should get in touch with a lawyer and ask about consulting with a lender liability expert witness.