Posted by River City on November 07, 2006 at 10:50:39:
The bank accepted liability the day they disbused funds to the borrower. Anyone that lends money accepts liability the day the money leaves their hands. Without knowing exactly what documents the bank made their lending decision on, no one knows if the bank made a good or a bad decision, except for the fact that the builder skipped.
You were probably very happy with the bank’s decision as long as it went your way. Now that you find YOU also made a poor decision, you are looking for someone else to blame for your own lack of judgement.
The bank will have to explain the situation to its regulatory agency and might suffer a bad report from them if it is found that they do this on a regular basis. The regulator has the right to review all the documents submitted by the builder to obtain the loan. If the regulator finds a need for the bank to strengthen its decision processes, they will put that in their report.
Greetings,
My wife and myself entered into a construction loan /project with a general contractor who turned out to be a con-artist, and who’s initial bank approved “budget” wasn’t sufficient for a job half the size.
We picked up the ball as GC, but with the initial budget half-eaten by the “con-artist”, we really did’nt have a chance… we’re in upside-down, out of funds, and probably facing bankruptcy of our LLC as the best solution.
My question is that this whole situation would not have taken place if the bank had not approved a completely unqualified contactor… they personally reviewed his grossly inadequate budget and qualifications, yet still approved the loan.
How liable is the bank?
Liability with negligent bank construction loan - Posted by Bill H
Posted by Bill H on November 07, 2006 at 14:11:26:
I agree with River City…You and you alone had the contract with the contractor.
My question is that this whole situation would not have taken place if the bank had not approved a completely unqualified contactor…
MY question is…“WHO HIRED HIM?” I have been in this business for lots of years and have yet to have a bank hire a contractor for me to do my buildings.
Scott, like River City said, you made the mistake. If it had gone well and you made your fortune…would you have said the “Bank sure made a good decision in going with this contractor?” I doubt it.
This is a tought business…now show your toughness and 'fess up, shut up, pay up and move on!