What Florida Law Says About Banks’ Responsibilities in Underwriting and Loan Processing

– Claims against the original lender for not performing like a reasonable and prudent bank can be expected to perform in the administration of a loan are unsustainable in Florida law.
– There is no tort duty for banks to process loans competently in Florida.
– Four elements are necessary to sustain a negligence claim in Florida: duty, failure to conform to the required standard, causal connection between conduct and resulting injury, and actual loss or damage.
– An essential element of a claim of negligence is a legal duty owed to the plaintiff.
– Lender liability claims against banks based on negligent underwriting fail for want of duty to perform a reasonable underwriting. – Federal courts have concluded that there is no common law duty of competent loan underwriting or processing in Florida.
– Courts have noted that federal courts applying Florida law have held that there is no legal duty to process loans competently.
– Several cases, including Brake v. Wells Fargo Fin. Sys. Fla., Inc., Silver v. Countrywide Home Loans, Inc., Azar v. Nat’l City Bank, and Matthys v. Mortg. Elec. Registration Sys., Inc., have dismissed negligence claims because there is no duty under Florida law to process loan applications properly or use reasonable care in the evaluation of loan applications. 1. The plaintiff alleged negligence against the defendant bank in processing their loan application.
2. The defendant argued that there is no duty to process the loan application in any particular manner.
3. The court dismissed the borrower claims, stating that there is no legal duty for lenders to use reasonable care in processing loan applications.
4. Federal courts applying Florida law have held that there is no legal duty to process loans competently.
5. Florida courts have rejected the contention that banks owe a legal duty to prospective borrowers to process loan applications with reasonable care.
6. The court concluded that a violation of a duty of self-interest cannot give rise to a tort claim.
7. Florida banks can breathe a sigh of relief that claims of negligence in lending money are unsustainable under Florida law.

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