Posted on: 02nd Apr, 2009 05:14 am
does a loan officer have fiduciary responsibility when making disbursements from a construction loan...entered into a contract to have a home built. The bank was to pay the builder out of the loan upon presentation of invoices. Bank paid out over 40% of loan within first 2 weeks prior to any construction being performed. Builder went bankrupt. Remainder of original loan is insufficient to complete house. What responsibility does bank have to keep me whole?
the loan officer was likely not involved in the disbursement of funds, so there ought not to be any fiduciary responsibility in that. the lender, however (servicing department), clearly erred in disbursing funds - unless it was for work already performed or for the land (which would be legitimate, i surmise).
thanks. the loan officer was the one who communicated with the builder and approved draws on the construction loan. The only proof of work performed was a draw sheet sent to the loan officer by the builder saying a percent of the work was done. The builder did one draw for his profit.
that's a crazy situation. so inspections are up to the loan officer? what kind of wacky world is this mortgage company operating in?
it's a bank. meet with the president of bank and he agreed that bank does have fiduciary responsibility but did not agree that bank should keep me whole, at least not yet. They are studying situation and will make decision within next week or so. Which bank regulatory agency would I contact if the bank does not propose a satisfactory solution? Thanks for your responses.
there are several regulatory agencies. the easiest way to get an answer to your question is to simply call the bank and ask them that question. they shouldn't have any qualms about giving out the information.
you can also check this link: http://www.federalreserve.gov/pubs/complaints/complain2.htm.
there's a list of the agencies there.
you can also check this link: http://www.federalreserve.gov/pubs/complaints/complain2.htm.
there's a list of the agencies there.