Can I sue a bank for deliberately allowing a mortgage rate lock to expire?
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Can I sue a bank for deliberately allowing a mortgage rate lock to expire?
I am currently trying to refinance a home through a bank that currently holds my mortgage, but they have delayed so long for no apparent reason, I believe it’s because the rate that I paid to lock into is too low now that the market has gone up, can I sue them for breach of contract?
Asked on August 26, 2012 under Real Estate Law, Michigan
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
It would not be breach of contract, unless the contract obligated the bank to process the loan by a date certain, which they failed to do. Possibly, you could sue them for violation of the implied covenant of good faith and fair dealing--the obligation imputed by law to every contract, that the parties to the contract act in good faith towards each other--but be advised that it is very unlikely that you will win. To win, you'd have to prove bad faith on the part of the bank; to defeat your suit, all they need to is prevent that from happening, such as by showing that they were processing the loan but it simply took too long due to, for eample, some complexity with or question about your application.
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