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Homeowners Hands Often Tied By Binding Mandatory Arbitration Clauses

Posted By admin || 1-Oct-2008

Many homeowners don't realize it, but often their loan agreements include binding mandatory arbitration clauses. These clauses require that any dispute a homeowner may have with a lender be settled through arbitration and prevents the homeowner from taking any claims to court.

What This Means For You



If you're a homeowner who has been the victim of predatory lending practices often found in the subprime lending industry, binding mandatory arbitration clauses prevent you from having your case heard by a jury of your peers, in a public forum. Arbitration is held in secret with little or no documentation of the proceedings.

Often, binding mandatory arbitration clauses include language that limits a homeowner's ability to claim penalties, attorney fees and may limit the actual dollar amount awarded homeowners. Some binding mandatory arbitration clauses also prevent homeowners from joining a class action suit against lenders. If you are considering taking out a loan on a home make sure that your attorney checks the documents for binding mandatory arbitration clauses and their stipulations.

 

Categories: Loans / Mortgages
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