Loan origination refers to the process in which a person applies for a loan, usually in reference to a home loan. This often refers to the beginning stages of the home loan securing process, rather than the later stages after approval. Loan origination can involve such actions and steps as:

  • Shopping for different loan options and packages
  • Filling out the required documents and forms
  • Passing background checks
  • Negotiating terms
  • Finalization and approval of the application.

Actions performed after the approval fall under the category of loan servicing. This can include steps like collecting payments, dealing with late/missing payments, adjusting rates, etc.

What Are Some Typical Loan Origination Disputes?

There are many steps and details involved in the loan origination process. There may also be multiple parties involved. Some typical loan origination disputes include:

  • Issues with the person’s background check, especially when it comes to credit ratings
  • Fraud (can either be by the borrower or the lender)
  • Disputes regarding loan amounts and terms
  • Advertising or marketing disputes (for instance, lenders engaging in deceptive marketing practices)
  • Disputes involving licensing and certification

Fraud is one of the more common loan origination issues. For instance, a borrower might attempt to deceive a lender by falsifying information regarding their credit scores. Or, a lender might engage in fraud when it comes to the actual interest rates for a loan. In some cases, loan origination fraud can involve both the borrower and lender (such as when they attempt to deceive others for tax purposes or other reasons).

What Are Some Legal Remedies for Loan Origination Disputes?

Remedies for loan origination disputes can often vary depending on the situation. For instance, in cases involving fraud or breach of a loan contract, the remedy might involve an economic damages award to make amends for the breach. In cases of widespread, systematic fraud or abuse, a class action lawsuit may be necessary. This can often lead to a full investigation of the lending party’s business records and practices.

Do I Need a Lawyer for Help with Loan Origination Issues?

Loan origination can often be a highly technical process. You may need to hire a real estate lawyer for help with loan origination issues or disputes you may have. For instance, your attorney can help you with negotiations, document reviews, and form submissions. Also, if you need to file for damages over a legal dispute, your attorney can represent you in court during the process.