Can I Sue my Lender for not Closing on Time?


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Yes. You can sue your lender for not closing on time. Due to the expansion of lender responsibility, borrowers are now entitled to bring legal action against lenders who fail to uphold the terms of a loan arrangement. This includes closing late and not keeping a loan agreement.

Borrowers mistreated by lenders who have broken their contractual commitments or mistreated about loans and loan contracts are protected by the legal concept of lender responsibility.

Financial service providers must treat borrowers equitably regardless of whether they have contractual arrangements with lenders for modest operational improvements or to finance multimillion-dollar projects.

Creditors have the right to take legal action if they don’t. You may file a lawsuit against your lender if the closure is delayed in any way. Come along as we elaborate more on this below.

What are Closing Delays?

What are Closing Delays?

Closing delays are when a later or final loan fails to close. Closing is to take place at the scheduled time. This can be due to one or both parties’ false representations or warranties. The failure of either side to uphold any commitment, covenant, or agreement may also be the cause of this.

Reasons Why Lenders do not close on time

Some Reasons why lenders do not close on time include the following:

Budgetary Concerns

Before authorizing your loan and property purchase, your lender examines a range of papers and figures. They pay close attention to your debt-to-income ratio and credit score (DTI).

Lenders can be concerned about your capacity to repay the loan if your credit rating needs to be higher. It’s recommended to take the procedures to raise your credit score gradually since the minimum credit score criteria for each lender vary.

Evaluation Problems

Before granting you a mortgage loan, your lender demands that your house be appraised. If the house appraisal is lower than anticipated, this might cause delays, forcing the buyer and seller to negotiate new conditions if they have not done so.

Since they utilize the property as mortgage security, your lender requires the home to evaluate for at least the desired loan amount. If your evaluation is undervalued, you have many options, including increasing your financial contribution, challenging the appraisal, and walking away.

Title Problems

Before closing on a property, lenders do a property background check to check for any liens, fines, or debts against the asset. While most title disputes may be settled, it could take some time.

To ensure you acquire a house with a clear title, you may employ an attorney as a buyer. To prevent this, sellers must also settle any outstanding obligations on the property.

Factors that can Impact the Closing Time

Factors that can Impact the Closing Time

Some factors that can impact the closing time include:

Astonishes in the final walkthrough

Most customers prefer to do a last walkthrough of a home about a week before closing to ensure it’s in the same shape it was when they decided to purchase it. This is often only a formality.

There will be a problem if the window shades and refrigerator are uninstalled without the buyers’ knowledge when they arrive for the tour. Similarly, if a seller promised to make improvements before the purchasers moved in but have yet to do so, it can delay closing.

Closure Reporting forms

The documentation outlining the details of the buyer’s financing and any additional closing charges related to a real estate deal is known as a Closing Disclosure. The buyer must get the CD from the title firm or mortgage lender three days before closing to study it and ensure they understand what they are signing.

The closure cannot occur on time if the buyer receives the CD later than expected. Thus, if a Saturday close is required, the buyer must have the CD in their possession by Wednesday, failing which, you will have to postpone the closing.

Mistakes in the document

The need to print out and review whole new paperwork might delay closing due to misspelled names, incorrect addresses, and unexpected expenses. Even though it can be avoided, it nevertheless occurs.

When you can Sue your Lender

You can sue your lender in the following scenarios:

Contractual infraction

Lenders have historically pursued legal cases against defaulting borrowers. Lenders that violate the terms of a loan arrangement, such as by not honoring a lending pledge, may now be sued by borrowers due to the expansion of lender liability.

Borrowers may put themselves in a position to submit strong claims and seek compensation for their losses by working with lawyers who know this field of law.

Fraudulent behavior

Lender liability may result from the dishonest actions of lenders, such as false representations, falsely induced agreements, and predatory lending. This may also include breaking other local, state, or federal crimes, such as the False Claims Act.

Borrowers must file a civil lawsuit to seek compensation for their losses in civil court, even when fraud may lead to criminal cases, criminal fines, or civil sanctions.

False faith

Lenders must treat borrowers fairly and act in good faith while handling loan agreements and other connections. Several ways they might conduct this wrong and give rise to lender responsibility claims.

This includes unjustified letters of default or foreclosure, unjustified enforcement of personal guarantees, unjustified interference with the contractual obligations of third parties or a borrower, unjustified failure to repay or renew loans, and more.

What are the Potential outcomes of Suing your Lender?

The case result is how the matter is handled in court. The potential outcomes of suing your lender include the following:

Resignation or withdrawal

A guilty conviction; 

  • A guilty plea; 
  • An acquittal; 
  • A finding of not guilty.

Any result is open to revision by refiling, review, or appeal, except acquittal.

Alternatives to Suing your Lender

The alternatives to suing your lender include the following:

Direct bargaining

Unless they are informed, your lender may not be conscious of the wrongdoing they have done. And when informed, they often want to make amends.


Sometimes a neutral third party might assist the two parties in coming to a mutually agreeable resolution. Each party can determine if they have a good case if an agreement is not reached, thanks to their expertise in negotiations and capacity to comprehend complex legal concerns.


Unlike mediators, arbitrators could have the power to reach a legally binding settlement if that power has been previously given to them by all parties to the dispute.


In summary, loan closings sometimes go off with a glitch. Numerous factors, both within your control and out of your control, might cause the closure to be delayed.

On closing day, lenders and borrowers ought to be aware of any issues that might develop, such as loans falling through or surprises during the final walkthrough. Additionally, they must be cautious about what they don’t do after closure. And as highlighted above, you can sue your lender for not closing on time.

Expert Advice

Major loans are more complex to get. The procedure can take several forms. However, by the moment closing day arrives, you won’t have much to do other than sign a few pieces of paperwork. Your lender may now decide to postpone the closure for various reasons.

It is sometimes challenging to determine if your complaint to your lender is justified. Therefore, it’s crucial to have a qualified attorney thoroughly review your loan agreements and the events surrounding your signature.

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