March 26, 2013

GavelA Borrower only Needed $1 Million to Survive, Bank Says No, Jury Says Pay $7.5 Million

In 2008, a Tennessee real estate developer who had already had $2.7 million in development loans on the books at the local community bank “only needed another $1 million to keep their business afloat.”

The bank said no on and ended up foreclosing on the properties.

End of story?

Not so fast said a Murfreesboro jury that awarded the developer and his wife $7.5 million plus attorney fees. They faulted the former branch president of acting “recklessly and fraudulently” in the handling of the developer’s loans.

The banker did not pocket a dime and has not been charged with criminal behavior. Rather it was his handling of the paperwork that got him fired and the left the bank with a bill for a large verdict.

Writes the local reporter that the banker moved money around from loan to account to loan, and signed the borrower’s signature, all without the borrower’s consent.

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