Wall Street Journal (07/23/08) P. C1; Corkery, Michael
A wave of lender-liability lawsuits are on the horizon, say experts, noting that more lenders are pulling construction loans, halting projects and enforcing personal guarantees signed by builders to obtain funding. Sacramento, Calif.-based real estate attorney Michael Hackard says lenders increasingly will face litigation from builders that insist they did not act in good faith and pushed them toward bankruptcy. Unlike the real estate bust of the 1990s, experts say lenders are less likely to take over construction projects and offer management advice so they can move forward and are more likely to simply yank funding.
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