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PhillipsEsq
PhillipsEsq, Attorney-at-Law
Category: FL Real Estate
Satisfied Customers: 19307
Experience:  B.A.; M.B.A.; J.D.
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This question is banking related and pertains to a mortgage

Customer Question

This question is banking related and pertains to a mortgage on a commercial income producing property in Florida. I have a mortgage on a commercial property with a bank that is out of state. They briefly did business in Florida but left the market when
the market took a downturn. The bank has been working with me and has allowed me to operate the business I have on the property with very favorable terms. They basically have renewed the loan every 3 months based on the level of commitment that I've given
to the business. Because of the frequent renewals, The loan documents have been sent by e mail and I download the documents, sign, and return them. Unless there was discussion, I always assumed that there was no change in the documents other than the renewal
date. I was usually given a very short period of time to sign and send back, which I would do and felt no need to hire an Attorney. Earlier this year, I was sent the renewal docs. which were also 3 weeks after the due date, therefore there was a greater rush
to get them back. I am up for a renewal and decided to retrieve the prior documents to read them. I was greatly surprised to find out that they added an adjacent parcel of property that I own debt free. They apparently added a paragraph and a legal description
in the prior renewal adding the parcel as additional collateral. I never had a discussion with them about this and never consented to it other than executing and signing the loan docs at the time. This is a chartered bank not a private lender....There's obviously
some ethical questions, but more importantly...is this legal?
Submitted: 2 years ago.
Category: FL Real Estate
Expert:  PhillipsEsq replied 2 years ago.
Hello: This is PhillipsEsq. I am a licensed Attorney and I will be assisting you today.
This question is banking related and pertains to a mortgage on a commercial income producing property in Florida. I have a mortgage on a commercial property with a bank that is out of state. They briefly did business in Florida but left the market when
the market took a downturn. The bank has been working with me and has allowed me to operate the business I have on the property with very favorable terms. They basically have renewed the loan every 3 months based on the level of commitment that I've given
to the business. Because of the frequent renewals, The loan documents have been sent by e mail and I download the documents, sign, and return them. Unless there was discussion, I always assumed that there was no change in the documents other than the renewal
date. I was usually given a very short period of time to sign and send back, which I would do and felt no need to hire an Attorney. Earlier this year, I was sent the renewal docs. which were also 3 weeks after the due date, therefore there was a greater rush
to get them back. I am up for a renewal and decided to retrieve the prior documents to read them. I was greatly surprised to find out that they added an adjacent parcel of property that I own debt free. They apparently added a paragraph and a legal description
in the prior renewal adding the parcel as additional collateral. I never had a discussion with them about this and never consented to it other than executing and signing the loan docs at the time. This is a chartered bank not a private lender....There's obviously
some ethical questions, but more importantly...is this legal?

Response: Regrettably, it is legal because you signed the documents containing the legal description of the other property. It would be your words against the documents that you signed and unfortunately, the documents would prevail. Once you signed the documents containing the legal description of the additional property it is next to impossible to prove that the bank never discussed the addition with you before putting it on the loan documents. You should always read documents very carefully before signing no matter how rushed the transaction is. It is not a defense that you assumed the terms would be the same or that you did not have time to review the documents.

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