There are two main issues that must be solved when a bank goes out of business and is taken over by the FDIC. The first is whether or not all of the proper procedures of the FDIC must be gone through by the borrowers before they can have a court review their claims against the original bank. The second is which claims against mortgage lender misconduct would even survive the special protections the FDIC enjoys.
In terms of the first issue, statutes dictate the administrative claims procedure that borrowers must go through when a bank fails and is taken into receivership by the government. In essence, the FDIC has the ability to disallow claims brought by borrowers, but the agency must send out a notice advising them of homeowners’ ability to present their claims within a specified period of time (90 days from the date the notice is published). Then the FDIC has another 180 days to evaluate if it will allow the claim or not.
The second issue relates to which claims would survive a bank takeover. The FDIC enjoys numerous protections against claims that may have been brought against the original lender, most recent mortgage holder, and servicing company. Debtors and their lawyers will have to address a number of questions to determine if and what claims would survive.