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fraud on bank loan application

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B

brinasmom

Guest
What is the name of your state? Illinois
Ok. this will be kind of long, will try to condese without leaving out any pertinent information.

My husband was an officer in a corporation, and was in the process of being bought out by the president of the company. At the time of this incident, there was only about $500 left for him to be paid.

In Feb. 2002, the company needed to purchase a new (actually used) truck for use in the equipment rental portion of their business. The president asked my husband to pick up loan papers at the bank----he agreed as the president was unable to do so at that time. The loan papers stated that the loan was for $13,500 to be secured by the truck, and the loan was a term loan. At this time, the president asked my husband to sign the documents---he signed his name under the section of the document called Company Signatures, the exact wording of which follows:

"The undersigned authorized agent (s) of Company acknowledge and agree to the terms specified in Section 5 above (which was essentially their required information under the FCRA and discussing their right to secure credit information), and submit this application on behalf of Company.

With respect to the Visa Business Credit Card and the Unsecured Small Business Line of Credit, the following shall apply: The Company, by its undersigned agent(s), promises to pay to the order of Bank or any subsequent holder in accordance with the Agreement, at the address listed on the monthly billing statement, the amount advanced pursuant to this application and the Agreement, including all principal, interest, fees and other charges outstanding. All terms and conditions contained in this application and the Agreement are incorporated herein by reference"

My husband agreed to sign this portion of the document as it stated that the company would pay the loan. The next section of the document dealt with personal guarantors of the loan. He told the president of the company that he would not sign as a personal guarantor as he was almost fully paid out of the company, and was not going to be personally liable should the company not be able to pay the loan. The president was angry about it but did not pursue the issue. This section of the loan document basically stated that the undersigned individuals jointly and severally guarantee they payment of the loan, etc.

In April 2002, my husband was paid off and was no longer an officer of the corp.

In July 2002, the president of the corp. passed away, and since he was the one who handled the daily operations (my husband was a technical advisor who did not handle any of the daily operation of the business), the company ceased operation.

In October 2002, I discovered that the bank had taken an amount of money from our joint checking account. At a meeting with the bank, we were informed that it was due to the fact that my husband had personally guaranteed the business loan---a fact that he denied. We were provided by the bank with copies of the loan document, which did not show his signature under the personal guarantor section. The next day, the bank discovered a second "page 3" (the page with the signatures on it) that purportedly was signed by my husband. We secured a copy of that page as well, and the signature under the personal guarantor section of the loan document was not my husband's!! It is quite evident from a review of the two signatures side by side that it is not his; in addition, there are many similarities between the president's signature and the one purported to by my husband's.

There are also other discrepancies in the loan document. After my husband saw the papers for the first and only time, the terms of the loan were changed from a $13,500 term loan secured by the truck to a $35,000 unsecured business line of credit, part of which was to be used to purchase the truck but was not secured by it!! In addition, there is a section of the loan in which an officer of the corp. was to certify that the officers are a part of a valid corp. and that the officers are authorized to secure a loan. However, the signature purported to be my husband's in this section is also not his!! His title is also listed incorrectly. We are not sure where the other personal information on this document came from as my husband was never contacted by the bank.

We have filed a dispute with the bank, and it came back that since there is a signature under the personal guarantor section of the document that is "his", he is liable. For the record, we were told by the bank that once our dispute went to the fraud department, we would be contacted and asked for additional information---this never happened. Prior to our disputing this with the bank, we discussed the matter with an attorney, who seemed to think that it was fairly cut and dried, and advised that we give the bank the opportunity to do the right thing, rather than starting off right away with legal action, and then if they did not, then pursue it legally.

We have several issues with this dispute.

1. We feel that the bank dropped the ball is not asking for any sort of verification of signatures----they insist that is normal operating procedure, I insist that by not taking such precautions, they open themselves up to this kind of incident. It is clear that there are three purported signatures of my husband on this document, and only one of them is really his, the other two are clearly different----they obviously not careful in their review of this information. I also feel that since he is here in town, the bank should have requested that he sign the documents in their presence to verify that the signatures were valid, or at least requested a copy of his driver's license or something else with his signature in order to verify it.

2. Changes were made to the terms of the loan subsequent to my husband first (and only) viewing of the documents, and those changes were never brought to his attention. This was likely the responsibility of the president, but it never happened. However, I again feel that the bank made an error in not requesting any kind of approval of the changes from each and every person who supposedly signed the agreement. In addition, the two signature pages were faxed to the bank on separate days, and amazingly enough, signatures on one were rearranged by the time the second one was faxed!!

3. There is a wealth of incorrect information on this loan document, which appeared there after my husband viewed it. Although this is not necessarily the bank's fault, I believe it does help to support our claim.

4. We are currently in discussion with the bank to try to determine what happened, as things that we were told would occur did not. We are also trying to secure an attorney locally who can help us with this matter.

By the way, we cannot really go after the estate of the president---we could, but there is not a large amount of money in it, and there are other outstanding large debts.

We understand that as an officer of the company, my husband would be liable if he signed as a personal guarantor, but he did not---his signature was forged. In addition, his actual share of the company at the time the document was prepared was inaccurately portrayed as being 30%, when in reality it was closer to 2%. Again, although that is not the bank's fault, we feel that is again something to help support our claim that the president of the company made some gross misrepresentations in the document and that they should go after him (his estate) if they want to pursue this matter.

Any advice would be greatly appreciated.
 


B

brinasmom

Guest
Think I should clarify---although we think that the bank dropped the ball with regard to verification of information on this loan document, we are not trying to get anything from them other than for them to not pursue my husband as a personal guarantor on this loan due to the fact that he did not sign as a personal guarantor of this loan.
 

I AM ALWAYS LIABLE

Senior Member
brinasmom said:
What is the name of your state? Illinois
Ok. this will be kind of long, will try to condese without leaving out any pertinent information.

My husband was an officer in a corporation, and was in the process of being bought out by the president of the company. At the time of this incident, there was only about $500 left for him to be paid.

In Feb. 2002, the company needed to purchase a new (actually used) truck for use in the equipment rental portion of their business. The president asked my husband to pick up loan papers at the bank----he agreed as the president was unable to do so at that time. The loan papers stated that the loan was for $13,500 to be secured by the truck, and the loan was a term loan. At this time, the president asked my husband to sign the documents---he signed his name under the section of the document called Company Signatures, the exact wording of which follows:

"The undersigned authorized agent (s) of Company acknowledge and agree to the terms specified in Section 5 above (which was essentially their required information under the FCRA and discussing their right to secure credit information), and submit this application on behalf of Company.

With respect to the Visa Business Credit Card and the Unsecured Small Business Line of Credit, the following shall apply: The Company, by its undersigned agent(s), promises to pay to the order of Bank or any subsequent holder in accordance with the Agreement, at the address listed on the monthly billing statement, the amount advanced pursuant to this application and the Agreement, including all principal, interest, fees and other charges outstanding. All terms and conditions contained in this application and the Agreement are incorporated herein by reference"

My husband agreed to sign this portion of the document as it stated that the company would pay the loan. The next section of the document dealt with personal guarantors of the loan. He told the president of the company that he would not sign as a personal guarantor as he was almost fully paid out of the company, and was not going to be personally liable should the company not be able to pay the loan. The president was angry about it but did not pursue the issue. This section of the loan document basically stated that the undersigned individuals jointly and severally guarantee they payment of the loan, etc.

In April 2002, my husband was paid off and was no longer an officer of the corp.

In July 2002, the president of the corp. passed away, and since he was the one who handled the daily operations (my husband was a technical advisor who did not handle any of the daily operation of the business), the company ceased operation.

In October 2002, I discovered that the bank had taken an amount of money from our joint checking account. At a meeting with the bank, we were informed that it was due to the fact that my husband had personally guaranteed the business loan---a fact that he denied. We were provided by the bank with copies of the loan document, which did not show his signature under the personal guarantor section. The next day, the bank discovered a second "page 3" (the page with the signatures on it) that purportedly was signed by my husband. We secured a copy of that page as well, and the signature under the personal guarantor section of the loan document was not my husband's!! It is quite evident from a review of the two signatures side by side that it is not his; in addition, there are many similarities between the president's signature and the one purported to by my husband's.

There are also other discrepancies in the loan document. After my husband saw the papers for the first and only time, the terms of the loan were changed from a $13,500 term loan secured by the truck to a $35,000 unsecured business line of credit, part of which was to be used to purchase the truck but was not secured by it!! In addition, there is a section of the loan in which an officer of the corp. was to certify that the officers are a part of a valid corp. and that the officers are authorized to secure a loan. However, the signature purported to be my husband's in this section is also not his!! His title is also listed incorrectly. We are not sure where the other personal information on this document came from as my husband was never contacted by the bank.

We have filed a dispute with the bank, and it came back that since there is a signature under the personal guarantor section of the document that is "his", he is liable. For the record, we were told by the bank that once our dispute went to the fraud department, we would be contacted and asked for additional information---this never happened. Prior to our disputing this with the bank, we discussed the matter with an attorney, who seemed to think that it was fairly cut and dried, and advised that we give the bank the opportunity to do the right thing, rather than starting off right away with legal action, and then if they did not, then pursue it legally.

We have several issues with this dispute.

1. We feel that the bank dropped the ball is not asking for any sort of verification of signatures----they insist that is normal operating procedure, I insist that by not taking such precautions, they open themselves up to this kind of incident. It is clear that there are three purported signatures of my husband on this document, and only one of them is really his, the other two are clearly different----they obviously not careful in their review of this information. I also feel that since he is here in town, the bank should have requested that he sign the documents in their presence to verify that the signatures were valid, or at least requested a copy of his driver's license or something else with his signature in order to verify it.

2. Changes were made to the terms of the loan subsequent to my husband first (and only) viewing of the documents, and those changes were never brought to his attention. This was likely the responsibility of the president, but it never happened. However, I again feel that the bank made an error in not requesting any kind of approval of the changes from each and every person who supposedly signed the agreement. In addition, the two signature pages were faxed to the bank on separate days, and amazingly enough, signatures on one were rearranged by the time the second one was faxed!!

3. There is a wealth of incorrect information on this loan document, which appeared there after my husband viewed it. Although this is not necessarily the bank's fault, I believe it does help to support our claim.

4. We are currently in discussion with the bank to try to determine what happened, as things that we were told would occur did not. We are also trying to secure an attorney locally who can help us with this matter.

By the way, we cannot really go after the estate of the president---we could, but there is not a large amount of money in it, and there are other outstanding large debts.

We understand that as an officer of the company, my husband would be liable if he signed as a personal guarantor, but he did not---his signature was forged. In addition, his actual share of the company at the time the document was prepared was inaccurately portrayed as being 30%, when in reality it was closer to 2%. Again, although that is not the bank's fault, we feel that is again something to help support our claim that the president of the company made some gross misrepresentations in the document and that they should go after him (his estate) if they want to pursue this matter.

Any advice would be greatly appreciated.


My response:

Part of the instruction in RED words, above, state - - "You must be BRIEF and to the point."

If you can't be brief, that means that your situation is too complicated for a mere Bulletin Board. That's an indicator that you should consult with a local attorney.

Good luck.

IAAL
 

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