Business Communication-Case Study

Plaintiff New South Federal Savings Bank (“New South Bank”) provided two mortgages to Defendant Nwaneri in May 2006 totaling $1,448,750. Nwarneri indicated that he earned $36,000 a month and had about $700,000 in different accounts, but default was entered against him in July 2009 because he never made a payment. New South Bank relied on, but did not verify the truthfulness of the application.

Defendants Ousnamer and Esposito appraised the home at $1,525,000 on May 11, 2006. New South Bank conducted their own quasi-appraisal of the home which resulted in a $1,494,000 figure using their own program, Core-Logic. New South Bank argued that the home is worth $400,000 less than the appraised value. Under the charge of negligence and negligent misrepresentation, New South bank holds the Defendants, Ousnamer and Esposito liable for damages.

Recommendation

New South Bank cannot provide evidence that its damages are due to a misleading appraisal. The appraisal, misleading or not is irrelevant as it has no impact of the loss of New South bank. The evidence shows that the loss of New South Bank is due to Nwarneri defaulting on the mortgages. The reckless lending behavior of New South Bank is the cause of their loss. The case was dismissed by the court as there is no legal and factual basis for the argument of New South Bank.

Findings and Analysis

New South Bank cannot prove that it relied on what was argued to be misrepresentation as the Defendants claim, making the charge of negligent misrepresentation an unfounded accusation.

It cannot be proven by New South Bank that the funds lent to Nwaneri would not have been lent if the appraisal resulted in a different figure than the figure given by the Defendants. There is no basis in fact for the argument New South Bank has put forth.

New South Bank cannot prove that the damages suffered were not caused by anything other than Nwaneri defaulting on both mortgages. The loan application of Nwaneri contains false...