Predatory lending accusations — how do you protect yourself?

Nate, this is a real risk and documentation is your best defense. Here's what I keep for every deal: 1. Signed broker fee agreement with clear disclosure of all fees 2. Written loan summary showing the borrower I explained the terms 3. Email chain showing all communications (never delete) 4. Signed acknowledgment that the borrower understood the rate, term, and exit strategy 5. Notes from every borrower conversation (I use Otter.ai to transcribe calls) The "predatory lending" accusation usually falls apart when you can show a paper trail of informed consent. The borrower signed, acknowledged, and proceeded with full knowledge of the terms.

Marcus — this is exactly what I needed. I have some of this but not all. Going to build out my documentation checklist this week.

E&O insurance. Make sure you have it and make sure it covers this type of claim. If you don't have E&O, get it before you do another deal.

Pete — I have E&O but I'm not sure of the coverage details. Calling my insurance broker today.

Borrowers who threaten legal action when their own business plan fails are the worst. Document everything and don't lose sleep over it if you did the job right.