Kennedy Funding Lawsuit:Details Every Borrower Needs to Know!

Kennedy Funding Lawsuit

“I trusted them to help me save my business, but their hidden fees nearly cost me everything.”

This is just one of the stories emerging from the Kennedy Funding lawsuit, a legal battle that’s sending shockwaves through the real estate lending industry. Borrowers have accused the company of deceptive loan terms, hidden fees, and unethical practices, sparking an urgent conversation about fairness and transparency in lending.

In this article, we’ll break down the lawsuit, explain its significance, and provide actionable tips to protect yourself from predatory lending. Whether you’re a borrower or just curious, here’s everything you need to know.

Who Is Kennedy Funding?

Kennedy Funding is a lender specializing in hard-money loans—short-term loans often used by businesses for real estate projects. These loans are faster to secure than traditional bank loans but usually come with higher interest rates and fees. While Kennedy Funding has helped many borrowers secure funding quickly, it now faces allegations of unethical practices.

What Is the Kennedy Funding Lawsuit About?

The lawsuit claims that Kennedy Funding engaged in predatory lending practices. Borrowers accuse the company of:

  1. Hidden Fees: Charging excessive, undisclosed fees that were not part of the original loan agreement.
  2. Misleading Contracts: Including vague or confusing terms in loan documents.
  3. Breach of Trust: Allegedly promising certain terms verbally but failing to deliver in writing.

For instance, one borrower reported agreeing to a 10% interest rate, only to discover additional charges that increased the effective rate to over 20%.

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Key Allegations in Detail

Here are the core accusations against Kennedy Funding:

  • Excessive Fees: Borrowers allege fees for processing, appraisals, and late payments were far beyond industry norms.
  • Deceptive Terms: Contracts reportedly included language designed to obscure true costs.
  • Fraudulent Practices: Some plaintiffs claim they were intentionally misled to sign agreements they didn’t fully understand.

These allegations paint a troubling picture of financial exploitation, especially for borrowers in urgent need of funding.

How Big Is the Kennedy Funding Lawsuit?

How Big Is the Kennedy Funding Lawsuit?

How Many Borrowers Are Involved?

The Kennedy Funding lawsuit has grown significantly since its inception, with over 50 borrowers filing complaints as part of a class-action suit. These borrowers collectively allege they were charged excessive fees totaling more than $10 million in hidden costs.

What Are the Alleged Costs?

According to court filings, some borrowers reported fees that exceeded 15% of the total loan amount—well above industry norms. For instance:

  • A borrower with a $2 million loan claims they paid over $300,000 in undisclosed fees.
  • Another plaintiff stated that late-payment penalties added nearly 20% to their repayment total.

NOTE: These figures underscore the financial burden borrowers claim to have faced, painting a stark picture of the alleged predatory practices.

Why Does This Matter to Borrowers?

This lawsuit goes beyond Kennedy Funding—it highlights systemic issues in real estate lending. Here’s why it’s important:

  • Setting Legal Precedents: If the plaintiffs win, the case could influence how similar lawsuits are handled in the future.
  • Encouraging Transparency: It may push lenders to provide clearer, more ethical loan terms.
  • Protecting Borrowers: The case draws attention to the need for stronger borrower protections in the lending industry.

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How Did the Kennedy Funding Lawsuit Start?

How Did the Kennedy Funding Lawsuit Start

The lawsuit began when multiple borrowers filed complaints alleging they were misled or exploited by Kennedy Funding. These borrowers claim they were in vulnerable financial positions and trusted Kennedy Funding to provide fair, transparent loans. Instead, they say, they ended up saddled with unexpected costs and unfavorable terms.

The case has caught the attention of consumer advocates, legal experts, and regulators, all of whom are calling for greater scrutiny of lending practices.

What’s Happening in the Case?

The lawsuit is still ongoing, with both sides presenting their arguments in court. Kennedy Funding has denied the allegations, arguing that its contracts were clear and that borrowers were fully aware of the terms. However, if the plaintiffs succeed, Kennedy Funding could face significant financial penalties and a damaged reputation.

Notable Court Developments in the Case

Class Action Status

In 2023, a judge granted class-action status to the lawsuit, allowing multiple borrowers with similar complaints to join forces against Kennedy Funding. This significantly increases the potential scale and impact of the case.

Discovery Phase Revelations

During the discovery phase, plaintiffs presented emails allegedly showing internal discussions at Kennedy Funding about structuring fees in a way that would maximize company profits while remaining obscure to borrowers. These emails are central to the fraudulent misrepresentation claims.

Preliminary Injunction Request

In early 2024, the plaintiffs requested a preliminary injunction to prevent Kennedy Funding from enforcing certain loan terms while the case is ongoing. The court partially granted this request, signaling potential merit in the plaintiffs’ arguments.

Kennedy Funding’s Defense

Kennedy Funding’s legal team has argued that:

  • Borrowers were given ample time to review and understand loan agreements.
  • All fees and terms were disclosed in writing.
  • Borrowers had access to legal counsel and chose to proceed voluntarily.

Kennedy Funding maintains that the plaintiffs are misrepresenting their experiences to shift blame for financial mismanagement.

Upcoming Trial

The case is expected to go to trial in mid-2025. Legal experts predict it could result in significant financial penalties for Kennedy Funding if the plaintiffs prevail.

What Borrowers Can Learn From This Case?

  1. Read the Fine Print: Loan documents can be lengthy and complex, but understanding the details is crucial.
  2. Ask for Clarifications: If anything in the contract seems unclear, ask the lender to explain it.
  3. Work With Professionals: A financial advisor or attorney can help you navigate the terms and avoid costly mistakes.
  4. Compare Lenders: Shop around to ensure you’re getting the best deal.
  5. Watch for Red Flags: Be cautious of high-pressure sales tactics or vague promises.

Legal Arguments in the Kennedy Funding Lawsuit

The lawsuit hinges on key legal claims made by the plaintiffs against Kennedy Funding. These include:

Legal Arguments in the Kennedy Funding Lawsuit

Breach of Contract

Borrowers argue that the contracts they signed did not match the terms verbally agreed upon. For example, some allege that they were promised a fixed interest rate, but additional clauses in the contracts allowed Kennedy Funding to adjust rates without notice.

Fraudulent Misrepresentation

The plaintiffs claim Kennedy Funding knowingly provided misleading information to entice them into signing unfavorable loan agreements. This includes failing to disclose specific fees or downplaying the risks associated with the loans.

Violation of Consumer Protection Laws

Some borrowers allege that Kennedy Funding violated state and federal laws designed to protect consumers from deceptive practices. These claims often cite the Truth in Lending Act (TILA), which requires lenders to disclose all terms and costs of a loan upfront.

Unconscionable Terms

The lawsuit also includes claims that certain loan terms were so unfair and one-sided that they should be deemed unenforceable. Examples include fees that effectively doubled the loan’s cost and repayment schedules that borrowers argue were designed to ensure default.

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Borrowers’ Stories: Real-Life Impacts of the Alleged Practices

Case 1: A Small Business Owner’s Struggles

One borrower, a small business owner from New Jersey, needed a $500,000 loan to renovate a commercial property. He claims Kennedy Funding promised him a 12-month loan with a 10% interest rate. However, after signing the agreement, he discovered additional fees totaling $75,000, which were deducted upfront. The borrower eventually defaulted because the fees and penalties made repayment impossible.

Case 2: A Non-Profit Organization’s Setback

A non-profit organization sought funding from Kennedy Funding to purchase land for a community center. According to the lawsuit, the non-profit was charged appraisal and commitment fees totaling 5% of the loan amount—costs they were unaware of until after the contract was signed. When the project fell through, the non-profit was still held liable for these fees, plunging them into financial distress.

Case 3: A Real Estate Investor’s Losses

A seasoned real estate investor alleges that Kennedy Funding delayed disbursing funds, causing him to miss critical deadlines for his project. He claims this delay resulted in the loss of a lucrative deal and significant financial damages.

FAQs 

1. What is the Kennedy Funding lawsuit about?

The lawsuit involves allegations that Kennedy Funding engaged in deceptive loan practices, charged hidden fees, and breached contracts.

2. Why is the lawsuit significant?

The case highlights issues of transparency and ethics in real estate lending. Its outcome could influence industry standards and borrower protections.

3. How can borrowers avoid similar situations?

Borrowers should thoroughly review loan agreements, ask questions, and seek professional advice before signing.

4. What could happen if Kennedy Funding loses?

If the court rules against Kennedy Funding, the company may face fines, regulatory scrutiny, and potential changes to its business practices.

A Wake-Up Call

The Kennedy Funding lawsuit is more than just a legal battle—it’s a wake-up call for the real estate lending industry. Borrowers must be vigilant when entering financial agreements, and lenders must prioritize transparency and fairness to build trust.

As this case unfolds, its impact on the industry will serve as a reminder of the importance of ethical practices in financial transactions.

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