# Can bank change loan contract without alerting borrower? **URL:** \ **Category:** Factual Questions\ **Created:** [January 12, 2007, 4:45pm UTC](https://boards.straightdope.com/t/can-bank-change-loan-contract-without-alerting-borrower/387714 "2007-01-12T16:45:45Z")\ **Posts on this page:** 5\ **Page:** 1
**Author:** ![gotpasswords](https://avatars.discourse-cdn.com/v4/letter/g/c57346/32.png) [@gotpasswords](https://boards.straightdope.com/u/gotpasswords)\ **Post date:** [January 12, 2007, 4:45pm UTC](https://boards.straightdope.com/t/can-bank-change-loan-contract-without-alerting-borrower/387714/1 "2007-01-12T16:45:45Z")
In California, what are the rules regarding documents related to a mortgage - specifically, what happens if a loan modification or payment agreement has been made and the bank corrects an error it made without telling the borrower? The scenario is: Someone is late with the mortgage. They call the bank and a payment plan is worked out: Pay $x now, and pay $y by some date. The bank prints the contract and ships it to the borrower. The date that payment $y is due is different from what was described on the phone. instead of 1/10/07, the document said 11/10/07. Probably a simple slip of the finger turned January into November. The borrower signs the contract and returns it to the bank. At this point, the bank has not signed the contract. What takes precedence? The January date that was described on the phone, or the November date printed on the agreement? Now it gets murky. Someone at the bank notices their goof, changes the date back to January and sends out a new agreement contract without alerting the borrower that a change was made. The borrower does not receive the changed document until after they’d signed and returned the original document with the error. Can the bank do this? More specifically, can they call the borrower and say they’re going to foreclose immediately because the borrower broke the agreement, even though the borrower was going by what was printed? What are the borrower’s rights here? ---
**Author:** ![FatBaldGuy](https://avatars.discourse-cdn.com/v4/letter/f/ecd19e/32.png) [@FatBaldGuy](https://boards.straightdope.com/u/FatBaldGuy)\ **Post date:** [January 12, 2007, 5:10pm UTC](https://boards.straightdope.com/t/can-bank-change-loan-contract-without-alerting-borrower/387714/2 "2007-01-12T17:10:45Z")
IANAL, but I am reasonably sure that unless a contract is signed by both parties, it is not binding. ---
**Author:** ![Billdo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/billdo/32/315_2.png) [@Billdo](https://boards.straightdope.com/u/Billdo)\ **Post date:** [January 12, 2007, 7:46pm UTC](https://boards.straightdope.com/t/can-bank-change-loan-contract-without-alerting-borrower/387714/3 "2007-01-12T19:46:01Z")
I’m not your lawyer, and I’m not licensed in California, so is just general information on contract and loan law. Please see a local legal professional for advice relating to your specific situation. In my experience, most mortgage documents provide that they only may be modified by an additional written agreement. Where only one party has signed a modification, it is likely that there would not be “offer and acceptance” found so that the party that had signed could enforce the modification against the party that hadn’t. Also, most mortgage paperwork contains “document correction” or “document re-execution” agreements, which provide if there is an error made in any of the loan documents or how they were executed, the borrower agrees to correct or re-execute the erroneous document. Failure to correct or re-execute a document under the terms of these agreements is usually a default under the loan. These types of agreements could be used to require a borrower to correct a modification agreement with a typographical error. Good luck on resolving the issue. ---
**Author:** ![Billdo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/billdo/32/315_2.png) [@Billdo](https://boards.straightdope.com/u/Billdo)\ **Post date:** [January 12, 2007, 7:47pm UTC](https://boards.straightdope.com/t/can-bank-change-loan-contract-without-alerting-borrower/387714/4 "2007-01-12T19:47:04Z")
AAArgh! Make that: “party that had signed could **not** enforce the modification against the party that hadn’t.” ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [January 12, 2007, 8:23pm UTC](https://boards.straightdope.com/t/can-bank-change-loan-contract-without-alerting-borrower/387714/5 "2007-01-12T20:23:22Z")
[QUOTE=Billdo] In my experience, most mortgage documents provide that they only may be modified by an additional written agreement. [/QUOTE] As an aside, I’ll point out that in many jurisdictions, these clauses are notoriously useless: > [@](#): > > In Pacific N.W. Group A v. Pizza Blends, Inc., the court held that even the written provision that a contract cannot be modified except in writing can itself be orally modified. “A paradox of the common law is that a contract clause prohibiting oral modifications is essentially unenforceable because the clause itself is subject to oral modification.” The theory behind the common-law paradox is that parties should be able to quickly verbally modify their obligations in exigent circumstances. [http://www.sarpllc.com/SpeakSoftly.pdf](http://www.sarpllc.com/SpeakSoftly.pdf) More a bit later.