Unilateral Arbitration Provisions in Consumer Mortgage Loans Upheld

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The Supreme Court of Pennsylvania, in Salley v. Option One Mortgage Corp., recently upheld a mortgage company’s right to enforce a “one-sided” arbitration provision in a loan agreement with a consumer. The agreement in question required the borrower to proceed with any claim against the mortgage company through arbitration while allowing the mortgage company to bring suit against the borrower in state or federal court. The effect of Salley has been to vindicate the use of such non-reciprocal provisions in Pennsylvania consumer mortgage loan agreements.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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