Green Tree Financial Corp. won a case this month involving soliciting a high-rate home-improvement loan, but in May lost a case in another court over the same clause, which compels the borrowers in that case to arbitrate.

The borrowers in the May case claimed that they were victims of a scheme in which home-improvement contractors conspired with a subprime lender to solicit high-rate second mortgages to finance substandard home-improvements work, according to attorneys at Goodwin, Proctor & Hoar.

The borrowers argued that the arbitration clause was buried in fine print. However, the United States Appeals Court for the Third Circuit found that the agreement was only one page and also cited precedent favoring the arbitration clause.

In June, however, the 11th Circuit U.S. District Court found the same clause to be unenforceable and unconscionable. - ES

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