Resources > Glossary > Arbitration Rider

Glossary of Notary Public, Mortgage, Signing Agent, and Loan Signing Terms.

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Arbitration Rider

Phonetics: ar·bi·tra·tion rid·er   \ ‚är-bə-'trā-shən\    \rīdər\

By signing an arbitration rider, the borrower consents to having an arbitrator resolve all future disagreements regarding the loan rather than settle in court. Since the lender is the party that chooses the arbitrator, the arbitrator is likely to show favor to the lender which would not be in the borrower's best interests. Lenders often elect to include an arbitration rider in loan packages because arbitration is faster and less expensive than going to court, not to mention the fact that the arbitrator is likely to be biased in favor of the lender.