“The mere fact that [the witness] does not remember the alleged phone conversation, however, is not enough, by itself, to create a genuine issue of material fact.”
How later courts described this case
- “The mere fact that [the witness] does not remember the alleged phone conversation, however, is not enough, by itself, to create a genuine issue of material fact.”
Written by the judges who cited it.
The opinion
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
REGINALD WILLIAMS CIVIL ACTION
VERSUS
NATIONSTAR MORTGAGE, LLC. NO. 19-00663-BAJ-SDJ
RULING AND ORDER
This is a home mortgage loan dispute. Plaintiffs Amended Petition alleges that
Defendant Nationstar Mortgage, LLC violated several provisions of the Equal Credit
Opportunity Act (ACOA), 15 U.S.C. § 1691, et seg., when it processed his application
for a home mortgage loan. (See Doc. 32-4 at pp. 5-6). Plaintiff further alleges that
because of Defendant’s violations, a monetary judgment of $24,500 was entered
against him. (See Doc. 32-4 at p. 6).
Now before the Court is Defendant’s Motion for Summary Judgment (Doc.
82), which argues that Defendant did not violate the ECOA, and that Plaintiffs action
must be dismissed with prejudice. (See Doc. 82-1 at pp. 1-2). Plaintiff opposes
Defendant’s Motion. (Doc. 87). For the reasons stated herein, Defendant’s Motion will
be granted.
I. BACKGROUND
A. Summary Judgment Evidence
The following facts are drawn from Defendant’s Statement of Undisputed
Material Facts (Doc. 82-2, “DEF SOF”), Plaintiffs Response to Defendant’s Statement
of Undisputed Material Facts (Doc. 87-12, “Williams SOF”), and the record evidence
submitted in support of these pleadings.
Prior to the events giving rise to this lawsuit and at all times thereafter,
Plaintiff owned and resided at 14257 Stone Gate Drive, Baton Rouge, LA 70816 (the
“Stone Gate Property”). (See DEF SOF @ 8). This property is financed through
Defendant. (See Doc. 87-1 at p. 1).
On April 8, 2017, Plaintiff spoke on the phone with Nic McKinney, a loan officer
employed by Defendant, inquiring about the possibility of a mortgage loan. (See Doc.
87-1 at p. 2).! Following this phone call, Plaintiff sent initial supporting documents
to McKinney.
On April 5, 2017, Defendant issued a pre-qualification letter to Plaintiff
informing him that he had been “conditionally pre-qualified for a mortgage loan” in
the amount of $270,000, “subject to receipt of the following document requirements
and guidelines in accordance with the lender”: (1) a complete loan application; (2)
supporting documents to verify income, assets, liabilities, and other information
disclosed on the loan application; (8) a fully executed Sales Contract; (4) the subject
property meeting valuation, condition, and marketability requirements; and (5) no
material change in the applicant’s creditworthiness and financial condition. (See Doc.
1 Plaintiff describes this initial request to Defendant as an “application” in his pleadings. (See
Doc. 42 { 6; Doc. 87-1 at p. 2). However, under the ECOA, an application is “an oral or written
request for an extension of credit that is made in accordance with procedures used by a
creditor for the type of credit requested.” 12 C.F.R. § 1002.2(f) (emphasis added). Defendant’s
procedures required that applications be submitted in writing using their application form.
(See DEF SOF ¥ 4). The undisputed evidence shows that Plaintiff did not sign and submit
Defendant’s application form until April 22, 2017, after he selected a home he wanted to
purchase. (See DEF SOF 4 13). Thus, pursuant to the ECOA, this initial inquiry was not an
application.
84-2 at p. 1). The April 5 pre-qualification letter also emphasized that “[t]his
conditional prequalification does not guarantee loan approval or is it a commitment
to make a loan at the rate and terms stated. The conditional prequalification is
subject to program guidelines and requirements in place at [the] time of [the]
application and are subject to change without notice.” See id.
In response to the request for documents set forth in Defendant’s April 5
prequalification letter, Plaintiff submitted tax returns to verify his income, assets,
and liabilities. (See Doc. 56-4 at p. 18). He did not, however, submit a complete
application, a fully executed Sales Contract, or all the supporting documents
identified in the April 5, 2017 letter. (See Doc. 56-4 at p. 20).
Fifteen days later, on April 20, 2017, Plaintiff executed a Louisiana Residential
Agreement to Buy or Sell (the “Purchase Agreement”) offering to purchase a property
at 34083 Springlake Drive, Walker, LA 70785 (the “Springlake Property’) from
Kathryn Wilson for $243,000, with a closing date of May 31, 2017. (See DEF SOF §
9). Peggy Font, Plaintiffs real estate agent for the Springlake Property purchase, sent
the Purchase Agreement to McKinney.
After Plaintiff signed the April 20 Purchase Agreement, but before he
submitted his loan application to Defendant, Plaintiff spoke on the phone with
McKinney regarding Plaintiffs request for a loan to purchase the Springlake
Property.? (See DEF SOF { 11). During this recorded phone call, McKinney confirmed
2 The Parties do not provide the date Font sent the Purchase Agreement to McKinney.
However, it appears from the undisputed evidence that McKinney received the Agreement
between April 20th and April 22nd. (See Doc. 56-4 at p. 20).
3 Throughout the pleadings, Plaintiff attempts to deny or qualify Defendant’s version of the
with Plaintiff that Plaintiff would be selling the Stone Gate Property, or, in the event
Plaintiff could not sell it, renting the Stone Gate Property:
NIC MCKINNEY: Now, with you having the current property—you
know, and again, you may sell it next week or a couple weeks from now.
You know, no big deal. But as long as your house is under contract,
you're good to go. It doesn't necessarily mean it has to be sold yet. But
as long as it's at least under contract to be sold, you're good to go. And
when I say good to go, meaning we will look at the occupancy. You know,
the underwriters will say, well, he has a primary already. You know, we
will be able to say, hey, this house is going to be sold on this date. You
know, and you're good to go. No issues at all.
Now, let's just say it does not have a contract. Still—you could still go
primary with this new property, but you would have to agree to at least
rent that one out. You know, you have to—you have to turn that one into
an investment property or it has to be under contract in order for us to
honor your new purchase as a primary residence, because legally you
can only have one primary residence.
And like I said, I always like to kind of get this out in front of you so that
way you know, you know, kind of what to expect moving forward.
PLAINTIFF: Yes, sir. Yes, sir.
(Doc. 84-10 at pp. 248-49).
At his deposition, Plaintiff confirmed that based on this phone call with
McKinney, he understood that the Stone Gate Property either needed to be under
contract to be sold, or converted to a rental property and rented out, in order for him
to receive the loan he was requesting for the purchase of the Springlake Property:
facts but fails to provide evidence to support his version. Indeed, Plaintiff repeatedly cites
evidence that does not address, let alone deny or controvert, the Defendant’s statements of
fact. Under Local Rule 56(, “facts contained in a supporting or opposing statement of
material facts, if supported by record citations are required by this rule, shall be deemed as
admitted unless properly controverted.” Accordingly, although Plaintiff objected to certain
statements of facts by Defendant, the Court nonetheless deems them as admitted because of
Plaintiffs failure to properly controvert.
DEFENSE COUNSEL: (After playing the recording of the conversation
between Plaintiff and McKinney). Does this refresh your recollection as
to whether or not you had ever been told previously that current home
needed to be under contract to be sold in order to go forward with the
new loan on the new property?
PLAINTIFF: No.
DEFENSE COUNSEL: Okay. What part of that is unclear from that
conversation?
PLAINTIFF: He said I can’t own two homes. One have to be either
rented out—
DEFENSE COUNSEL: Okay.
PLAINTIFF: I can’t have two homes that are primary.
DEFENSE COUNSEL: Okay. So it either needed to be under contract
to be sold or converted to a rental property where it would be rented out.
Right?
PLAINTIFF: Yes.
DEFENSE COUNSEL: So did you ever convert it to a rental property
to be rented out, the Stone Gate Propety?
PLAINTIFF: No. I did not.
DEFENSE COUNSEL: Okay. So, the two options were in order to _
close, you either got to be under contract to sell the Stone Gate Property,
or you have to have converted it to a rental property in order to go
forward. That is what Mr. McKinney just told you. Correct?
PLAINTIFF: He said that and more.
DEFENSE COUNSEL: Okay. So...and this is before you filled out the
application that we just looked at on April 22nd. Right?
PLAINTIFF: No. That is during the time I was inquiring on Miss
Wilson’s home.
DEFENSE COUNSEL: Okay. So before April 22nd?
PLAINTIFF: 22nd. Maybe. Yes.
DEFENSE COUNSEL: Okay. So this is Mr. McKinney saying, your
house either needs to be—Stone Gate, it needs to be under contract to
be sold, or needs to be converted to a rental property and rented out, in
order to go forward with this loan you are discussing here. Right?
PLAINTIFF: Yes. Because I could not occupy two primary residences.
(Doc. 84-10 at pp. 250-51).
On April 22, 2017, Defendant sent to Plaintiff a Uniform Residential Loan
Application (the “Loan Application”) that included information regarding Plaintiffs
loan request, his assets, and his liabilities for Plaintiff to review, complete, and sign.
(See DEF SOF § 13). Defendant also sent a Loan Estimate that projected that the
total monthly payment for the Springlake Property mortgage would be $1,673. See
id. Later that day, Plaintiff returned the completed Loan Application, electronically
signed and initialed at the bottom of each page. (See DEF SOF § 14).
Plaintiffs April 22 Loan Application listed the Stone Gate Property as
Plaintiffs current primary residence and noted that the home is encumbered by a
mortgage loan from Defendant with an unpaid balance of $170, 896. (See DEF SOF §
17). In the “Schedule of Real Estate Owned” section of the Loan Application, however,
Plaintiff listed the Stone Gate Property as “Sold,” despite not having even listed the
Stone Gate Property for sale at this time. (See DEF SOF 9§ 21, 35).
On April 26 and 27, 2017, Plaintiff and Wilson executed an addendum to the
Springlake Property Purchase Agreement, reducing the Springlake Property’s sale
price to $240,500. (See DEF SOF 31).
On April 28, 2017, Defendant submitted the Loan Application to its
underwriting department for review. (See DEF SOF 32). On May 2, 2017,
Defendant’s underwriters conditionally approved the Loan Application and internally
issued an Underwriting Conditional Approval (the “Conditional Loan Approval’).
(See DEF SOF § 33). The Conditional Loan Approval included a list of outstanding
documents and information that Defendant still required from Plaintiff, including
documentation showing that the Stone Gate Property was sold, and that the existing
mortgage loan for the Stone Gate Property was paid off. See id.
Defendant did not send the Conditional Loan Approval to Plaintiff. Rather,
Defendant’s internal records indicate that on May 4 and May 12, 2017, Defendant
attempted to contact Plaintiff by phone to inform him of the documents and
information that remained outstanding. (See Doc. 84-8 at p. 6). However, the
Defendant could not be reached. See id. Nonetheless, according to Defendant’s
records, on May 15, 2017, Sheena Hodge-Njoroge, a loan processor employed by
Defendant, successfully contacted Plaintiff and reviewed the outstanding items listed
on the Conditional Loan Approval. (See DEF SOF § 34). At his deposition, Plaintiff
did not remember the May 15 phone call:
DEFENSE COUNSEL: (After showing Plaintiff Defendant’s internal
records). Did you have a call with Sheena on May 15th, 2017?
PLAINTIFF: ['m not aware of the date when I talked to Miss Sheena.
DEFENSE COUNSEL: Did you have a call with Sheena sometime
around May 15, 2017?
PLAINTIFF: I can’t say I did or not.
DEFENSE COUNSEL: Okay. Do you have—
PLAINTIFF: I don’t remember.
DEFENSE COUNSEL: Do you have a recording of that call?
PLAINTIFF: I have to check.
DEFENSE COUNSEL: Okay. So I know it is a long time ago. It is 2017.
When you say you don’t remember having a call, does that mean a call
didn’t occur, or you just don’t remember it?
PLAINTIFF: I just don’t remember it.
(Doc. 56-4 at p. 60).
Two days later, on May 17, 2017, Plaintiff hired a real estate agent to sell the
Stone Gate Property, and thereafter listed the property for sale. (See DEF SOF § 35).
Prior to hiring the real estate agent, Plaintiff himself did not attempt to sell the Stone
Gate Property. (See Doc. 56-4 at p. 29). Instead, Plaintiff delayed putting the Stone
Gate Property on the market because he was traveling abroad and, upon returning
to Louisiana, wanted to “fix up” the property before listing it for sale. (See Doc. 56-4
at p. 79). Ultimately, Plaintiff never received an offer on the Stone Gate Property, nor
did he attempt to convert it to a rental property. (See DEF SOF 4{ 36-37).
On May 23, 2017, Plaintiff again spoke on the phone with Hodge-Njoroge and
informed her that he had not received any offers on the Stone Gate Property. (See
DEF SOF § 38). At his deposition, Plaintiff conceded that “it is a possibility” that
during this phone call, Hodge-Njorge told him that he would not be able to close on
the purchase of the Springlake Property until he sold the Stone Gate Property:
DEFENSE COUNSEL: (Reading from Defendant’s internal records).
“Sheena Hodge-Njoroge, loan processor, resubmittal. The client still
hasn’t gotten any final offers on his current home. He wouldn’t be able
to move forward without the sale of his home. Moving closing date out 2
weeks.”
Do you see that?
PLAINTIFF: Yes.
DEFENSE COUNSEL: Do you remember having a call with Sheena on
or around May 238, 2017?
PLAINTIFF: It is a possibility.
DEFENSE COUNSEL: Okay. But you don’t specifically remember
having a call?
PLAINTIFF: No. I said it’s a possibility.
DEFENSE COUNSEL: Okay. Do you remember talking to Sheena
about the fact that you didn’t have any offers on your current home?
PLAINTIFF: Yes.
DEFENSE COUNSEL: Okay. So do you have any reason to think that
conversation wouldn’t have occurred around May 23rd, 2017?
PLAINTIFF: I can’t pinpoint the date.
DEFENSE COUNSEL: Okay.
PLAINTIFF: I did have a conversation with her.
DEFENSE COUNSEL: Where you discussed the status of your efforts
to sell the Stone Gate Property?
PLAINTIFF: Yes.
DEFENSE COUNSEL: And what did you tell her on that call?
PLAINTIFF: Probably that I didn’t have an offer.
DEFENSE COUNSEL: Okay.
PLAINTIFF: I just had people coming by and looking.
DEFENSE COUNSEL: Okay. So she says here, as part of that call did
you discuss the fact that you are not going to be able to close until you
get the current home under contract?
PLAINTIFF: I don’t know. It is a possibility she said that.
DEFENSE COUNSEL: Okay. Do you have a recording of this call from
the 23rd?4
PLAINTIFF: Maybe. It is a possibility. Yes.
(Doc. 56-4 at p. 60).
On May 24, 2017, Font sent Plaintiff an email indicating, “I just received a call
from Nic McKinney, your lender. He told me that you will not be able to close on your
new home at this time until you receive a contract of sale on your current home.” (See
DEF SOF 40).
The next day, Font emailed Hodge-Njoroge inquiring about the specific
documents Defendant still required from Plaintiff regarding the sale of the Stone
Gate Property:
Sheena,
In our telephone conversation earlier today you stated that Mr. Reginald
Williams would have to provide a purchase agreement on his current
home along with a projected close date and a Good Faith Estimate from
the Buyers [sic] lender to close on the home he would like to purchase.
Please respond confirming these documents would suffice in order to
receive the financing to close on the new home he would like to purchase.
(Doc. 85-4 at pp. 2-8).
recording was not submitted to the Court.
10
Later that day, Hodge-Njoroge replied via email:
Peggy,
The closing would need to happen before or on the same day in order for
the underwriter to not use the house as part of the income review.
(Doc. 85-4 at p. 1)
Font then forwarded Hodge-Njoroge’s email to Plaintiff:
Reginald,
This is the email I received from Sheena earlier. So, now not only does
your home have to be under contract but it must sell to purchase the
other home. As you know, the process between receiving an offer on your
home to closing is usually a minimum of a 30 days process unless you
have a cash buyer. With this in mind, I feel that I should contact the
Listing Agent of the Springlake home tomorrow morning and inform
them of what is going on. Do you want me to ask him if the Seller would
agree to extend the closing?”
(Doc. 85-4 at p. 1).
Plaintiff did not reply to Font’s email. Instead, on May 30, 2017, Font emailed
Hodge-Njoroge and requested that Defendant send Plaintiff a written declination of
funding:
Sheena and Nic,
The Title Company has informed the Seller's Agent that there will be no
funding for the purchase of the home that Mr. Reginald Williams is
under contract to purchase tomorrow, 5/31/2017. This is a second
request for a written declination of funding for this purchase. Please
respond as soon as possible so that we may present this statement to the
Seller.
(See Doc. 1-1 at pp. 16-17).
11
Hodge-Njoroge replied and explained that Plaintiff's Loan Application had not been
declined but was delayed, stating:
Peggy,
As explained during our call together last week this loan hasn’t been
decline[d]. It’s delayed in closing due to the loan conditions not meet [sic]
yet. This loan needs additional time in order for the buyer to complete
review, but only if the seller is willing to offer an extension.
(See Doc. 85-5 at p. 1).
Font did not forward the email to Plaintiff until June 2, 2017. See id.
On May 31, 2017, the intended closing date of the Springlake Property,
Plaintiff appeared at the title company offices with Font, Wilson, and Wilson’s real
estate agent, Brett Busbin. (See DEF SOF 4 48). Upon learning that the closing would
not take place due to Plaintiffs failure to secure a loan from Defendant, Wilson and
Busbin informed Plaintiff that they needed documentation from Defendant that
Plaintiffs Loan Application was still being processed or that it had been denied. (See
Doc. 87-10 at p. 1). Wilson and Busbin also warned Plaintiff that they would hold him
to the terms and conditions of the Purchase Agreement and would not let him “get
out of’ it. See id. Later that day, Plaintiff electronically signed an Extension of
Agreement to Purchase or Sell (‘the Extension Agreement’) that would have
extended the Springlake Property closing date to June 9, 2017. (See DEF SOF { 43—
44), He then instructed Font to submit it to Busbin, but it is unclear if she ever did
so. (See DEF SOF § 45). In any case, as later events illustrate, Wilson did not execute
the Extension Agreement.
12
On June 6, 2017, Defendant internally canceled Plaintiffs loan and
resubmitted his Loan Application to its underwriters with the updated information
that the Stone Gate Property had not been sold or rented. (See Doc. 84-8 at p. 5).
Defendant’s underwriters then recalculated Plaintiff's debt-to-income ratio based off
the debts listed on Plaintiffs loan application, including the existing mortgage loan
debt related to the Stone Gate Property. (See Doc. 84-1 § 33). They ultimately
concluded that Plaintiffs debt-to-income ratio was too high to qualify for the loan.
(See Doc. 84-1 § 32). His Loan Application was denied. See id.
On June 8, 2017, Busbin, via an email to Font, informed Plaintiff that Wilson
had contacted an attorney about representing her in connection to the Purchase
Agreement. (See DEF SOF 4 46). Busbin explained that Plaintiff was in default under
the Purchase Agreement for not closing on May 31 and asked if Plaintiff would make
an offer of compensation for the default prior to Wilson retaining counsel. See id.
Apparently, Plaintiff elected to not do so. (See DEF SOF { 47).
On June 12, 2017, Plaintiff told McKinney in a recorded phone conversation
that Wilson had not received the Extension of Agreement to Purchase or Sell, had put
the Springlake Property back on the market, and was suing him for defaulting on the
Purchase Agreement. (See DEF SOF { 48). McKinney responded by saying that
Plaintiffs Loan Application had been conditionally approved since May 2, 2017, but
that the loan had always been contingent on the sale or rental of the Stone Gate
Property. (See Doc. 56-4 at p. 298).
13
On June 27, 2017, Defendant sent Plaintiff a Statement of Credit Denial,
Termination, or Change informing Plaintiff that his Loan Application had been
denied because he had “excessive obligations” and “insufficient income for [his] total
obligations.” (See Doc 87-11 at p. 1). The statement explained that “[Defendant’s]
credit decision was based in whole or part on information obtained in a report from
the consumer-reporting agency....” See id. It also listed several key factors from the
consumer-reporting agency that adversely affected Plaintiff's credit score: “(1) ratio
of balance to limit on bank revolving or other revolving accounts too high” (2) too
many accounts with balances; (8) too many inquiries last 12 months; and (4) too many
accounts recently opened.” (See Doc 87-11 at p. 2). According to Craig Cross,
Defendant’s Vice President of Customer Experience, Plaintiffs failure to sell the
Stone Gate Property and pay-off the mortgage loan on that property made Plaintiffs
debt-to-income ratio too high to qualify for the loan. (See DEF SOF § 51).
On July 11, 2017, Wilson sued Plaintiff for breach of the Purchase Agreement
in the 21st Judicial District Court for the State of Louisiana. (See DEF SOF § 52). On
October 2, 2018, Wilson filed a motion for summary judgment, and Plaintiff failed to
respond. (See DEF SOF 4 55). The state court granted Wilson’s summary judgment
motion and ordered Plaintiff to pay $24,500 and 25% in attorney fees. (See Doc. 1-1
at p. 35). Plaintiff failed to pay the judgment, and subsequently filed several Chapter
13 bankruptcy petitions. (See DEF SOF 9 57-62).
B. Procedural History
Plaintiff initiated this action on October 1, 2019, alleging that Defendant
14
violated the ECOA and its supporting regulations by failing to timely notify him of
its action, adverse or not, on his Loan Application, failing to timely provide him with
a written Statement of Reasons for such action, and failing to provide him with a
clear and conspicuous disclosure. (See Doc. 32-4 at pp. 5-6; Doc. 87-1 at p. 7). Plaintiff
also alleges several damages caused by Defendant’s purported violations, including
the $24,500 judgment entered against him in the breach of contract lawsuit. See id.
In the instant Motion, Defendant argues that the undisputed facts
demonstrate that it did not violate the ECOA when considering and ultimately
rejecting Plaintiffs Loan Application and denies Plaintiffs claims for damages. (See
Doc. 82-1 at p. 1). Plaintiff opposes Defendant’s Motion in its entirety. (Doc. 87).
II. STANDARD OF REVIEW
Federal Rule of Civil Procedure 56 provides that, “[t]he court shall grant
summary judgment if the movant shows there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ.
P. 56(a). When determining whether the movant is entitled to judgment as a matter
of law, the Court views facts in the light most favorable to the non-movant and draws
all reasonable inferences in their favor. See Coleman v. Houston Indep. Sch. Dist., 118
F.3d 528, 533 (5th Cir. 1997). After a party moves for summary judgment, the
non-movant must set forth specific facts showing there is genuine issue for trial. See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). “At this stage, the Court
does not evaluate the credibility of witnesses, weigh the evidence, or resolve factual
disputes.” Minnis v. Bd. Of Sup’rs of Louisiana State Univ. & Agric. & Mech. Coll.,
15
55 F. Supp. 8d 864, 873 (M.D. La. 2014). Rather, the Court simply asks whether the
evidence in the record is sufficient for a reasonable jury, “drawing all inferences in
favor of the non-moving party, could arrive at a verdict in that party’s favor.” Int'l
Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257, 1268 (5th Cir. 1991). If the answer is
yes, the motion for summary judgment must be denied. See id.
On the other hand, the non-movant cannot satisfy their evidentiary burden by
some metaphysical doubt as to the material facts, conclusory allegations,
unsubstantiated assertions, or a mere scintilla of evidence. See Little v. Liquid Air
Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). If the non-movant “fails to make a showing
gufficient to establish the existence of an element essential to that party’s case,”
summary judgment is appropriate. Celotex Corp. v. Catrett, 477 U.S. 317, 824 (1986).
TI. LAWAND ANALYSIS
The purpose of the ECOA is to eradicate credit discrimination. Phoenix v. Wells
Fargo Bank, N.A., No. 16-cv-75, 2016 WL 7379001, at *38 (M.D. La. Dec. 20, 2016)
(Brady, J.) (citing Anderson v. United Finance Co., 666 F.2d 1274, 1277 (Oth Cir.
1982). To this end, the ECOA requires (among other things) “that a creditor must
notify an applicant for credit of ‘adverse action’ taken against his application and, in
so doing, must give a written statement of the specific reasons therefor.” Jochum v.
Pico Credit Corp. of Westbank, 730 F.2d 1041, 1042 (5th Cir. 1984) (citations omitted).
The ECOA defines adverse action as “a denial or revocation of credit, a change in the
terms of an existing credit arrangement, or a refusal to grant credit in substantially
the amount or on substantially the terms requested.” 15 U.S.C. § 1691(d)(6). “Any
16
creditor who fails to comply with ECOA's requirements shall be liable to an ‘aggrieved
applicant’ for actual or punitive damages, and an ‘aggrieved applicant’ may obtain
“such equitable and declaratory relief as is necessary to enforce’? EOCA's
requirements.” Chen v. Chase Bank USA, N.A., 393 F. Supp. 3d 850, 852 (N.D. Cal.
2019) (citing 15 U.S.C. § 1691e(a)-(c)).
A. Plaintiffs Loan Application Was Not Complete Upon
Submission
Plaintiffs central claim is that Defendant failed to properly notify him of its
adverse action on his Loan Application within 30 days of receiving it, thus violating
its obligations under the ECOA. (See Doc. 87-1 at p. 7). Because the ECOA sets forth
different notification requirements of lenders for “complete” versus “incomplete”
applications, the Court must first determine whether Plaintiffs Loan Application was
complete when he submitted it to Defendant in April 2017.5
Under the ECOA, “[a] completed application means an application in
connection with which a creditor has received all the information that the creditor
regularly obtains and considers in evaluating applications for the amount and type
of credit requested...including...any additional information requested from the
applicant.” 12 C.F.R. § 1002.2(f). “[A]n application is considered ‘complete’ not when
the applicant completes it...but when the creditor has obtained verifying information
and whatever other types of reports or information it ordinarily requires to evaluate
a loan.” High v. McLean Financial Corp., 659 F. Supp. 1561, 1564 (D.D.C. 1987); see
5 Notably, the Parties each assume for present purposes that Plaintiffs Loan Application was
“complete” upon submission. (See Doc. 82-1 at p. 18; Doc. 87-1 at p. 2). For reasons set forth
below, the Court cannot credit this assumption.
17
also Kirk v. Kelley Buick of Atlanta, Inc., 336 F. Supp. 2d 1327, 1832 (N.D. Ga. 2004).
For example, in Kirk v. Kelley Buick of Atlanta, the plaintiff attempted to
purchase a car, and, via the dealership, applied to a creditor for financing. See Kirk,
336 F. Supp. 2d at 1328. After receiving the plaintiffs credit application, the creditor
issued to the dealership a notice of approval, subject to the verification of information
contained in the credit application. See id. The dealership then orally notified the
plaintiff about the additional documentation required to finalize the loan. See id. at
1328-29. The plaintiff never submitted all of the requested verification documents,
and the creditor ultimately denied the loan. See id. at 1829. The Kirk Court found
that because the creditor required additional information from the plaintiff before
granting credit to the applicant, the application was incomplete. See id. at 1332.
Here, the operative facts are nearly identical to those at issue in Kirk.
Defendant conditionally approved Plaintiffs Loan Application, but orally informed
Plaintiff that final approval of the loan was conditioned upon verification that the
Stone Gate Property was sold and that the Stone Gate Property mortgage was paid
off. (See DEF SOF § 34). Because Plaintiff failed to sell the property, he was
ultimately unable to satisfy a condition required for approval of the loan. Once the
Springlake Property closing date had passed, and Plaintiff was still unable to sell the
Stone Gate Property, Defendant denied Plaintiffs Loan Application.
Thus, as in Kirk, the Court finds that Plaintiffs Loan Application remained
incomplete because Plaintiff failed to submit the additional documents required in
the Conditional Loan Approval. See Kirk, 336 F. Supp. 2d at 1828; see also High, 659
18
F. Supp. at 1564; Dufay v. Bank of Am. N.T. & S.A. of Oregon, 94 F.3d 561 (9th Cir,
1996). Accordingly, the Court must analyze Plaintiffs ECOA claim under the
standards applicable to incomplete applications.
B. Defendant satisfied the ECOA’s Notice Requirements for
Incomplete Applications
Having determined that Plaintiffs Loan Application was incomplete upon
submission, Plaintiffs notification claim hinges on whether Defendant violated the
ECOA’s notice requirements for incomplete applications. In relevant part, the
ECOA’s implementing regulations set forth two notice requirements for “incomplete
applications.” First, the creditor must notify the applicant within 30 days of any
“adverse action” on an incomplete application. See 12 C.F.R. § 202.9(a)(1)Gi) &
(c)(1)@). Second, as an alternative, the creditor may notify the applicant within 30
days “[o]f the incompleteness” and request additional information:
(2) Notice of incompleteness. If additional information is needed
from an applicant, the creditor shall send a written notice to the
applicant specifying the information needed, designating a reasonable
period of time for the applicant to provide the information, and
informing the applicant that failure to provide the information
requested will result in no further consideration being given to the
application. The creditor shall have no further obligation under this
section if the applicant fails to respond within the designated time
period. If the applicant supplies the requested information within the
designated time period, the creditor shall take action on the application
and notify the applicant in accordance with paragraph (a) of this section.
(8) Oral request for information. At its option, a creditor may
inform the applicant orally of the need for additional information. If the
application remains incomplete the creditor shall send a notice in
accordance with paragraph (c)(1) of this section.
(12 C.F-.R. § 202.9(c)(2)-(8)).
Here, Defendant complied with the first notice requirement—at least insofar
19
as Defendant notified Plaintiff on June 27, 2017 of its June 6 decision to deny
Plaintiffs Loan Application.
The remaining question is whether Defendant complied with the “notice of
incompleteness” requirements prior to its June 6 rejection of Plaintiffs Loan
Application. Plaintiff argues that Defendant was required under 12 C.F.R. § 202.9(c)
to send a written notice of incompleteness. (See Doc. 87-1 at p. 7). This argument fails
because paragraph (c)(8) clearly provides that “[a]t its option, a creditor may inform
the applicant orally of the need for additional information. If the application remains
incomplete, the creditor shall send a notice in accordance with paragraph (c)(1).” 12
C.F.R. § 202.9(c)(8) (emphasis added). See also Piotrowski v. Wells Fargo Bank, NA,
No. CIV.A. DKC 11-8758, 2015 WL 4602591 *7 (D. Md. July 29, 2015) (citing Kirk,
336 F. Supp. 2d at 1327).
Here, the evidence demonstrates that Defendant orally notified Plaintiff on
May 15, 2017 of the need for additional information to complete his Loan Application.
According to Defendant’s records, Hodge-Njoroge called Plaintiff and “went over the
outstanding items” for his Loan Application. (See Doc. 84-8 at p. 6). Plaintiff does not
deny that this phone call occurred. Rather, at his deposition, Plaintiff claimed he “did
not remember” the phone call. (See Doc. 56-4 at p. 60). When asked specifically
whether the phone call happened at all, Plaintiff reiterated, “I just don’t remember.”
(See Doc. 56-4 at p. 60).
As the U.S. Court of Appeals for the Fifth Circuit has cautioned, “[I]ack of
memory by itself is insufficient to create a genuine dispute of act.” Hemphill v. State
20
Farm Mut. Auto. Ins. Co., 805 F.8d 535 (5th Cir. 2015) (citing Dickey v. Baptist Mem'l
Hosp.-N. Mississippi, 146 F.3d 262, 266 n.1 (5th Cir. 1998) (“The mere fact that [the
witness] does not remember the alleged phone conversation, however, is not enough,
by itself, to create a genuine issue of material fact.”)). Thus, Plaintiffs testimony that
he does not remember the May 15th oral notification does not create a genuine
dispute as to whether notice occurred.
Indeed, the record evidence reveals the complete lack of a genuine dispute. Two
days after the May 15th phone call, Plaintiff finally hired a realtor to list the Stone
Gate Property on the housing market. (See DEF SOF § 35). This substantiates
Defendant’s version of events—that is, the May 15 call occurred, and that on this call
Hodge-Njoroge warned Plaintiff that his current house must be sold (or rented) before
his new loan was approved. The record also reflects that Defendant followed up with
Plaintiff about the Stone Gate Property sale on May 28rd and with Font on May 24th.
On June 6th, when the Loan Application remained incomplete, due to Plaintiffs
failure to sell the Stone Gate Property, Defendant canceled the loan. (See Doc. 84-8
at p. 5). Thereafter, Defendant then timely and properly notified Plaintiff of its
adverse action on his incomplete Loan Application in accordance with 12 C.F.R. §
202.9(c)(1), thus fulfilling its obligations under the ECOA. For these reasons,
Plaintiffs ECOA claim must be dismissed.
IV. CONCLUSION
Accordingly,
IT IS ORDERED that the Defendant’s Motion for Summary Judgment
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(Doc. 82) is GRANTED.
IT IS FURTHER ORDERED that Plaintiffs’ action be and is hereby
DISMISSED WITH PREJUDICE.
Judgment will issue separately.
Baton Rouge, Louisiana, this 25% of January, 2023
ba. —
JUDGE BRIAN CKSON
UNITED STATESDISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
22,