Cross et al v. Prospect Mortgage, LLC et al

Filing 127

MEMORANDUM OPINION. Signed by District Judge T. S. Ellis, III on 11/27/2013. (rban, )

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA
Alexandria Division

DONNA JOHANSEN CROSS,
Plaintiff,
Case No. l:12-cv-1455

v.

PROSPECT MORTGAGE, LLC, et«/.,
Defendants.

MEMORANDUM OPINION

This action by a borrower against a lender of a home loan arose when the borrower
learned, for the first time more than two years after closing, that the loan was not, as represented

by the borrower, a United States Department of Agricultural ("USDA") guaranteed Rural
Development ("RD") loan. Among the various causes of action the borrower asserted in this
case was a claim under the Equal Credit Opportunity Act ("ECOA") (15 U.S.C. § 1691) based
on the lender's failure to provide the borrower with notice that the lender did not secure the

requested loan guarantee, which the borrower claimed was an "adverse action" triggering the
ECOA notice requirement (15 U.S.C. § 1691(d)). The lender countered, arguing that the failure
to obtain the loan guarantee was not an "adverse action" under the ECOA because the borrower
received the loan on the essential terms requested and because the lender was not responsible for
the denial of the loan guarantee.

The parties filed cross motions for partial summary judgment on the ECOA claim. For
the reasons that follow, the lender's failure to secure the federal loan guarantee was an "adverse

action" that required notification under the ECOA. Accordingly, the borrower's motion for
summary judgment on the ECOA claim was granted, and lender's motion for summary judgment