Shawn Poor v. Wells Fargo Home Mortgage, a Division of Wells Fargo Bank, N.A.; and U.S. Bank N.A., as Trustee for the Structured Asset Investment Loan Trust Mortgage Pass-Through Certificates, Series 2005-8

2018 DNH 219

• Court: District Court, D. New Hampshire
• Decided: March 28, 2017
• Docket: 17-cv-472-SM
• Status: Published

Opinion

UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Shawn Poor

v. Case No. 17-cv-472-SM Opinion No. 2018 DNH 219 Wells Fargo Home Mortgage, a Division of Wells Fargo Bank, N.A.; and U.S. Bank N.A., as Trustee for the Structured Asset Investment Loan Trust Mortgage Pass-Through Certificates, Series 2005-8

O R D E R

Defendant banks move for summary judgment on plaintiff’s

remaining claim under the Equal Credit Opportunity Act (“ECOA”)

and related implementing regulations. See 15 U.S.C. §

1691(d)(1); 12 C.F.R. § 1002.9(a)(1)(i).

While the parties engage on several issues (including

whether plaintiff filed a complete or incomplete loan

modification application; when that application was submitted;

when (or, if) it was “received” by the bank; and, whether

plaintiff suffered any cognizable damages arising from the

bank’s failure to give notice of any action on the application

under § 1691(d)(1)), the bank is entitled to judgment as a

matter of law for a preliminary reason. The parties do not dispute that plaintiff was in default on

his mortgage loan at the time he claims to have submitted an

application for loan modification.

Plaintiff says the bank violated its obligation under ECOA

to notify him of any action on his application for credit (the

loan modification application) in a timely manner after he

allegedly submitted it in April of 2017. See 15 U.S.C.

§ 1691(d)(1). But, such notice was not required. To be sure,

section 1691(d)(1) provides that, within thirty days after

receipt of a completed application for credit, a creditor shall

notify the applicant of its action on the application. And, if

“adverse action” is taken, the applicant is entitled to a

statement of reasons for such action from the creditor. Id.

But, it is not an “adverse action” to refuse “to extend

credit under an existing credit arrangement where the applicant

is delinquent or otherwise in default.” 15 U.S.C. § 1691(d)(6).

And, importantly,

The applicable regulations clarify that notification is “required” only for approval, counteroffer, or “adverse action.” 12 C.F.R. § 202.9(a)(1)(i). In turn the regulations setting forth the definitions applicable to § 202.9 and the surrounding ECOA regulations state that “adverse action . . . does not include . . . [a]ny action or forbearance relating to an account taken in connection with inactivity, default, or delinquency as to that account.” 12 C.F.R. §202.2(c)(2)(ii). “Thus to the extent the statute was at all ambiguous about whether a notification is required [under § 1691(d)(1)] where the applicant is already in default, the implementing regulations state clearly that no notice is required in that circumstance.”

2 Sergeant v. Bank of America, N.A., C17-5232 BHS, 2017 WL 3895699

at *3 (W.D. Wash. Sept. 6, 2017) (quoting Smith v. Wells Fargo

Bank, N.A., 15-CV-01779-YGR, 2016 WL 283521, at 7 (N.D. Cal.

Jan. 25, 2016) (citing numerous cases)). See also, MacDonald v.

Wells Fargo Bank, N.A., 14-CV-04970-HSG, 2017 WL 1150362 (N.D.

Cal. March 28, 2017) (same).

Plaintiff was in default on his loan when he allegedly

filed his loan modification application (and there appears to be

no period through foreclosure during which he was not in default

and filed a modification application). Consequently, no ECOA

notice was required with respect to that application and

plaintiff’s remaining cause of action asserting a violation of

§ 1691(d)(1) necessarily fails.

Conclusion

Defendant’s motion for summary judgment on plaintiff’s

remaining ECOA claim (doc. no. 28) is granted. Judgment shall

be entered in favor of defendant and the case closed.

SO ORDERED.

____________________________ Steven J. McAuliffe United States District Judge

November 6, 2018

cc: William C. Sheridan, Esq. David D. Christensen, Esq.