Zabriskie v. Federal National Mortgage Association, No. 17-15807 (9th Cir. 2019)
Annotate this CaseFannie Mae is not a consumer reporting agency within the meaning of the Fair Credit Reporting Act (FCRA). The Ninth Circuit reversed the district court's judgment in favor of plaintiffs in an action brought under the FCRA, alleging that Fannie Mae falsely communicated to potential mortgage lenders, via its proprietary software, called Desktop Underwriter, that plaintiffs had a prior foreclosure on a mortgage account. In light of the Federal Trade Commission's guidelines, the panel held that Fannie Mae was not a consumer reporting agency because it did not regularly engage in the practice of assembling or evaluating consumer information. Furthermore, Fannie Mae did not act with the purpose of furnishing consumer reports to third parties. The panel also vacated the award of attorney's fees and costs to plaintiffs.
Court Description: Fair Credit Reporting Act. The panel reversed the district court’s judgment in favor of the plaintiffs in an action under the Fair Credit Reporting Act. The plaintiffs alleged that the Federal National Mortgage Association, or Fannie Mae, falsely communicated to potential mortgage lenders, via its proprietary software, called Desktop Underwriter, that the plaintiffs had a prior foreclosure on a mortgage account. Prior to a jury trial, the district court ruled, on partial summary judgment, that Fannie Mae was a “consumer reporting agency” within the meaning of the FCRA. Finding the Federal Trade Commission’s guidelines persuasive, the panel held that Fannie Mae was not a consumer reporting agency because it did not regularly engage in the practice of assembling or evaluating consumer information, but rather provided software that allowed mortgage lenders to assemble or evaluate such information. Further, Fannie Mae did not act with the purpose of furnishing consumer reports to third parties. Rather, its purpose was only to facilitate a transaction between the lender and itself, and it provided the Desktop Underwriter software to help lenders determine whether it would purchase loans that they originated. The panel reversed and remanded with instructions to enter judgment in favor of Fannie Mae. It also vacated an award of attorney’s fees and costs to the plaintiffs.
The court issued a subsequent related opinion or order on October 8, 2019.
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