Zabriskie v. Federal National Mortgage Association, No. 17-15807 (9th Cir. 2019)
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The Ninth Circuit filed an order amending its prior opinion, denying panel rehearing, and denying, on behalf of the court, rehearing en banc; and an amended opinion and dissent.
The panel reversed the district court's judgment for plaintiffs in an action brought under the Fair Credit Reporting Act (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.
The panel held that Fannie Mae is not a consumer reporting agency because, even if it assembles or evaluates consumer information through Desktop Underwriter, it does not do so for the purpose of furnishing consumer reports to third parties. Therefore, the panel held that the district court erred by granting plaintiffs' motion for summary judgment and denying Fannie Mae's cross-motion on this issue. The court also vacated the award of attorney's fees and costs to plaintiffs.
Court Description: Fair Credit Reporting Act The panel filed (1) an order amending its prior opinion, denying panel rehearing, and denying, on behalf of the court, rehearing en banc; and (2) an amended opinion and dissent. In its amended opinion, 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. The panel held that Fannie Mae was not a consumer reporting agency because, even if it assembled or evaluated consumer information through Desktop Underwriter, it did not act with the purpose of furnishing consumer reports to third parties. Rather, its purpose was to facilitate a transaction between the lender and itself. ZABRISKIE V. FED. NAT’L MORTGAGE ASS’N 3 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. Dissenting, Judge Lasnik wrote that when, in addition to reviewing the relevant data and issuing a recommendation on whether it would purchase the loan, Fannie Mae also reported that plaintiffs had a prior foreclosure, it took on the role, and the responsibilities, of a consumer reporting agency.
This opinion or order relates to an opinion or order originally issued on January 9, 2019.
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