Cross et al v. Prospect Mortgage, LLC et al, No. 1:2012cv01455 - Document 127 (E.D. Va. 2013)

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