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Cavin v. Home Loan Center

July 2, 2008

LAWRENCE N. CAVIN AND THERESA CAVIN, INDIVIDUALLY AND ON BEHALF OF A CLASS, PLAINTIFFS-APPELLANTS,
v.
HOME LOAN CENTER, INC., D/B/A HOMELOANCENTER.COM, DEFENDANT-APPELLEE.



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 05 C 4987-Ruben Castillo, Judge.

The opinion of the court was delivered by: Manion, Circuit Judge.

ARGUED OCTOBER 24, 2007

Before FLAUM, MANION, and WILLIAMS, Circuit Judges.

Home Loan Center, Inc. ("HLC") sent Theresa and Lawrence Cavin each a mailer announcing its SmartLoan mortgage program. The Cavins did not respond to the letters, but instead filed suit in federal court alleging that HLC violated the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq., by failing to present them with a firm offer of credit. The parties filed cross-motions for summary judgment, and the district court granted judgment in favor of HLC. The Cavins appeal, and we affirm.

I.

In 2005, HLC mailed letters offering its SmartLoan program to thousands of Illinois residents. Theresa and Lawrence Cavin were both among those recipients. The mailer was double-sided and informed the recipient that he was "pre-approved to receive HomeLoanCenter.com's exclusive SmartLoan program." In the top right corner of the letter, there was a box in which the figures

1.00%/4.27% appeared alongside the following two columns:

Loan AmountNEW Payment $100,000$322 $200,000$643 $300,000$965 $400,000$1287 $500,000$1608 $600,000$1930

The letter also stated that there were no fees to get the loan started and that HLC's Mortgage Experts could "pre-qualify [the recipient] right over the phone in minutes and provide [the recipient] with a customized loan program that suits [the recipient's] needs."

The reverse side of the letter provided that "[t]his offer may not be extended if, after responding to this offer you do not meet the criteria used in the selection process. Further, HomeLoanCenter.com will verify income and employment, review credit, and analyze debt and your equity position in the subject property prior to final loan approval." Also on the reverse side, the starting rate for the mortgage was listed as 1.00% fixed for thirty days "with a fixed payment option for the first 12 months. Terms of payment are based on a margin of 2.10% plus the 1-Month MTA Index 2.022% (as of February 16, 2005)." The paragraph continued by listing the annual percentage rate for a $200,000 loan for a thirty-year term, but also stated that the APR "may change if the index adjusts after the first 30 days." Referring to the box on the front side of the letter, the paragraph noted that "the APR's corresponding to the listed payments are as follows: $100,000 loan amount, 5.16% APR; $200,000 loan amount, 4.471% APR; $300,000 loan amount, 4.437% APR; $400,000 loan amount, 4.419% APR; $500,000 loan amount, 4.408% APR; $600,000 loan amount, 4.401% APR." This paragraph of the mailer concluded:

If minimum payment option is selected, deferred interest may accrue. Interest rate quoted assumes a credit score of 620 with a loan-to-value (LTV) of 80% on a primary residence. The APR and payment will vary based on specific terms of the loan selected and verification of information and credits. Rates are subject to change without notice.

The mailer again stated that not all applicants would be approved and that terms and conditions applied. Finally, the letter included HLC's mailing address, as well as its toll-free telephone and fax numbers and website.

While the Cavins did not respond to the mailer, they filed a complaint alleging that HLC violated the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. ยง 1681 et seq., by accessing their credit information without a permissible purpose. Specifically, the Cavins contend that the materials HLC sent them did not constitute a firm offer. The district court entered summary judgment in favor of HLC ...


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