Homeowners Have No Recourse for Inaccurate Reporting
Close
 

Homeowners Have No Recourse for Inaccurate Reporting

Mortgagors won a verdict on their Fair Credit Reporting Act (FCRA) case against the Federal National Mortgage Association (Fannie Mae) based on errors in Fannie Mae's licensed underwriting software that resulted in their inability to secure refinancing for their home and increased costs they incurred as a result of the delay. On appeal, the Ninth Circuit reversed and held as a matter of apparent first impression that by licensing its proprietary software to lenders, Fannie Mae did not regularly engage in the practice of assembling or evaluating consumer information, as required for it to be considered a “consumer reporting agency” under the FCRA. Even if Fannie Mae were assembling or evaluating consumer information as a result of its proprietary software, it did not do so for the purpose of furnishing consumer reports to third parties, as required for it to be a “consumer reporting agency” under the FCRA.

Zabriskie v Federal National Mortgage Association