In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 07-1136

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.

____________

ARGUED OCTOBER 24, 2007—DECIDED JULY 2, 2008

____________

Before FLAUM, MANION, and WILLIAMS, Circuit Judges.

MANION, Circuit Judge. 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 crossmotions for summary judgment, and the district court
2 No. 07-1136

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 Amount NEW 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 “prequalify [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
No. 07-1136 3

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. § 1681 et seq.,

by accessing their credit information without a permis-
4 No. 07-1136

sible 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 and denied the Cavins’ motion concluding that

HLC’s mailing constituted a firm offer under the FCRA.

II.

We review a district court’s grant of a summary judgment motion de novo. Hardrick v. City of Bolingbrook, 522

F.3d 758, 761 (7th Cir. 2008). When, as in this case, the

parties have filed cross-motions for summary judgment,

“we construe the evidence and all reasonable inferences

in favor of the party against whom the motion under

consideration is made.” Premcor USA v. Am. Home Assurance Co., 400 F.3d 523, 526 (7th Cir. 2005).

Generally, a company receives a consumer’s credit

report only after the consumer initiates contact with the

company. However, the FCRA provides an that “[f]irms

may obtain lists of names and addresses that credit bureaus

generate from their databases according to the stated

criteria.” Murray v. New Cingular Wireless Servs., Inc., 523

F.3d 719, 721 (7th Cir. 2008). Under the FCRA, in order

for a finance company to obtain an individual’s credit

report, the company needs to obtain it with the intent of

extending a firm offer of credit to the potential customer.

15 U.S.C. § 1681b(c)(1)(B)(I). A “firm offer of credit” is “any

offer of credit or insurance to a consumer that will be

honored if the consumer is determined, based on information in a consumer report on the consumer, to meet

the specific criteria used to select the consumer for the

offer except that the offer may be further conditioned . . . .”

15 U.S.C. § 1681a(l). Those conditions include a con-
No. 07-1136 5

sumer’s eligibility based on the information in his application, verification of continued eligibility, and the consumer

furnishing any required collateral for the extension of

credit which is disclosed to the consumer in the offer. Id.

The FCRA specifically sets out what is meant by verification:

Verification

(A) that the consumer continues to meet the specific

criteria used to select the consumer for the offer,

by using information in a consumer report on the

consumer, information in the consumer’s application for the credit or insurance, or other information

bearing on the credit worthiness or insurability of

the consumer; or

(B) of the information in the consumer’s application

for the credit or insurance, to determine that the

consumer meets the specific criteria bearing on

credit worthiness or insurability.

15 U.S.C. § 1681a(l)(2).

On appeal, the Cavins assert that HLC’s mailer did not

present a firm offer of credit because some of the material

terms of the loan program were neither disclosed nor

explained adequately. The mailer identified the basis for

calculating interest, the length of the loan, the possibility

of a rate change after thirty days, the minimum payment

option with accompanying deferred interest, and the

information needed to obtain the loan. As we recently

noted, “[n]either § 1681a(l) nor anything else in FCRA

says that the initial communication to a consumer must

contain all of the important terms that must be agreed

on before credit is extended. Trying to disclose everything in the first contact would make the document turgid
6 No. 07-1136

and, paradoxically, uninformative, because it would

be harder to read and grasp.” Murray, 523 F.3d at 723.

Similarly, the FCRA does not require that terms of the loan

be explained in the initial offer letter. In light of the information that is presented in HLC’s mailer, the recipient is

notified of the basic information regarding the loan.

Further, we note that the proper inquiry in ascertaining

whether a letter is a firm offer is whether the offer will

be honored, not whether all of the material terms are

listed. Id.

The Cavins contend that various phrases in HLC’s letter

also call into question whether the letter presented a firm

offer of credit, pointing to language such as “not all

applicants will be approved,” “terms and conditions

apply,” and “rates are subject to change without notice,” as

indicia of the a lack of a firm offer. The Cavins’ argument

ignores that the FCRA permits a lender to condition the

offer on the consumer’s eligibility for the loan based upon

factors, such as verification of income and provision of

collateral. See 15 U.S.C. § 1681a(1)(2). These caveats may

simply reflect the FCRA’s allowed conditions, and in the

absence of evidence to the contrary, this language does

not make HLC’s offer less firm. See Murray, 523 F.3d at 723-

24. Further, additional information, such as a consumer’s

full credit history and income, is necessary for the lender

to assess the particular rates and terms depending on the

credit-worthiness of the consumer. “The statute does not

require the revelation of these details as part of a ‘firm

offer’; but unless the algorithm in all its complexity is to

be laid out, any honest offer will leave some matters for

future determination.” Id. at 724 (citing Sullivan v. Greenwood Credit Union, 520 F.3d 70 (1st Cir. 2008)).

The Cavins point to another phrase that reads: “This

advertisement does not constitute an offer to enter into
No. 07-1136 7

an interest rate and/or discount point agreement.” The

Cavins assert that with this passage HLC “disclaimed the

making of any kind of offer.” HLC responds that this

disclaimer language is required by Minnesota state law

governing mortgage rate-lock agreements and that it did

not change the text of the mailers depending on the

recipient’s state. See Minn. Stat. § 47.206 (governing

mortgage rate-lock agreements, which are agreements in

which a lender promises to guarantee or lock in an interest rate or number of discount points, or both, for a specified period of time and requiring that a written statement of current loan terms and conditions be accompanied by a disclaimer that the statement is not an offer

to enter into a mortgage rate-lock agreement). The Cavins

emphasize the first part of the sentence, “This advertisement does not constitute an offer . . . .” However, as the

district court properly noted, reading the sentence in its

entirety and in context of the entire letter “the language

is merely an attempt by [HLC] to alert recipients of the

mailers that the offer being pitched is not an offer to enter

into a mortgage-rate lock agreement.” Cavin v. Home Loan

Center, Inc., 469 F.Supp.2d 561, 569 (N.D. Ill. 2007). Therefore, this passage does not point to the absence of a

firm offer of credit.

The Cavins also cite the minimal number of consumers

who actually obtained the SmartLoan presented in the

letter as evidence that HLC’s letter did not present a

firm offer. We find this argument unpersuasive. First,

“most consumers who receive credit solicitations do not

apply for the offered credit, regardless of how attractive

the terms of the offer are.” Perry v. First. Nat’l Bank, 459

F.3d 816, 826 (7th Cir. 2006). While the Cavins provide

raw numbers, they do not provide a breakdown of those
8 No. 07-1136

who may have applied, but did not qualify, or the number of consumers who qualified for the SmartLoan, but

instead simply elected to choose a different loan offer.

In the absence of such evidence and also in light of the

limited response to such solicitations, we conclude that

the number of consumers obtaining the SmartLoan does

not demonstrate that HLC’s offer did not comply with

the FCRA.

Finally, citing Cole v. U.S. Capital, Inc., 389 F.3d 719, 728

(7th Cir. 2004), the Cavins contend that HLC’s mailers

presented no value for consumers and thereby violated

the FCRA. In Cole, the consumer received a letter offering a product and a minuscule line of credit toward

the purchase of that product. We concluded that the

letter at issue there violated the FCRA because it was a

solicitation for merchandise rather than offering the

consumer a firm offer of credit that had value as credit. Id.

at 726-27. This case is distinct from Cole because HLC’s

letter did not offer any merchandise, such as a furniture

suite or appliances, but only presented a mortgage offer.

“When credit histories are used to offer credit (or insurance) and nothing but, the right question is whether the

offer is ‘firm’ rather than whether it is ‘valuable.’” Murray,

523 F.3d at 722. Therefore, the Cavins do not prevail on

their FCRA claim by contending that HLC’s letter lacked

value. HLC offered recipients of its letter a first lien

mortgage by presenting information that the SmartLoan

program was an adjustable-rate loan, based on the

MTA index, with a 1% interest start rate, and a term of

30 years. The mailer further provided information regarding interest rates, monthly payments, and the

method of calculation. Therefore, we conclude that

HLC’s mailer presented a firm offer of credit.
No. 07-1136 9

III.

We conclude that HLC’s letter presented a firm offer

of credit, despite the absence of some material terms and

the minimal number of consumers who obtained the

SmartLoan. Accordingly, HLC did not violate the FCRA,

and the district court properly granted summary judgment in favor of HLC. We AFFIRM.

USCA-02-C-0072—7-2-08