Opinion ID: 182624
Heading Depth: 2
Heading Rank: 3

Heading: The Home Ownership and Equity Protection Act

Text: The Home Ownership and Equity Protection Act requires lenders to make certain disclosures to borrowers of “high cost” or “high rate” loans. See 15 U.S.C. § 1639; Cunningham v. Nationscredit Financial Services Corp., 497 F.3d 714, 717 (7th Cir. 2007). Mrs. Davis alleged that the defendants violated HOEPA by failing to disclose the real cost of her mortgage and the nature of the terms of her mortgage, including a description of the components and the material terms of her loan, the rate of interest, the period of the loan, the repayment schedule, any prepayment provision, her right to cancel the loan, and other terms. She also alleged that the defendants failed to give her a copy of a Truth In Lending Act statement prior to, during, or soon after the loan closing. Compl. ¶¶ 59-61. Mrs. Davis’s loan closed in 1999, well outside the statute of limitations for claims under HOEPA. Without resolving the threshold issue of whether or not Mrs. Davis’s loan would have qualified for HOEPA protection if her claim had been timely, the district court dismissed her claim. We affirm. Although she closed on her loan in 1999, Mrs. Davis argues that later events—specifically, Wells Fargo’s and Litton’s failure to notify her when they assumed their roles as holder and servicer of her mortgage, the 14 No. 10-1549 loan modification proposals Litton sent on behalf of Wells Fargo in January and September 2005, and Wells Fargo’s inability to “adequately inform Mrs. Davis or the court of the actual terms of the loan” in the foreclosure proceeding—triggered protection under HOEPA, effectively extending the statute of limitations. Davis Br. 15-16. She relies on Swanson v. Bank of America, N.A., 566 F. Supp. 2d 821 (N.D. Ill. 2008), aff’d, 559 F.3d 653 (7th Cir. 2009), a Truth In Lending Act case in which the plaintiff alleged that her credit card companies failed to provide written notices of interest rate increases. The district court in Swanson noted that the Truth In Lending Act requires credit card companies to notify consumers of changes to the initially-disclosed terms of credit under 12 C.F.R. § 226.9(c)(1), but dismissed Swanson’s claim upon finding that the defendants had notified her in their initial disclosures that rate increases would be automatically triggered if she exceeded her credit limit, which she had done. See Swanson, 566 F. Supp. 2d at 82527. Neither Swanson’s holding nor its commentary assists Mrs. Davis here. Mrs. Davis’s loan was a closed-end mortgage, not an open-ended home-equity loan or revolving credit account. She has not alleged that the defendants failed to notify her of a change in her loan terms after she signed the closing documents or that there was any change in her loan’s terms. The events that occurred within the statute of limitations do not amount to an actionable claim under HOEPA, and on this issue we also affirm the district court. No. 10-1549 15