Christina Felts v. Wells Fargo Bank, N.A.
893 F.3d 1305
| 11th Cir. | 2018Background
- In 2009 Felts refinanced her mortgage; Wells Fargo was the servicer. The note required $2,197.38 monthly payments.
- After job loss, Felts entered a Fannie Mae unemployment forbearance plan administered by Wells Fargo: payments were $25/month Sept 2012–Jan 2013; plan letter stated regular payments would accrue and the plan did not modify the Note.
- Wells Fargo reported Felts’ account to CRAs as escalatingly delinquent (30–180+ days) Aug 2012–Jan 2013 and listed a large past-due amount.
- Felts disputed the reporting with CRAs; Wells Fargo responded that the account was “paid in full” but maintained the delinquency history (explaining she did not make contractual payments).
- Felts alleged Wells Fargo violated 15 U.S.C. § 1681s‑2(b) by failing to conduct a reasonable investigation after CRA disputes, and claimed resulting damages (denied mortgage, storage/rent, stress). District court granted summary judgment for Wells Fargo; Eleventh Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether reported information was inaccurate under the FCRA | Felts: forbearance plan meant she was not required to make $2,197.38 payments during plan; reporting the original scheduled payment and delinquency was inaccurate | Wells Fargo: reporting concerned compliance with the original Note (not the forbearance plan), which was not legally modified; Felts failed to pay contractual amounts | Held: Reporting was not inaccurate as a matter of law because the Note remained unmodified and Felts missed contractual payments |
| Whether reporting was materially misleading despite technical accuracy | Felts: even if technically true, reporting was misleading because she made the payments the servicer required under the plan | Wells Fargo: truthful reporting of nonpayment under the Note plus indication of a partial payment agreement was not misleading to prospective lenders | Held: Not materially misleading; servicer’s report accurately reflected noncompliance with the Note and conveyed relevant risk to lenders |
| Whether Wells Fargo failed to conduct a reasonable investigation under §1681s‑2(b) | Felts: servicer should have investigated differently given its own communications and CDIA guidance | Wells Fargo: no reasonable investigation could have produced facts showing inaccuracy because the Note was unchanged | Held: Plaintiff failed threshold requirement (no evidence an investigation would have uncovered inaccuracy), so §1681s‑2(b) claim fails |
| Relevance of CDIA guidelines and out‑of‑circuit cases on loan workouts | Felts: CDIA and some cases require different reporting (e.g., scheduled payment field, special codes); analogous decisions allow claims to proceed | Wells Fargo: CDIA guidance does not make original‑Note reporting inaccurate; cited loan‑modification cases are inapposite because modifications legally change loan terms, unlike forbearance here | Held: CDIA/guidelines and cited cases do not create an inaccuracy or material issue here; forbearance did not legally modify the Note |
Key Cases Cited
- Hinkle v. Midland Credit Mgmt., 827 F.3d 1295 (11th Cir.) (standard for furnisher investigations and what constitutes verification)
- Worley v. Florida Secretary of State, 717 F.3d 1238 (11th Cir. 2013) (standard of review for summary judgment)
- Bradshaw v. BAC Home Loans Servicing, L.P., 816 F. Supp. 2d 1066 (D. Ore. 2011) (distinguishes loan modification agreements that can render delinquency reporting inaccurate)
- Davenport v. Sallie Mae, Inc., 124 F. Supp. 3d 574 (D. Md. 2015) (genuine fact issues over reasonableness of furnisher’s reinvestigation in forbearance context)