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Zucker v. One Source Mortgage Corp.

2005 WL 2447068 (N.J. Super. App. Div. 2005) (Unpublished)

MORTGAGES; CONSUMER FRAUD—When a mortgage pre-qualification letter from a mortgage broker states that it depends on approval by a third-party lender, it is reasonable to infer that the broker did not make any fraudulent statements to the contrary.

Mortgage applicants who had received a “pre-qualification” letter from a mortgage broker sued the loan broker under the Consumer Fraud Act when their application for a commitment was denied. The pre-qualification letter stated that it was based on the information provided by the applicants and was subject to final lender approval and an appraisal of the property. The applicants claimed that the pre-qualification letter misled them into believing that they had a firm mortgage commitment and that the broker’s failure to disclose, in the letter, the broker’s dependence on a third-party lender to supply the financing and the guidelines used to determine their creditworthiness constituted fraudulent conduct. After a jury verdict in the broker’s favor, the mortgage applicants moved for a judgment notwithstanding the verdict and a new trial. In order to award a judgment notwithstanding the verdict, a court must determine that, after accepting all of the evidence of the non-moving party (in this case the mortgage broker), and according all legitimate inferences, reasonable minds could differ as to the result. If reasonable minds could differ as to the result, the verdict must stand. The Appellate Division agreed with the lower court’s finding that, as a matter of law, the pre-qualification letter was not deceptive. It found that the jury had a reasonable basis for determining that the pre-qualification letter did not violate the Consumer Fraud Act because it clearly stated that it was not a mortgage commitment and disclosed that it depended on a third-party lender. The Court also noted that there was sufficient testimony by the broker from which a reasonable jury could have concluded that the broker did not make fraudulent statements.

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