Federal Appeals Court Holds Good Faith Estimate Not a Contract

Mortgage Origination GFE

On May 31, the U.S. Court of Appeals for the Eleventh Circuit held that a Good Faith Estimate is not a contract but rather an estimate, and thus cannot support an action for breach of contract. Hackett v. Columbia Equities, Ltd., No. 1:10-cv-03530-AT, 2012 U.S.App. LEXIS 10949 (11th Cir. May 31, 2012). The court of appeals also dismissed a claim for “material alteration of a note” because the plaintiff failed to provide any statutory or common law rule that imposes civil liability on a party that materially alters a note. The pro se plaintiff asserted a variety of state and federal claims against three financial institutions related to a mortgage contract, all of which were dismissed by the district court for improper service, being time barred, or failing to state a claim upon which relief could be granted. The court of appeals affirmed the dismissal of all counts.