According to Nationstar's Underwriting Workflow Procedures, which sets forth the steps followed to review loans for modifications, when a borrower submits a loan modification application, a code is entered into LSAMS and updates the loan's substatus in Remedy Star. In contrast, the Court finds that there is a genuine issue of material fact whether the administrative costs and fees incurred by the Robinsons resulted from Nationstar's RESPA violations. Ward, 595 F.3d at 180 (quoting Gunnells, 348 F.3d at 430). 1024.41(h)(1), (4). The predominance and superiority requirements under Rule 23(b)(3) are designed to ensure that the class action "achieve[s] economies of time, effort, and expense, and promote[s] . Docket for Robinson v. Nationstar Mortgage LLC, 8:14-cv-03667 Brought to you by the RECAP Initiative and Free Law Project, a non-profit dedicated to creating high quality open legal information. Ass'n, No. even after that settlement was reached. SETTLEMENT AGREEMENT This Settlement Agreement is entered into between plaintiff Demetrius Robinson ("Plaintiff"), on behalf of himself and the Class Members (as defined below), and defendant Nationstar Mortgage LLC ("Nationstar"). Law 13-316(e)(1), and "actual damages," 12 U.S.C. While she is trained as a bookkeeper, at the time of the Robinsons' 2014 application for a loan modification and in the subsequent months, Mrs. Robinson was not employed in any capacity. Thus, the nature of the proof of whether there has been a pattern or practice of RESPA violations provides substantial support for a finding of predominance. In its Motion to Strike, Nationstar argues that Oliver's methodology has not been peer reviewed, has a high error rate because he used the wrong data fields to identify the dates of events, failed to consider the timing of foreclosure sales relative to the dates of the submission of loan modification applications, and did not propose a specific methodology for calculating damages. See 12 C.F.R. Some courts have held that administrative costs that predate the alleged RESPA violation cannot constitute "actual damages." at 983 (quoting 12 U.S.C. Co., 595 F.3d 164, 179-80 (4th Cir. Notably, Oliver's analysis did not consider foreclosure information because the data produced did not include dates of foreclosure sales. If the initial application is complete, the substatus in Remedy Star is changed to refer the application to an underwriter for review, and an additional code is added in LSAMS. From January 2014 to the present, the Robinsons have not pursued other loss mitigation options, such as a short sale. Certification will not be granted as to the claims under 12 C.F.R. Some of the alleged damages are not supported in law or in fact. A class action allows representative parties to prosecute not only their own claims, but also the claims of other individuals which present similar issues. In 2007, Mr. Robinson obtained a loan with the principal amount of $755,000 to refinance the property. On February 16, 2017, the Court referred the case to United States Magistrate Judge Charles B. These letters are based on standard Nationstar templates, and the code reflects the type of letter sent. A borrower may enforce violations of these provisions through a private cause of action pursuant to 12 U.S.C. Case No. Ass'n, 375 F.2d 648, 653 (4th Cir. PDF United States District Court District of Maryland Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). The Robinsons allege that Nationstar has assessed $256 per month in late fees, interest, and other fees due to the delinquency, and that they have spent considerable time and effort pursuing the loss mitigation process, time which they otherwise would have devoted to their struggling small business. . To satisfy the numerosity requirement, the proposed class must be so numerous that "joinder of all members is impracticable." Particularly where a class may be certified even if individualized damages calculations would be necessary, the incomplete nature of the damages analysis does not provide a basis for striking Oliver's expert testimony. Although section 13-316 provides a remedy only for economic damages arising from a mortgage servicer's failure to respond to an inquiry, see Md. . Commonality requires that a class have "questions of law or fact common to the class" which are capable of classwide resolution, such that the determination of the truth or falsity of the common issue "will resolve an issue that is central to the validity of each one of the claims in one stroke." 2003). The comments to that rule state that the "common law rule in most jurisdictions is . Nationstar seeks summary judgment on the Robinsons' RESPA claims on the grounds that (1) Mrs. Robinson is not a proper plaintiff because she is not a "borrower" within the meaning of RESPA; (2) RESPA is inapplicable because Nationstar was required to comply with Regulation X only as to the Robinsons' first loss mitigation application; (3) there is no evidence to support a violation of 12 C.F.R. Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 344 (4th Cir. ("MCC") 2, ECF No. Finally, the Court finds that common issues of law and fact predominate. See Tyson Foods v. Bouaphakeo, 136 S. Ct. 1036, 1045 (2016) ("When 'one or more of the central issues in the action are common to the class and can be said to predominate, the action may be considered proper under Rule 23(b)(3) even though other important matters will have to be tried separately, such as damages or some affirmative defense peculiar to some individual class members.'" Life Ins. Date: September 9, 2019, Civil Action No. Accordingly, Nationstar's Motion for Summary Judgment will be granted as to the MCPA claims under sections 13-301 and 13-303. Nationstar has no process for standardizing file names. State attorneys general are here for homeowners, Raoul adds. 2d 1360, 1366 (S.D. 1024.41(b)(2)(B), (c)(1)(ii); Md. That is not so here. All Rights Reserved. 2016) ("[F]ortuitous non-injury to a subset of class members does not necessarily defeat certification of the entire class, particularly as the district court is well situated to winnow out those non-injured members at the damages phase of the litigation, or to refine the class definition. See 12 C.F.R. Nelson, 2017 WL 1167230, at *3 (collecting cases). The Robinsons' designated expert, Geoffrey Oliver, has offered a methodology for identifying class members and when their rights under RESPA and the MCPA have been violated. The relevant rule prohibits an attorney from "offer[ing] an inducement to a witness that is prohibited by law." At a minimum, the question of when a loss mitigation application is "complete" under RESPA within the workflow of Nationstarwhether at the time of the processor's designation of the file as complete or at a later stageis a significant unresolved question of law and fact that would be common to all RESPA claims against Nationstar. Class Cert. Where the results of such an analysis would apply to any individual claim, it would be highly inefficient and wasteful to require duplicative analysis in each such case. Where the Robinsons may be able to show that they have suffered actual damages, their claim for statutory damages, upon a showing that Nationstar has engaged in a pattern or practice of violating Regulation X, remains viable. 15-05811, 2016 WL 3055901 (N.D. Cal. While Mr. Robinson signed the promissory note ("the Note"), the deed of trust ("the Deed"), and the balloon payment rider for the 2007 loan, Tamara Robinson ("Mrs. Robinson") signed only the Deed and balloon payment rider and did not sign the Note. 1024.41(b)(1). 1024.41(a). 2003) ("[I]f Lierboe has no stacking claim, she cannot represent others who may have such a claim, and her bid to serve as a class representative must fail. LLC, No. 120. In Washington v. Am. It follows that only borrowers may bring a claim that a loan servicer has violated Regulation X. Finally, while Nationstar presented arguments for why the Robinsons have not shown damages as to most of the asserted categories, it did not advance any argument for why the interest damages claimed by the Robinsons were not attributable to Nationstar's Regulation X violations and thus is not entitled to summary judgment on that issue. When Nationstar received the application, it prevented late fees from being assessed and put a hold on any foreclosure proceedings. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. Where a contingency fee arrangement for expert witnesses is not expressly prohibited by the Maryland Rules of Professional Conduct, the Court declines to find that the fee arrangement here constituted an ethical violation. 1024.41(a). ("Opp'n') 13, ECF No. The commonality requirement is also met. 3d 254, 274-75 (S.D.N.Y. If the loan servicer denies a loan modification application where the complete application was received more than 90 days before a foreclosure sale, the servicer must allow the borrower to appeal and must respond to the appeal within 30 days of receiving it by stating in writing whether the appeal was granted and a loan modification will be offered. On July 17, 2014, Nationstar informed Mr. Robinson by letter that he did not qualify for a HAMP modification and that since the March 14 loan modification offer had not been accepted, it was withdrawn. MCC JR 318, 530-531. There is no reason to conclude that individual class members have any particular interest in individually controlling the litigation through separate actions, or that this Court is an undesirable forum to host this litigation, since Nationstar services loans in this district, is subject to jurisdiction here, and has presented no argument that Maryland is an inconvenient forum. In Frank, due to the state's community property laws, the mortgage was "a community debt," and after her husband died, the plaintiff "was therefore obligated to make the loan payments" because of her interest in the home. 315 0 obj <>/Filter/FlateDecode/ID[<55C1F5748AC7BD4BA7D3FF89F6EDC6DB>]/Index[303 23]/Info 302 0 R/Length 79/Prev 236518/Root 304 0 R/Size 326/Type/XRef/W[1 3 1]>>stream Although Monday's case specifically addresses Nationstar's actions following the Great Recession, the outcome can affect today's homeowners, says Kwame Raoul, attorney general of Illinois. 1024.41(c)(1)(i)-(ii), (g). The Robinsons complied. 2. In Robinson v. Nationstar Mortgage LLC, No. Plaintiffs "must present specific evidence to establish a causal link between the [servicer's] violation and their injuries." 1976) (holding that while it may be unethical for a lawyer to testify on behalf of a client as an expert, "it does not necessarily follow that any alleged professional misconduct" would require exclusion of the testimony because the rules of professional conduct do "not delineate rules of evidence"); United States v. Fogel, 901 F.2d 23, 26 (4th Cir. Similarly, though the precise nature of the fees imposed was not specified, it is reasonable to infer that some were attributable to delays linked to RESPA violations. The Fourth Circuit has stated that 74 members is "well within the range appropriate for class certification," Brady v. Thurston Motor Lines, 726 F.2d 136, 145 (4th Cir. But where the broad methodology is sound, the lack of consideration of unproduced data cannot provide a basis to strike the expert witness's testimony. Am. Joint Record ("MSJ JR") 0102. R. Evid. Marchese v. JPMorgan Chase Bank, N.A., 917 F. Supp. Nov. 12, 2011), the court held that a plaintiff who signed a deed of trust on a property and was a joint tenant with her son, but did not sign the promissory note, had constitutional standing to bring a RESPA claim because she stood to be injured if a default on her son's loan led to the loss of her equitable interest in the property. Sep. 9, 2019). 2013). In Baez v. Specialized Loan Servicing, LLC, 709 F. App'x 979 (11th Cir. McLean II, 398 F. App'x at 471. Likewise, the articulated concern that Nationstar would not be required to respond to loss mitigation applications filed within a certain number of days of a foreclosure sale, can be addressed through the provision of data relating to the dates of scheduled foreclosure sales. A complete loss mitigation application is "an application in connection with which a servicer has received all the information that the servicer requires from a borrower in evaluating applications for the loss mitigation options available to the borrower." cause[d] damages retroactively" and "transmogrifie[d]" the costs that predate the RESPA violation into damages. 1024.41(f), (g). Law 13-301(1). . Signed by Judge Theodore D. Chuang on 8/18/2015. Local R. 105.6. . 2013) (holding that the plaintiff sufficiently pleaded actual injury or loss under the MCPA where he alleged that he suffered "bogus late fees," damage to his credit, and attorney's fees); see also Cole v. Fed'l Nat'l Mortg. : 1-855-914-4649 (Toll-Free) / 1-855-535-1813 (TTY) Nationstar, d/b/a Mr. Cooper, Consent Order. 2605(f). The denial letters stated that the loan's principal balance exceeded the limit under HAMP. The Magistrate Judge ordered Nationstar to run those scripts and return the electronic data to the Robinsons. Fed. 2004). 1024.1 to 1024.41 and known as "Regulation X," see 12 C.F.R. 2015) Court Description: MEMORANDUM OPINION. R. Civ. According to Oliver, if he used incorrect data, that was a result of the limited data fields and definitions provided to him. at 358. 15-3960, 2017 WL 623465, at *8 (D. Md. 2014). Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403 (1977))). Although this data was not provided to Oliver, there is no reason it could not be produced and used to make determinations on the timeliness of decisions on loss mitigation applications. Id. Nationstar argues that summary judgment should be entered on the Robinsons' MCPA claim under section 13-316 because the Robinsons have not shown that they submitted a complaint or inquiry that triggers a duty to respond. A fact is "material" if it "might affect the outcome of the suit under the governing law." PDF PUBLISHED - United States Court of Appeals for the Fourth Circuit Wirtz v. Specialized Loan Servicing, LLC, 886 F.3d 713, 719-20 (8th Cir. 2018). RESPA's implementing regulations, codified at 12 C.F.R. 09-08213, 2011 WL 11651320 (C.D. 2017) (holding that "incidental costs related to the sending of correspondence" to the servicer, including "postage and travel," are not actual damages under RESPA because such a rule "would transform virtually all unsatisfactory borrower inquiries into RESPA lawsuits"). Signed by Magistrate Judge Jillyn K Schulze on 9/9/2016 . 1024.41(c)(1)(i). McAdams v. Nationstar Mortgage, LLC, No. 21-1087 (4th Cir. 2022) Once the documents are received, the Remedy Star substatus and LSAMS code are changed again to mark the application complete. Under a provision of Regulation X entitled "Loss mitigation procedures," mortgage servicers must take certain steps when a borrower applies for loss mitigation measures, such as the loan modifications sought in this case. 2010) (considering consistency of results that provide finality to the defendant as favoring a finding of superiority). Moreover, the possibility that some members of the class as defined by the Robinsons have not suffered any injury cognizable under RESPA or MCPA does not preclude certifying the class. See Stillmock v. Weis Markets, Inc., 385 F. App'x 267, 275 (4th Cir. 1984), and has upheld the certification of a class with as few as 18 members, Cypress v. Newport News Gen. & Nonsectarian Hosp. Co., 595 F.3d 164, 179 (4th Cir. Settlement Pool $12,100,000 Settlement Website Nationstar Class Action Settlement Deadline 04/11/2016 Contact Wright et al. To establish an MCPA violation under this provision, a plaintiff must establish that (1) the defendant engaged in an unfair or deceptive practice or misrepresentation; (2) the plaintiff relied upon the representation; and (3) doing so caused the plaintiff actual injury. THEODORE D. CHUANG United States District Judge. Code Ann., Com. More importantly, while a determination of an individual violation would not require extensive analysis, specific proof of a pattern or practice of RESPA violations in any individual case would be a substantial undertaking, likely requiring the same type of complex analysis proposed here: a sampling of Nationstar files, compilation of all relevant data for such files, expert analysis to identify violations, and an assessment whether the identified violations are sufficient to establish a pattern or practice of violations. Reg. As of November 22, about 2.8 million homeowners were in a forbearance plan, according to the latest research from the Mortgage Bankers Association. Nationstar. Opp'n Mot. "If a borrower's complete loss mitigation application is denied for any trial or permanent loan modification option available to the borrower," the servicer must state in the required notice to the borrower "the specific reason or reasons for the servicer's determination for each such trial or permanent loan modification and, if applicable, that the borrower was not evaluated on other criteria." Rule 702 permits an expert to testify if the testimony "will help the trier of fact to understand the evidence or to determine a fact in issue," "is based on sufficient facts or data," and "is the product of reliable principles and methods," and if the expert has "reliably applied the principles and methods to the facts of the case." As the Supreme Court noted in Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999), Daubert "made clear that its list of factors was meant to be helpful, not definitive," and it is not always the case that an expert witness's claim will have been subjected to peer review. Gariety v. Grant Thornton, LLP, 368 F.3d 356, 366 (4th Cir. Factors "pertinent" to the predominance and superiority requirements include the "class members' interests in individually controlling" the litigation, whether litigation on the matter has already been begun by other class members, whether concentrating the litigation in one forum is desirable or undesirable, and the potential difficulties managing the class action presents. The settlement in the form of a consent judgment, filed in the U.S. District Court for the District of Columbia, resolves allegations that Nationstar, which does business as "Mr. Cooper," violated consumer protection laws. The Court will address the varying claims in turn. Id. If the named plaintiff satisfies all of the Rule 23(a) requirements and the Rule 23(b)(3) requirements, then class certification is appropriate. 10696, 10836. 2605(f)(1). 2019) (noting that the purpose of certifying a class "is not to identify every class member at the time of certification, but to define a class in such a way as to ensure that there will be some administratively feasible [way] for the court to determine whether a particular individual is a member at some point" (internal citation omitted) (quoting EQT Production Co. v. Adair, 764 F.3d 347, 358 (4th Cir. Between July 2010 and November 2013, the Robinsons submitted and Nationstar denied three applications for a loan modification under the Home Affordable Modification Program ("HAMP"). Law 13-301 and 303. at 152. Moreover, Nationstar cites no authority for the proposition that a loss mitigation application would not be deemed "complete" for purposes of RESPA upon such a formal designation, and any rule that would deem such an application incomplete in the event that an underwriter subsequently decided to ask for additional material would be entirely unworkable. Moreover, although the court stated that an arrangement for providing expert testimony for a contingent fee would violate public policy, the court did not address the question of the admissibility of evidence at issue here. Because Oliver's methodology is reliable within the meaning of Federal Rule of Civil Procedure 702 and Daubert, Nationstar's Motion to Strike will be denied. In February 2014, after their income had further decreased, the Robinsons ceased making payments on the mortgage loan. ORDER Scheduling Settlement Conference for Wednesday, October 26, 2016 at 10:30 a.m. Moreover, because borrowers often submit multiple loan modification applications, and because Nationstar's data is stored at the loan level, not at the application level, Nationstar claims that it is not possible to tell from the data alone, without reviewing the files, whether a status or code change is in response to a specific loan modification application. Like the class members, to prove his case, Mr. Robinson will have to show that Nationstar failed to timely and appropriately respond to his loan modification applications by pointing to the dates of his submissions and the dates and contents of Nationstar's responses. Id 1024.41(c)(1). Notably, although a borrower may recover up to $2,000 in statutory damages upon a showing of a "pattern or practice of non-compliance with the requirements" of Regulation X, 12 U.S.C. Nationstar Mortgage settles $2.75 million for Pennsylvania mortgage Proof of these claims requires a showing of the dates that an application was received, an acknowledgment letter was sent, an application became complete, Nationstar sent a decision letter to the borrower, and a foreclosure sale is scheduled. Robinson v. Nationstar Mortg. LLC - Casetext 1024.41(i). A conflict of interest will not defeat the adequacy requirement when "all class members share common objectives[,] the same factual and legal positions, and . Furthermore, to the extent that the Robinsons' claim is that Nationstar falsely stated that it would evaluate the Robinsons for all available loss mitigation plans, the Robinsons point only to statements in letters that the Robinsons "may" be eligible for certain non-HAMP loan modification programs. Additional facts relevant to the pending motions are set forth below. See Wirtz, 886 F.3d at 719-20. Where such statements in no way promise approval, the Robinsons appear to claim that such statements are false or misleading because Nationstar never intended to, and did not, evaluate the Robinsons for the various loss mitigation options. Md. The Consumer Financial Protection Bureau (CFPB) today ordered Nationstar Mortgage LLC to pay a $1.75 million civil penalty for violating the Home Mortgage Disclosure Act (HMDA) by consistently failing to report accurate data about mortgage transactions for 2012 through 2014. . See Stillmock, 385 F. App'x at 274 ("[T]here is no reasoned basis to conclude that the fact that an individual plaintiff can recover attorney's fees in addition to statutory damages of up to $1,000 will result in enforcement of [the Fair Credit Reporting Act] by individual actions of a scale comparable to the potential enforcement by way of class action."). Nationstar sent Mr. Robinson two letters denying his loan modification application on July 17, 2014 and September 9, 2014, but there is no evidence in the record that the Robinsons submitted an appeal to either of those letters. Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. Several states also fined Nationstar in 2018 over failing to have proper procedures in place and "unfair and deceptive" mortgage modification policies. See Broussard, 155 F.3d at 344. Order at 2, ECF No. Nationstar insists that its customers agreed to receive phone calls from the mortgage loan provider, however it agreed to pay $12.1 million to avoid ongoing litigation. Ballard v. Blue Shield of S.W. . The Robinsons do not address this argument in their Opposition. CFPB V. Nationstar - Home It will be otherwise denied. In their Motion for Class Certification, the Robinsons seek certification of two classes. Nationstar further argues that summary judgment must be entered in its favor on the Robinsons' claims under 12 C.F.R. The Motions are fully briefed, and no hearing is necessary to resolve the issues. If the named plaintiff satisfies each of these requirements under Rule 23(a), the Court must still find that the proposed class action fits into one of the categories of class action under Rule 23(b) in order to certify the class. In addition, Nationstar asserts that not all loan modification applications referred to an underwriter are complete. Nationstar's failings resulted in "substantial consumer harm," CFPB Director Kathleen Kraninger said in a statement. Amchem Prods. Robinson v. Nationstar Mortgage, LLC. These events will be represented by discrete data points in Nationstar's databases, such that these violations may be proved through that data. However, the burden is on the plaintiffs to show that other class members exist and that their joinder is impracticable; a court may not rely on mere speculation that numerosity has been satisfied. Since Mrs. Robinson may not bring a claim under Regulation X, she may not be a named class representative. Furthermore, Nationstar's argument that the Robinsons are not typical largely recycles the same arguments made in the Motion for Summary Judgment. 28, 2017). The Robinsons appealed the Magistrate Judge's ruling because it did not require Nationstar to run a structural script for a third database. Tagatz, 861 F.2d at 1042; cf. Although she has worked as a bookkeeper for various companies, she was not employed between March and September 2014. Law 13-316(e), for the reasons stated above, see supra part I.B.4, the Robinsons have provided sufficient evidence to create a genuine issue of material fact whether they have suffered economic damages, in the form of administrative costs, fees, and interest. When considering whether expert testimony is reliable or should be excluded, the court considers the following factors: "When an expert's report or testimony is 'critical to class certification,'" the district court "must make a conclusive ruling on any challenge to that expert's qualifications or submissions before it may rule on a motion for class certification." The fact that each borrower must individually show damages under 12 U.S.C. While the Nationstar employee who conducts the initial processing of an application may refer it to an underwriter based on its facial completeness, the underwriter makes the final determination of whether the application is complete and is responsible for obtaining any additional required documentation. Accordingly, a loan servicer must comply with Regulation X as to the first loss mitigation application submitted after the effective date. Please check back in late January for updates. 1988) (distinguishing between a rule of professional conduct and admissibility of evidence); cf. "We will be watching the mortgage interest industry to ensure they are treating homeowners fairly and fulfilling their obligations.". 1024.41(f), (g), and (h), and Md. In a victory for borrowers, the Fourth Circuit issued an opinion on Robinson v. Nationstar Mortgage LLC, affirming approval of the settlement. 1972). In 2020, the Robinsons and Nationstar filed a notice of settlement and a joint motion to proceed before a magistrate "A loss mitigation application is a request from a borrower to change the terms of their payment obligations to avoid delinquency or foreclosure." J.A. In December 2020, Nationstar (d/b/a Mr. Cooper) reached a settlement with the CFPB, the State Attorneys General, and certain state mortgage regulators to resolve old regulatory matters. 2015). Code Ann., Com. 15-0925, 2015 WL 5165415, at *4 (D. Md. Indeed, since previous versions of the Maryland rule expressly stated that contingency fee arrangements for experts were forbidden, but that explicit language was removed, it is reasonable to conclude that the amendment changed the rule in Maryland to no longer bar contingency fee arrangements. Since there is no genuine issue of material fact as to whether Nationstar violated subsection (h), summary judgment will be entered for Nationstar on that claim. Neither the rule nor the comment, however, state whether Maryland is one such jurisdiction. An "unfair or deceptive" trade practice includes a "false . Co., 350 F.3d 1018, 1023 (9th Cir. 2605(f). The Robinsons' Motion for Class Certification will be GRANTED IN PART and DENIED IN PART. Based on his experience and review of deposition transcripts of Nationstar employees, Oliver asserts that Nationstar has computerized data from which RESPA violations may be identified, not least because Nationstar must be able to demonstrate its compliance with RESPA to regulators. In 2017, the CFPB fined Nationstar $1.75 million for failing to report accurate data about its mortgage transactions.
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