1967). 1024.41(b)(1). The plaintiff's claim "cannot be so different from the claims of absent class members that their claims will not be advanced by" proof of the plaintiff's own individual claim. Law 13-101 to 13-411 (West 2015). This abandoned high school was converted into a 31-unit apartment building, number of unlawful practices in handling mortgages following the Great Recession. Order at 2, ECF No. Nationstar Mortgage agreed to settle an action commenced by the Consumer Financial Protection Bureau for $91 million to resolve allegations surrounding mortgage servicing misconduct and deceptive practices that resulted in financial harm to borrowers. Because Oliver analyzed proprietary databases and data specifically disclosed for this litigation pursuant to a protective order, such that Oliver's peers lack access to the same information, Oliver's expert testimony is not of the type that ordinarily would be subject to peer review, and it would be unfair to require "general acceptance within a relevant scientific community." Fed. Thus, Mrs. Robinson is not "obligated" to pay the amount due on the Note and therefore is not a "borrower" for purposes of RESPA. Md. 1990) (citing Universal Athletic favorably for this proposition). 218. Nationstar's claim that the above-described coding is not dispositive, because an underwriter could subsequently determine that more information was needed after all, is not persuasive. The fact that Oliver's methodology has not been subjected to peer review and that he has not published any articles about it does not invalidate it. First, as a threshold matter, the Court notes that in ruling on Nationstar's Motion for Summary Judgment, it will grant judgment in favor of Nationstar as to Mrs. Robinson's claims, Mr. Robinson's RESPA claims under 12 C.F.R. 3d 712, 728 (S.D. Nationstar said in a statement that its settlements were based on "loan-servicing practices" that the company used between 2010 and 2015 and has since discontinued. Co, 445 F.3d 311, 318 (4th Cir. The comments to that rule state that the "common law rule in most jurisdictions is . Code Ann., Com. P. 23(a)(2); Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). Date: September 9, 2019, Civil Action No. The court, however, did not explain how in the absence of any obligation to pay back to the Note, the plaintiff qualified as a "borrower" under the RESPA statute. Several states also fined Nationstar in 2018 over failing to have proper procedures in place and "unfair and deceptive" mortgage modification policies. Gariety v. Grant Thornton, LLP, 368 F.3d 356, 366 (4th Cir. See Baby Neal for and by Kanter v. Casey, 43 F.3d 48, 56-57 (3d Cir. In response, on May 30, 2014, Mr. Robinson sent Nationstar the exact same application that he had submitted on March 7, 2014. LLC, No. R. Civ. A Division of NBC Universal. In Accrued Financial, the United States Court of Appeals for the Fourth Circuit held that where commercial real estate tenants assigned their potential claims against their landlords to a commercial real estate auditor under an arrangement through which the auditor would receive a percentage of any recovery in litigation, the assignments violated public policy because where the auditor's employees could testify in such litigation, the assignments "provide for supplying expert testimony for a contingent fee." 1024.41(i). While Mr. Robinson sought to reduce his monthly mortgage payment in applying for a loan modification, his deposition testimony reflects that he understands that the present lawsuit contends that Nationstar did not process the Robinsons' loan modification application correctly. Furthermore, determining whether statutory damages are available will require no individualized consideration, because the pattern-or-practice claim "would be based solely on" Nationstar's conduct and can be established through sampling. 1024.41(b)(2)(B), which requires that an acknowledgment letter be sent within five days of receipt of a loan modification application; or 12 C.F.R. 1024.41(a). Fed. See Farber, 2017 WL 4347826 at 15; Billings, 170 F. Supp. You will not receive a payment if you fail to timely submit a completed Claim Form, and you will give up your right to bring your own lawsuit against the Defendant about the claims in this case. 1024.41(c)(1)(i). Moreover, whether Nationstar engaged in a "pattern or practice" of Regulation X violations, within the meaning of 12 U.S.C. 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. Notably, Oliver's analysis did not consider foreclosure information because the data produced did not include dates of foreclosure sales. Mot. While every class member will have to establish damages, that calculation will not be "particularly complex," as it will require identifying administrative costs and fees that would not have occurred but for the RESPA violation. In February 2014, after their income had further decreased, the Robinsons ceased making payments on the mortgage loan. The servicer "is liable for any economic damages caused by the violation." Specifically, the loan servicer failed to honor borrowers' loan modification agreements. 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. In the Amended Complaint, the Robinsons claim that Nationstar's representations that it offered many loss mitigation plans and "would evaluate" borrowers "for eligibility for all these loss mitigation plans" were false. As a result, the Robinsons' claim that Nationstar violated certain Regulation X procedures with respect to their loan modification application and those of the class members. However, Nationstar did not comply with all requirements of Regulation X, which became effective on January 10, 2014. See Robinson v. Nationstar Mortg. News Ask a Lawyer Finally, the Court notes that a decision to certify a class is based on whether or not a putative class satisfies the Rule 23 factors, not on a preliminary assessment of the underlying merits of the claim. Discovery Order, ECF No. Life Ins. 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. Delaware Attorney General Kathleen Jennings said the settlements, Several states also fined Nationstar in 2018, Kwame Raoul, attorney general of Illinois, latest research from the Mortgage Bankers Association. These letters are based on standard Nationstar templates, and the code reflects the type of letter sent. When Nationstar received the application, it prevented late fees from being assessed and put a hold on any foreclosure proceedings. Furthermore, Oliver states that since Nationstar employees used templates to communicate with borrowers, he could determine whether there were violations of certain RESPA provisions based on entries showing that Nationstar employees used templates that did not comply with RESPA. Where the Robinsons, after discovery, cannot point to evidence that Nationstar did not even consider or evaluate the Robinsons for loss mitigation options, they have not established the existence of a genuine issue of material fact on the issue of false or misleading statements. 2005))). 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. 2015) Court Description: MEMORANDUM OPINION. 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. Subsequent Loss Mitigation Application. 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. An "unfair or deceptive" trade practice includes a "false . Once the documents are received, the Remedy Star substatus and LSAMS code are changed again to mark the application complete. The denial letters stated that the loan's principal balance exceeded the limit under HAMP. Where the deed of trust explicitly states that Mrs. Robinson is not obligated on the loan, the Court finds that she is not a borrower under RESPA and cannot bring the claim against Nationstar under Regulation X. 16-0117, 2017 WL 4347826, at *15 (D. Md. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. In 2017, the CFPB fined Nationstar $1.75 million for failing to report accurate data about its mortgage transactions. A letter noting receipt of the application is automatically generated and sent to the borrower, and a Nationstar employee checks the application's documentation to determine if it is complete based on a checklist. If a borrower is experiencing issues or not getting the help needed, contact your state attorneys general. Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. Since the MCPA and Regulation X allow recovery only of "economic damages," Md. "We will be watching the mortgage interest industry to ensure they are treating homeowners fairly and fulfilling their obligations.". Code Ann., Com. Corp. ("McLean II"), 398 F. App'x 467, 471 (11th Cir. 2018). 2605(f)(1). 2601(a). 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. Id. that it is improper to pay an expert witness a contingent fee." While the particulars of Mr. Robinson's application process will not necessarily prove that Nationstar mishandled the applications of other individual class members, these facts fairly encompass the types of claims that would be brought by the members of the class. At least one court has found a similar expert report by Oliver to meet the Daubert standard. See Johnson v. Ocwen Loan Servicing, 374 F. App'x 868, 873 (11th Cir. The Robinsons' Motion for Class Certification will be GRANTED IN PART and DENIED IN PART. Some of the alleged damages are not supported in law or in fact. Rather than striking the testimony, the Court may need to consider permitting supplemental discovery to correct for the lack of relevant data not previously made available to Oliver. 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. The record is undisputed that as of September 25, 2017, Nationstar had neither started foreclosure proceedings nor moved for foreclosure judgment on the Robinsons' home. R. Civ. Ass'n, No. at 300. Co., 350 F.3d 1018, 1023 (9th Cir. 2605(f)(2); Wirtz, 886 F.3d at 719-20, that the individualized damages inquiry would need to precede the award of statutory damages based on a finding of a pattern-or-practice of RESPA violations is a distinction without a difference: whether individual damages are shown before or after the pattern-or-practice liability, the common issues of liability predominate over the individualized questions of damages. Mr. Robinson's counsel is experienced in complex civil litigation and class action litigation. A servicer that fails to comply with Regulation X is liable for actual damages and, upon a finding of a "pattern or practice" of non-compliance by the servicer, up to $2,000 in statutory damages. . 1024.1 to 1024.41 and known as "Regulation X," see 12 C.F.R. More Information Amchem Prods. See 12 C.F.R. Nationstar also does not argue that the class is not numerous, as there approximately 33,855 members who submitted loss mitigation applications from January 10, 2014 to March 30, 2014. Indeed, Mr. Robinson testified that Mrs. Robinson did not sign the Note because she did not purchase the property with him. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). But see Ayres v. Ocwen Loan Servicing, LLC, 129 F. Supp. Ward, 595 F.3d at 180 (quoting Gunnells, 348 F.3d at 430). If you were contacted on your cell phone by a company via an . To calculate damages, Oliver stated that he would look to data from the LSAMS application, including data tables that contain fee information, to identify fees that would not have been charged but for Nationstar's various RESPA violations, but that he was not able to evaluate this data in his report because it had not been provided to him. Ass'n, 375 F.2d 648, 653 (4th Cir. A class action allows representative parties to prosecute not only their own claims, but also the claims of other individuals which present similar issues. v. DEMETRIUS ROBINSON; TAMARA ROBINSON, Plaintiffs - Appellees, v. . Once an underwriter is assigned, that employee double-checks whether the application contains all required documentation and is complete. Nationstar, the fourth-largest mortgage servicer in the U.S., is set to pay $91 million to settle claims brought by the Consumer Financial Protection Bureau and state attorneys general alleging that the company failed to honor mortgage forbearance agreements and unfairly foreclosed on homeowners. See Tyson Foods, 136 S. Ct. at 1046-47 (holding that representative sampling was a permissible method to prove whether time spent donning and doffing gear resulted in violations of the Fair Labor Standards Act). See id. See 12 C.F.R. Contact the Class Action Administrator at 1-855-917-3477 (Toll-Free). To the extent that, as Nationstar claims, such a determination could not be fully accomplished through computerized analysis alone, the resources needed to resolve this question would be even greater, such that the importance of having it resolved in a common fashion for all claims would be heightened. The Class is represented by Rafey S. Balabanian of Edelson PC. Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403 (1977))). 2605(f), caused by the violation, which likely consist of administrative fees and costs, the individual recovery available for each class member would likely be low, far below the cost of litigating the claims themselves. Likewise, although Mrs. Robinson expended time corresponding with Nationstar, she was not working for pay at the same time, and the Robinsons have not provided evidence to quantify the loss to Mr. Robinson, the only viable plaintiff here. 17-0982, 2018 WL 4111938, at *5-6 (M.D. 2013). Am. For the following reasons, the Motion for Summary Judgment will be GRANTED IN PART and DENIED IN PART; the Motion to Strike will be DENIED; and the Motion for Class Certification will be GRANTED IN PART and DENIED IN PART. Questions? "Since then, we have continued to invest in technology, people, and leadership to ensure that our compliance and risk management programs not only meet our regulators' expectations but also support sustainable growth and maintain our position as an industry leader.". 2011) ("[T]he possibility that a well-defined class will nonetheless encompass some class members who have suffered no injury . See Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349, 356-57 (3d Cir. In their Motion for Class Certification, the Robinsons seek certification of two classes. See Md. Id. Those claims arose from Nationstar's alleged Id. P. 23(b)(3). Because of the manner in which class discovery was conducted, see supra part II.A, Oliver did not have access to all of Nationstar's data fields for the representative sample of loans. 14-cv-10457, in the U.S. District Court for the Northern District of Illinois, Eastern Division.. Join a Free TCPA Class Action Lawsuit Investigation. Although each class member must individually show that they suffered "actual damages" under 12 U.S.C. Claim Your Cash Every Week! Rules 19-303.4(b) (2018). uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results." In this photo illustration, the Nationstar Mortgage Holdings Inc. logo seen displayed on a smartphone. Wright et al. A separate Order shall issue. Distribution of funds to Class Members, however, could not occur because a member of the Class filed an objection to the Settlement and a subsequent appeal to the U.S. Court of Appeals for the Fourth Circuit. Where the PaCE consulting fee was a one-time fee to advise the Robinsons in their interactions with Nationstar paid in August 2013, several months before they first submitted the March 2014 loan modification application, this cost was incurred "whether or not [Nationstar] complied with its obligations." Fla. 2009), aff'd, 398 F. App'x 467, 471 (11th Cir. The data derived from scripts written by another expert, Abraham J. Wyner, without the benefit of seeing the databases, a process necessitated by Nationstar's unwillingness or inability to produce the relevant data. All but $28.6 million of its. At the time, Nationstar had not completed the process of updating its systems to conform to those requirements. "[A]n evaluation of the merits to determine the strength of plaintiffs' case is not part of a Rule 23 analysis." R. Civ. Law 13-316(c), which requires a response to a loan modification application within 15 days. . 14-3667, 2015 WL 4994491, at *1-2 (D. Md. Fed. See Broussard, 155 F.3d at 344. Nationstar broke that trust by engaging in unfair and deceptive practices," Kraninger added. at *5. See 12 C.F.R. 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. 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. Law 13-316(c), which requires a response to a mortgage servicing complaint or inquiry within 15 days. Likewise, he concluded that for approximately 53 percent of sampled loans, Nationstar failed to comply with the requirement of acknowledging receipt of the application within five days. From January 2012 to December 2016, the CFPB and 50 state attorneys general claim Nationstar, which is now doing business asMr. Cooper, engaged in a number of unlawful practices in handling mortgages following the Great Recession. "There are going to be a lot of homeowners who need a home loan modification or other assistance," Raoul says. A $3.8 million settlement has been reached in a Nationstar convenience fee class action lawsuit, which claimed that the mortgage lender wrongfully charged convenience fees to their consumers when making payments on past due accounts. In 2007, Mr. Robinson obtained a loan with the principal amount of $755,000 to refinance the property. 2605(f)(2). UNITED STATES DISTRICT COURT DISTRICT OF MARYLAND. 1024.41(c) and (d) impose obligations on a loan servicer once it receives a "complete loss mitigation application" and once the completed application is denied. See MCC JR0529-31. Id. . Many impacted consumers have already received refunds and more will be contacted by the settlement administrator in the coming weeks. Fed. 2605(f). But see Sutton v. CitiMortgage, Inc., 228 F. Supp. See McGraw, 646 F.2d at 176. The Court will address the varying claims in turn. 10696, 10836. J. Accordingly, Nationstar did not send the Robinsons an acknowledgment letter within five days stating that it had received the application, as required by Regulation X. While the date that Nationstar's systems came into compliance, is unknown, Nationstar's systematic noncompliance presents common questions of law and fact for all class members. The company has already paid about $57.5 million in restitution to affected consumers, according to the CFPB. 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. 2605(f), is common question of law and fact that Mr. Robinson and the class members would all be required prove in their individual cases in order to qualify for statutory damages. 1024.41(h)(1). On February 10, 2022, the Court of Appeals issued a decision affirming the Final Approval Order. Nationstar will need to enhance its policies and processes around how it handles consumer complaints, performs escrow analyses and conducts audits, for example. Filed by Janie Robinson. A settlement has been reached in a class action lawsuit alleging Nationstar Mortgage LLC (Nationstar or Defendant) violated the Real Estate Settlement Procedures Act (RESPA) by failing to adhere to its requirements with respect to its customers loss mitigation applications and that Nationstar violated Maryland law by not timely responding to its customers mortgage servicing complaints. The Motion will be granted as to all of Tamara Robinson's claims and as to Demetrius Robinson's claims under 12 C.F.R. Wirtz v. Specialized Loan Servicing, LLC, 886 F.3d 713, 719-20 (8th Cir. 1024.41(a). RESPA's implementing regulations, codified at 12 C.F.R. This Court previously held that a loan modification application can be an inquiry under the MCPA that triggers a duty to respond, and that in the case of the Robinsons, the loan modification application that was "submitted at the request of Nationstar[] necessarily seeks a response." Any additional updates will be posted here. 12 U.S.C. They have a home in Damascus, Maryland purchased by Demetrius Robinson ("Mr. Robinson"). After attempts to modify the loan failed, the Robinsons filed a class action Complaint against Defendant Nationstar Mortgage, LLC ("Nationstar") for alleged violations of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. See Keen, 2018 WL 4111938, at *5-6. 1024.41(f), (g), and (h), and Md. Although the parties have not offered specific details on the nature and timing of those costs and fees, it is reasonable to infer that at least some portion of them were incurred after they submitted their March 7, 2014 loan modification application and after Nationstar had violated Regulation X. ("Opp'n') 13, ECF No. The Class Action Administrator would then begin distribution of the settlement funds. After attempts to modify their loan failed, the Robinsons filed a Class Action Complaint against Defendant Nationstar Mortgage, LLC ("Nationstar") for alleged violations of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. All Rights Reserved. ("MCC") 2, ECF No. . It is the plaintiffs who bear the burden of proving their claims. CFPB Director Kathleen Kraninger said in a statement. Compl. Deiter, 436 F.3d at 466-67. 3d 249, 266 (D. Md. Because all of the Rule 23(a) and (b)(3) requirements are met as to a class asserting violations of 12 C.F.R. McAdams v. Nationstar Mortg. For the claims that rely on the timing of a response, Oliver and the Robinsons propose using changes in the Remedy Star substatus or LSAMS codes and documents stored in FileNet to identify the date a loan modification application was received or marked as complete, to identify the date a response was sent, and to count the number of days between events. 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. Parties, docket activity and news coverage of federal case Robinson et al v. Nationstar Mortgage LLC, case number 8:14-cv-03667, from Maryland Court. Id. 2001) (striking expert testimony because of a contingent fee arrangement), aff'd, 43 F. App'x 547 (4th Cir. In addition, Nationstar asserts that not all loan modification applications referred to an underwriter are complete. The Court will therefore deny the Motion for Summary Judgment as to this argument. The Robinsons appealed the Magistrate Judge's ruling because it did not require Nationstar to run a structural script for a third database. The Federal Rules of Evidence do not prohibit these kinds of arrangements. Some courts have held that administrative costs that predate the alleged RESPA violation cannot constitute "actual damages." at 151. 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"). Accordingly, a loan servicer must comply with Regulation X as to the first loss mitigation application submitted after the effective date. Thus, a loan servicer could not have complied with Regulation X for a loss mitigation application submitted before January 10, 2014 because there was no regulation in effect with which to comply. Id. For example, Nationstar's own internal procedures reveal that when a loss mitigation application is received, a processor reviews it to determine if all required information and documents have been received, and enters one code, specifically "code HMPC" in LSAMS signifying "Financial Application Complete," and a different code, specifically "code HMPA," signifying "Financial Application Incomplete." at *2. In Washington v. Am. This is not the first time Nationstar has been the subject of federal and state investigations. 1024.41. See Wirtz, 886 F.3d at 719-20.