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2605(f)(1)(B), a borrower cannot recover these additional damages "without first recovering actual damages." In their memorandum in opposition to the Motion for Summary Judgment ("Opposition"), the Robinsons admit that they "do not have evidence that Nationstar dual tracked them" or began foreclosure proceedings while a loan modification application was pending. The Final Approval Order, approving the Class-wide Settlement, was entered December 11, 2020. The Nationwide Class and the Maryland Subclass are ascertainable and satisfy the Rule 23(a) factors. On November 21, 2014, the Robinsons filed suit against Nationstar on behalf of themselves and a class of similarly situated individuals nationwide. "[N]amed class representatives [must] demonstrate standing through a 'requisite case or controversy between themselves personally and defendants,' not merely allege that 'injury has been suffered by other, unidentified members of the class to which they belong and which they purport to represent.'" 1024.41(f), (g), and (h) because there is no evidence in the record that Nationstar violated those provisions. 8:2014cv03667 - Document 18 (D. Md. 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. Ass'n, 375 F.2d 648, 653 (4th Cir. The relevant rule prohibits an attorney from "offer[ing] an inducement to a witness that is prohibited by law." The lawsuit alleges, however, that Nationstar has not made interest payments to the plaintiffs, nor provided any record that interest was accruing and due to the homeowners, at any time during or after December 1, 2018 to March 22, 2019 or May 1, 2020 through the present. The Court will therefore deny the Motion for Summary Judgment as to this argument. "[A]n evaluation of the merits to determine the strength of plaintiffs' case is not part of a Rule 23 analysis." A Division of NBC Universal. For a class action brought for violations of Regulation X, a servicer is liable for "actual damages to each of the borrowers in the class" and, upon a finding of a "pattern or practice" of noncompliance, statutory damages amounting to a maximum of $2,000 per class member up to a total of the lesser of $1 million or one percent of the servicer's net worth. 702. MCC JR 530. R. Civ. 1024.41(b)(1), which requires reasonable diligence in obtaining documents and information to complete a loss mitigation application; and Md. For example, it was undisputed that on May 30, 2014, Mr. Robinson, in response to Nationstar's requests for additional information, resubmitted the same information sent with his March 2014 loan modification application. Reg. Accordingly, a loan servicer must comply with Regulation X as to the first loss mitigation application submitted after the effective date. The Robinsons also claim as damages interest overcharges of approximately $141,000. . 1024.41(f), (g), and (h), and Md. First, to the extent that there was a period of time during which Nationstar failed to implement procedures to comply with RESPA, the facts establishing such a gap would be highly relevant to a pattern or practice determination and would be common in every case. TDC-14-3667, 2019 WL 4261696 (D. Md. That notice must be provided within 30 days of receiving the complete loss mitigation application. This argument runs contrary to the plain language of Nationstar's own procedures, which describe the application as "complete" based on the processor's determination, leading to the referral of the complete package to an underwriter. Similarly, since Mr. Robinson has not suffered injury under these provisions, he may not bring those claims on behalf of the class. "[A] trial court should consider the specific factors identified in Daubert where they are reasonable measures of the reliability of expert testimony." Opp'n Mot. Nationstar also asserts that the Robinsons have not identified evidence sufficient to support their MCPA claims. 3d at 1014. Where Accrued Financial addresses a different scenario with a different remedy, the Court does not find that it requires that the testimony of an expert witness paid on contingency fee basis must be excluded. . . ("Opp'n') 13, ECF No. Fed. 2016) (dicta). at 358. See, e.g. Gunnells, 348 F.3d at 424 (quoting Amchem, 521 U.S. at 615). Nationstar's Motion for Summary Judgment will be granted as to Tamara Robinson. Mr. Robinson then submitted another loan modification application on August 25, 2014. The cases cited by the Robinsons do not alter the Court's conclusion. Id. Courts have wide discretion to certify a class based on their familiarity with the issues and potential difficulties arising in class action litigation. (quoting East Tex. Eligible consumers will be contacted by Nationstar or the settlement administrator about refunds under the settlement. Specifically, if a loss mitigation application is received "45 days or more before a foreclosure sale," the loan servicer must provide a notice to the borrower "in writing within 5 days" of receiving it in which the servicer acknowledges receipt of the application and states whether the "application is either complete or incomplete." 2013). 2002) (affirming without addressing the propriety of the striking of the expert testimony). The company has already paid about $57.5 million in restitution to affected consumers, according to the CFPB. 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"). Nationstar's criticism that Oliver failed to use the correct data field to identify the date when a loss mitigation application was complete, and failed to consider the timing of application relative to the date of scheduled foreclosure sale, ring hollow because Nationstar provided to Oliver only limited data fields, which did not contain clear field names or definitions. Am. at *2. The loan is then evaluated for loan modification options. 1024.41(d). At this stage of the proceedings, the Court must rely on facts in the record, and not assertions in the pleadings. See Broussard, 155 F.3d at 344. 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. Tagatz v. Marquette Univ., 861 F.2d 1040, 1042 (7th Cir. After this missed payment, Nationstar assessed a late fee. (quoting 7AA Charles Allan Wright et al., Federal Practice and Procedure 1778 (3d ed. If you were contacted on your cell phone by a company via an . 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. This field is for validation purposes and should be left unchanged. Specifically, the loan servicer failed to honor borrowers' loan modification agreements. 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"). This abandoned high school was converted into a 31-unit apartment building, number of unlawful practices in handling mortgages following the Great Recession. 1024.41(b)(1). Throughout discovery, Nationstar repeatedly stated that it could not produce the data on loss mitigation or loan modification applications from its databases in the form requested by the Robinsons. 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. 2601-2617 (2012), specifically RESPA's implementing regulations known as "Regulation X," 12 C.F.R. Moreover, even if the fee arrangement violated the ethical rules for attorneys, "it does not follow that evidence obtained in violation of the rule is inadmissible." See 12 C.F.R. From this methodology, Oliver concluded that Nationstar failed to inform borrowers of their appeal rights in 39 percent of the sampled loans and failed to exercise reasonable diligence by improperly requested the same documentation already provided in 18 percent of the loans. 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. THEODORE D. CHUANG United States District Judge. uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results." 26-1. Cf. In 2007, Mr. Robinson obtained a loan with the principal amount of $755,000 to refinance the property. 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. According to Oliver, to determine that certain disclosures or specific information were conveyed to borrowers, the "objectid" field used in FileNet can be used to identify the type of letter sent. 2001) (striking expert testimony because of a contingent fee arrangement), aff'd, 43 F. App'x 547 (4th Cir. The Robinsons' Motion for Class Certification will be GRANTED IN PART and DENIED IN PART. 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. 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. 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. Nationstar's reliance on Accrued Financial Services v. Prime Retail, Inc., 298 F.3d 291 (4th Cir. Once an underwriter is assigned, that employee double-checks whether the application contains all required documentation and is complete. Finally, the Court finds that common issues of law and fact predominate. Fed. In support of these claims, Mr. Robinson testified in his deposition that the $141,000 in interest represents the amount that the Robinsons have been overcharged over the life of the loan. 19-303.4 cmt.3. Co., 350 F.3d 1018, 1023 (9th Cir. 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. A class action allows representative parties to prosecute not only their own claims, but also the claims of other individuals which present similar issues. The Robinsons' expert had written the scripts using data dictionaries and without accessing the databases. Since the Court has already concluded that Nationstar is entitled to summary judgment on the Robinsons' claims under 12 C.F.R. 15-05811, 2016 WL 3055901 (N.D. Cal. When each event occurseither the mailing of a letter or the changing of a code or substatusthe date is recorded in the databases. See 12 C.F.R. 2010). The Robinsons and Nationstar then engaged in a series of tortured exchanges over the next several months. Appellate Win Affirms $3 Million Settlement in Class Action against Nationstar Mortgage - Tycko & Zavareei LLP Contact Us We look forward to hearing from you. On July 16, 2018, the Court affirmed the Magistrate Judge's ruling and required Nationstar to produce all outstanding "records subject to discovery orders." Oliver is the Chief Executive Officer of Hilltop Advisors LLC, a financial services consulting, compliance audit, and accounting advisory firm, and has extensive experience conducting compliance reviews for mortgage servicers, including for compliance with loss mitigation procedures. Sept. 29, 2021). 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. Law 13 . 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. Co v. Adair, 764 F.3d 347, 359-60 (4th Cir. The first of these prerequisites is that the class must exist and be "readily identifiable" or "ascertainable" by the court through "objective criteria." Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 344 (4th Cir. Nationstar's Motion to Strike will be DENIED. See id. HealthSystem, 669 F.3d 802, 812 (7th Cir. Lembach v. Bierman, 528 F. App'x 297 (4th Cir. HARRISBURG Attorney General Josh Shapiro, as part of a multistate effort, today announced that his office obtained an $86.3 million settlement from Nationstar Mortgage, the country's fourth-largest mortgage servicer. 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. If the named plaintiff satisfies all of the Rule 23(a) requirements and the Rule 23(b)(3) requirements, then class certification is appropriate. In Robinson v., Under the RESPA, civil liability is limited to "borrowers": "[w]hoever fails to comply with any provision of, Full title:DEMETRIUS ROBINSON and TAMARA ROBINSON, Plaintiffs, v. NATIONSTAR MORTGAGE, Court:UNITED STATES DISTRICT COURT DISTRICT OF MARYLAND. 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." These fees allegedly violated the Fair Debt Collection Practices Act and the Washington state Collection Agency Act. Notably, Oliver's analysis did not consider foreclosure information because the data produced did not include dates of foreclosure sales. An "unfair or deceptive" trade practice includes a "false . 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. Nationstar's failings resulted in "substantial consumer harm," CFPB Director Kathleen Kraninger said in a statement. "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." 1024.41(i). Accordingly, Nationstar's Motion for Summary Judgment will be granted as to the MCPA claims under sections 13-301 and 13-303. 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. 1024.41(a). 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."). 2006). 10696, 10708 (Feb. 14, 2013) (codified at 12 C.F.R. Id. Any additional updates will be posted here. 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. Fed. In addition, Nationstar asserts that not all loan modification applications referred to an underwriter are complete. Nationstar further argues that summary judgment must be entered in its favor on the Robinsons' claims under 12 C.F.R. Mich. 2016), at least one district court has held that loan servicers need not comply with Regulation X if the borrower had previously submitted a loss mitigation application before the January 10, 2014 effective date, see Trionfo v. Bank of America, N.A., No. Messner v. Northshore Univ. . Bouchat v. Balt. 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. 2605(f). RESPA's implementing regulations, codified at 12 C.F.R. 1024.41(b)(2)(i)(B) and Md. or misleading oral or written statement . 1 . . Nationstar also argues that Oliver's report should be stricken as unreliable under the Federal Rules of Evidence and Daubert. Thus, Mrs. Robinson is not "obligated" to pay the amount due on the Note and therefore is not a "borrower" for purposes of RESPA. 2. See Farmer v. Ramsay, 159 F. Supp. Id. He asserts that damages to borrowers can be calculated based on entries in LSAMS and other data showing that fees were assessed, and that it would be possible to identify which fees would not have been assessed but for a RESPA violation. The commonality requirement is also met. The Borrower Payment Amount shall be used: (1) for payments to borrowers who submit claims and are in either or both of the Service Transfer and Property Preservation Populations set forth below; and (2) for reasonable costs and expenses of the Settlement Administrator, including taxes and fees for tax counsel. It will be otherwise denied. 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. 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. Id. WASHINGTON, D.C. 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. Before the error was discovered, Mr. Robinson appealed this offer as insufficient on April 10, 2014. Co, 445 F.3d 311, 318 (4th Cir. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). This is not the first time Nationstar has been the subject of federal and state investigations. News Ask a Lawyer 2013)). Oliver's expert report focuses on the use of Nationstar's internal databases to determine whether Nationstar has systematically failed to comply with various requirements of Regulation X. Signed by Judge Theodore D. Chuang on 8/18/2015. Moreover, whether Nationstar engaged in a "pattern or practice" of Regulation X violations, within the meaning of 12 U.S.C. DEMETRIUS ROBINSON and TAMARA ROBINSON, Plaintiffs, v. NATIONSTAR MORTGAGE LLC, Defendant. ; 78 Fed. 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. 1024.1, prescribe additional duties and responsibilities of mortgage servicers under RESPA. The entry under "objected" acts as a unique identifier for an electronic file, but it does not contain information about the file's substance and could in fact contain multiple submissions or documents relating to one borrower. The Deed specifies that a person who signs it but "does not execute the note" is a co-signer of the Deed in order to mortgage and convey that person's interest in the Property under the terms of the Deed, but "is not personally obligated to pay the sums secured by this Security Instrument," and her consent is not required to alter the terms of the Deed or the Note. Home Loans, No. See 12 C.F.R. 2018); Renfroe v. Nationstar Mortg., LLC, 822 F.3d 1241, 1247 n.4 (11th Cir. In focusing on whether RESPA violations can be established through computerized analysis rather than individual file review, the parties lose track of the fact that because statutory damages are predicated on a finding that there has been a pattern or practice of RESPA violations, that issue common to almost any individual claim plays an outsized role in the predominance analysis. Where it is now apparent, in hindsight, that Nationstar was permitted to withhold relevant and necessary data in the discovery process, it is unsurprising that Nationstar employees would then review loan files, with their complete data, and identify problems. Md. 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. The one-time consulting fee was paid in August 2013 to PaCE, a forensic loan auditor, to advise the Robinsons on how to communicate with Nationstar and to handle their loan. McLean v. GMAC Mortg. Id. Id. McLean I, 595 F. Supp. At different stages in the processing of a loan modification application, Nationstar employees enter certain codes into certain databases, and certain information can be stored and accessed through those applications. 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. 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. Nationstar has no process for standardizing file names. PO Box 3560. See id. See Fed. 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] . Id. Law 13-316(e)(1), and "actual damages," 12 U.S.C. Some of the alleged damages are not supported in law or in fact. They do not seek damages in the Amended Complaint for emotional distress or include such a claim in their itemized list of damages submitted in discovery. Gariety v. Grant Thornton, LLP, 368 F.3d 356, 366 (4th Cir. For purposes of ascertainability, the requirements of 12 C.F.R. 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. In Baez v. Specialized Loan Servicing, LLC, 709 F. App'x 979 (11th Cir. That provision provides, in parallel, that a loan servicer which does not comply with Regulation X is liable "to the borrower." Nationstar filed a notice of settlement and a joint motion to proceed before a magistrate . While Mrs. Robinson stated that she was conducting bookkeeping for Green Earth Services during the relevant time frame, she testified that her work was less than six hours per week, and the Robinsons have not shown that her time spent communicating with Nationstar "resulted in actual pecuniary loss" to Mr. Robinson or the business. 1024.41(f), (g). 2005))). 28, 2017). More Information 2601-2617 (2012), specifically RESPA's implementing regulations known as "Regulation X," 12 C.F.R. Filed by Janie Robinson. Law 13-101 to 13-411 (West 2015). A servicer that fails to comply with Regulation X is liable for "any actual damages to the borrower as a result of the failure" to comply. Id. For the requirements that hinge on the timing of a communication or response, Oliver's methodology consists of using Nationstar's data from the LSAMS and FileNet software applications relating to a sample of 400 loans to identify the dates when certain events occurredsuch as the filing of a loan modification application, when a loan modification application became complete, and the sending of an acknowledgment or decision letter to a borrowerand then counting the days between the dates to assess whether a RESPA timing requirement was satisfied.