A fact is "material" if it "might affect the outcome of the suit under the governing law." Joint Record ("MSJ JR") 0102. If the initial application is not complete, a different Remedy Star substatus notation and LSAMS code are entered, and a letter is created and sent to the borrower asking for the required documents. After two more extensions were granted, based on a finding by the Magistrate Judge that "Defendant has failed to comply" with its discovery obligations and delayed the process, discovery closed on March 22, 2018. Whether an application is complete depends on the requirements of the investor who holds the loan. Thorn v. Jefferson-Pilot Life Ins. . 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. v. W.R. Grace & Co., 6 F.3d 177, 188 (4th Cir. Instead, he analyzed certain data fields that were returned by the scripts written by a different expert. 2010) (considering consistency of results that provide finality to the defendant as favoring a finding of superiority). . 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. Md. Co, 445 F.3d 311, 318 (4th Cir. See, e.g., Ward v. Dixie Nat. 2001) (striking expert testimony because of a contingent fee arrangement), aff'd, 43 F. App'x 547 (4th Cir. 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. 1 . 10696, 10708 (Feb. 14, 2013) (codified at 12 C.F.R. UNITED STATES DISTRICT COURT DISTRICT OF MARYLAND. In approving such a modification, Nationstar made a mistake: the underwriter working on the Robinsons' loan had erroneously double-counted their income. Nationstar further argues that summary judgment must be entered in its favor on the Robinsons' claims under 12 C.F.R. PO Box 3560. 1024.41(d). Furthermore, according to Nationstar, to identify the content of a letter sent to a borrower, the letter itself must be viewed. For the foregoing reasons, Nationstar's Motion for Summary Judgment will be GRANTED IN PART and DENIED IN PART. At least one court has found a similar expert report by Oliver to meet the Daubert standard. For the Regulation X provisions that require the servicer to communicate specific information to a borrower, Oliver's methodology involves reviewing a sample of loan files and identifying a specific communication to a borrower based on the file name. However, Nationstar did not comply with all requirements of Regulation X, which became effective on January 10, 2014. To satisfy the numerosity requirement, the proposed class must be so numerous that "joinder of all members is impracticable." v. Nationstar Mortgage LLC, Case No. 1024.41(b)(2)(i)(B), which requires that an acknowledgment letter be sent within five days of receipt of a loss mitigation application; 12 C.F.R. R. Civ. 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. Finally, where Nationstar has offered no specific argument in its brief, beyond those addressed above, to refute Oliver's proffered analysis for identifying RESPA violations arising from the failure to notify borrowers of their appeal rights or the failure to exercise diligence in requesting documents based on repeated requests for the same documents, 12 C.F.R. Once an underwriter is assigned, that employee double-checks whether the application contains all required documentation and is complete. Filed by Janie Robinson. 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. McLean I, 595 F. Supp. 1990) (citing Universal Athletic favorably for this proposition). He was retained by the Robinsons under an arrangement through which he is to be paid a flat fee of $125,000: $62,500 up front, with an additional $62,500 to be paid if a class is certified in this case. 10696, 10708, provides that "[a] servicer is only required to comply with the requirements of this section for a single complete loss mitigation application for a borrower's mortgage loan account." The next day, Nationstar sent a letter noting that the August 25 application had been received and requesting additional information. They have a home in Damascus, Maryland purchased by Demetrius Robinson ("Mr. Robinson"). In 2017, the CFPB fined Nationstar $1.75 million for failing to report accurate data about its mortgage transactions. Ass'n, 375 F.2d 648, 653 (4th Cir. 2605(f). The Court may rely only on facts supported in the record, not simply assertions in the pleadings. Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act ("Regulation X"), 78 Fed. In 2007, Mr. Robinson obtained a loan with the principal amount of $755,000 to refinance the property. Id. Sep. 9, 2019). P. 23(a)(4); Ward v. Dixie Nat'l Life Ins. 1024.41(a). Code Ann., Com. See Torres v. Mercer Canyons Inc., 835 F.3d 1125, 1137 (9th Cir. MCC JR 0003. 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. Nationstar also seeks summary judgment on the Robinsons' claims under the MCPA, which include claims of misleading statements in connection with the collection of consumer debts, in violation of section 13-301(1), (3) and section 13-303(4)-(5) of the MCPA, and claims that Nationstar did not respond to consumer inquiries within 15 days, in violation of section 13-316(c) of the MCPA. 2601 et seq. 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. 1993) (quoting Blum v. Yaretsky, 457 U.S. 991, 1001 n.13 (1982)). 2010) (holding that a plaintiff who "was not a borrower or otherwise obligated on the . The distinction is crucial. If the Court approves the Settlement and it becomes final and effective, and you remain in the Settlement Class, you will receive a payment. . After several customers of Green Earth Services canceled its services, the Robinsons sought loss mitigation in the form of a loan modification from Nationstar. Id. Gunnells, 348 F.3d at 427-28. 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. 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. 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. LLC, No. 2003). See Krakauer v. Dish Network, L.L.C., 925 F.3d 643, 658 (4th Cir. Finally, to the extent that Oliver did not execute his stated methodology for identifying damages, that limitation is again based in part on Nationstar's failure to make relevant data available to him. 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. Fed. 2010). 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. 2010). See Fed. 1024.41(c)(1)(i)-(ii), (g). The regulation is silent on whether a loss mitigation application submitted before January 10, 2014 could qualify as the "single complete loss mitigation application." The Robinsons and Nationstar then engaged in a series of tortured exchanges over the next several months. See Farber, 2017 WL 4347826 at 15; Billings, 170 F. Supp. Finally, the Court finds that Mr. Robinson will adequately represent the absent class members. If a class is ascertainable, it must then satisfy all four elements of Rule 23(a): numerosity, commonality, typicality, and adequacy. On March 8, 2014, Nationstar sent to Mr. Robinson a letter stating that he was ineligible for a HAMP modification, but on March 15, 2014, it sent a different letter offering a loan modification under which Mr. Robinson would receive a reduced interest rate for two years. Some of the alleged damages are not supported in law or in fact. Ohio 2014). Presently pending is Nationstar's Motion for Summary Judgment, Nationstar's Motion to Strike, and the Robinsons' Motion for Class Certification. 1024.41(i). The Nationwide Class and the Maryland Subclass are ascertainable and satisfy the Rule 23(a) factors. In their Motion for Class Certification, the Robinsons seek certification of two classes. 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. Sept. 9, 2019), there were multiple other claims at issue, for which Oliver's expert report seemed better suited to address. On February 16, 2017, the Court referred the case to United States Magistrate Judge Charles B. 1024.41(h)(1), (4). 164. In assessing the Motion, the Court views the facts in the light most favorable to the nonmoving party, with all justifiable inferences drawn in its favor. The Robinsons assert that they have paid a total of $6,147.12 in unspecified fees to Nationstar. The Complaint asserts two claims. The use of a class action is primarily justified on the grounds of efficiency, because it advances judicial economy to resolve common issues affecting all class members in a single action. However, if the costs are shown to have been incurred in response to the RESPA violation, the Court finds that they would be actual damages within the meaning of 12 U.S.C. See Md. Accordingly, Nationstar's Motion for Summary Judgment will be granted as to the MCPA claims under sections 13-301 and 13-303. For example, since default fees are often paid by sources other than the borrower, such as in a short sale or refinancing, Nationstar challenges Oliver's assessment that fees identified through LSAMS can be deemed to constitute damages from RESPA violations, because the software does not reflect who paid the fee. Code Ann., Com. 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. Many impacted consumers have already received refunds and more will be contacted by the settlement administrator in the coming weeks. . 1967). Finally, the named plaintiff must "fairly and adequately protect the interests of class" without a conflict of interest with the absent class members. Appellate Win Affirms $3 Million Settlement in Class Action against Nationstar Mortgage - Tycko & Zavareei LLP Contact Us We look forward to hearing from you. Law 13-316(e)(1), and "actual damages," 12 U.S.C. Robinson, 2015 WL 4994491, at *4 (citing Marchese v. JPMorgan Chase Bank, N.A., 917 F. Supp. 12 C.F.R. 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. The Robinsons' Motion for Class Certification will be GRANTED IN PART and DENIED IN PART. (quoting 7AA Charles Allan Wright et al., Federal Practice and Procedure 1778 (3d ed. Because all of the Rule 23(a) and (b)(3) requirements are met as to a class asserting violations of 12 C.F.R. 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. The Robinsons have not made any mortgage payments since January 2014 and have not been assessed any late fees since February 2014. 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. See Keen, 2018 WL 4111938, at *5-6. 2d 452, 467 (D. Md. Campbell v. Nationstar Mortg., 611 F. App'x 288, 297-98 (6th Cir. 1024.41(b)(1), which requires reasonable diligence in obtaining documents and information to complete a loss mitigation application; and Md. As for typicality, the named plaintiff must be "typical" of the class, such that that the class representative's claim and defenses are "typical of the claims or defenses of the class" in that prosecution of the claim will "simultaneously tend to advance the interests of the absent class members." The language of the regulation states not that a loan servicer must comply with Regulation X's requirements only for a borrower's first loss mitigation application, but that a loan servicer must "comply with the requirements" only "for a single complete loss mitigation application." 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. Gunnells v. Healthplan Serv., Inc., 348 F.3d 417, 458 (4th Cir. The public policy interest at issue was one against "stirring up litigation or promoting litigating for the benefit of the promoter rather than for the benefit of the litigant or the public," an interest not implicated in the same manner by the fee arrangement with the particular expert witness in this case. at 248-49. Law 13 . Reg. or other representation . While class members would not be eligible for statutory damages unless actual damages are shown, see 12 U.S.C. 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. In response, on May 30, 2014, Mr. Robinson sent Nationstar the exact same application that he had submitted on March 7, 2014. Law 13-316(c), the Court will grant class certification as to those class members and claims. Co v. Adair, 764 F.3d 347, 359-60 (4th Cir. The Robinsons' expert had written the scripts using data dictionaries and without accessing the databases. Discovery Order, ECF No. Furthermore, the Robinsons have made a sufficient showing that a central computerized analysis of Nationstar data would substantially, if not completely, resolve questions of whether RESPA violations occurred. 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. Id. 2010). Every mortgage has a unique loan number that can be used to identify the borrower and the loan in each of the four databases. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. The economic challenges and burdens that homeowners currently face are similar to the ones experienced following the Great Recession. But see Sutton v. CitiMortgage, Inc., 228 F. Supp. Signed by Magistrate Judge Jillyn K Schulze on 9/9/2016 . See Farmer v. Ramsay, 159 F. Supp. 2601-2617 (2012), specifically RESPA's implementing regulations known as "Regulation X," 12 C.F.R. 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. Code Ann., Com. The "Nationwide Class" is composed of "[a]ll persons in the United States that submitted a loss mitigation application to Nationstar after January 10, 2014, and through the date of the Court's certification order." 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. 1024.41(f), (g), and (h), and Md. Subsequent to the Court's approval, one of the objectors to the settlement filed an appeal. These fees allegedly violated the Fair Debt Collection Practices Act and the Washington state Collection Agency Act. 2012). Since the MCPA and Regulation X allow recovery only of "economic damages," Md. 1024.41(c)(1)(i). Robinson et al v. Nationstar Mortgage LLC, No. 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." 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. "); cf. 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." Code Ann., Com. 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. See D. Md. Subscribe to our free newsletter right now. 1994) (noting that a single common issue is sufficient to meet the commonality requirement). 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. This abandoned high school was converted into a 31-unit apartment building, number of unlawful practices in handling mortgages following the Great Recession. 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." 2013)). Filing fee paid $ 402, Receipt number AOHNDC-10680087. "[A]n evaluation of the merits to determine the strength of plaintiffs' case is not part of a Rule 23 analysis." If you were contacted on your cell phone by a company via an . 2006). 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. The "Maryland Subclass" consists of "[a]ll persons in the State of Maryland that submitted a loss mitigation application to Nationstar after January 10, 2014, and through the date of the Court's certification order." 1024.41(a). JA 130. Nationstar employees use four software applications and databases to store and track electronic information relating to loans: (1) Loan Services and Accounting Management System ("LSAMS"), Nationstar's primary loan servicing software, which contains data for loans, including the permanent records of the accounting history, communication logs, and letters documented with codes that were sent to the borrower; (2) Remedy Star, Nationstar's proprietary loss mitigation and loan modification management system, which, among other tasks, tracks the status and timeline of a loan modification and links to documents stored in FileNet; (3) LPS Desktop ("LPS"), an application which Nationstar uses to track and manage foreclosure processes and communicate with outside attorneys; and (4) FileNet, a platform that houses PDF images of documents, including letters sent to borrowers by Nationstar.

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