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He is joined by 49 other Attorneys General, the District of Columbia, and other state and federal agencies. Id. Subsequent to the Court's approval, one of the objectors to the settlement filed an appeal. At this stage of the proceedings, the Court must rely on facts in the record, and not assertions in the pleadings. 1024.41(f), (g), and (h); and (4) there is no evidence of actual damages from any RESPA violation. See Fed. You will receive no benefits from the Settlement, but will retain any rights you currently have to sue Nationstar about the same claims in this case. In their Motion for Class Certification, the Robinsons seek certification of two classes. Since neither party contends that Oliver's testimony and report are not "critical," the Court must address the Daubert challenge before reaching the question of class certification. 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. Gunnells v. Healthplan Serv., Inc., 348 F.3d 417, 458 (4th Cir. 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 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] . At this juncture, this allegation plausibly supports a finding of willful noncompliance. 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. If a borrower is experiencing issues or not getting the help needed, contact your state attorneys general. Id. 2014))). Reg. These fees allegedly violated the Fair Debt Collection Practices Act and the Washington state Collection Agency Act. LLCNo. 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. Cal. Fed. 2017), the United States Court of Appeals for the Eleventh Circuit held that postage costs incurred by the plaintiff to send the "initial request for information is not a cost to the borrower 'as a result of the failure' to comply with a RESPA obligation," because a violation has not occurred and will not "necessarily occur" at the time the plaintiff paid the postage. Wright et al. A class action allows representative parties to prosecute not only their own claims, but also the claims of other individuals which present similar issues. Law 13-101 to 13-411 (West 2015). Nationstar filed a notice of settlement and a joint motion to proceed before a magistrate . Mot. Code Ann., Com. 1987) (holding, in the context of an informant who is paid a contingent fee, that the fee should be treated "as a credibility factor"). 12 U.S.C. See Tagatz, 861 F.2d at 1042. Some courts have held that administrative costs that predate the alleged RESPA violation cannot constitute "actual damages." USCA4 Appeal: 21-1087 Doc: 38 Filed: 06/15/2021 Pg: 9 of 33 On February 10, 2022, the Court of Appeals issued a decision affirming the Final Approval Order. 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. 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. 1024.41(c)(1)(ii), which requires a servicer to respond to a loan modification application within 30 days of receipt of a complete loss mitigation application and provide notice of appeal rights; 12 C.F.R. Id. Signed by Judge Theodore D. Chuang on 8/18/2015. Gunnells, 348 F.3d at 427-28. 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. Ass'n, 375 F.2d 648, 653 (4th Cir. While it is not necessary to identify every class member at the time of certification for a class to be "ascertainable," a class cannot be certified if its membership must be determined through "individualized fact-finding or mini-trials." Home [robinsonsettlement.com] 2605(f). 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. 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. . 13-316(e)(1). Nelson, 2017 WL 1167230, at *3 (collecting cases). Portland, OR 97208-3560. Id. James Robinson v. National Student Clearinghouse Toggle navigation Home Commonly Asked Questions Documents The Court approved the settlement at the July 7, 2020 Fairness Hearing. Some of the alleged damages are not supported in law or in fact. 19-303.4 cmt.3. 8:2014cv03667 - Document 18 (D. Md. v. Nationstar Mortgage LLC, Case No. Rather than rendering the testimony inadmissible, the fee arrangement is relevant to the expert's credibility. The Court will not revisit this determination. 1024.41(f), (g), and (h), and Md. Code Ann., Com. R. Civ. 2006). 1 Nationstar later conceded that at the time the Robinsons submitted their application, it had not yet updated its systems to comply with Section 1024.41. 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. "We will be watching the mortgage interest industry to ensure they are treating homeowners fairly and fulfilling their obligations.". Sept. 2, 2015). They have a home in Damascus, Maryland purchased by Demetrius Robinson ("Mr. Robinson"). 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. Discovery Order, ECF No. P. 23(a)(3); Deiter v. Microsoft Corp., 436 F.3d 461, 466-67 (4th Cir. 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. 2601-2617 (2012), specifically RESPA's implementing regulations known as "Regulation X," 12 C.F.R. The Class Action Administrator would then begin distribution of the settlement funds. Deiter, 436 F.3d at 466-67. Id. Nationstar's Motion for Summary Judgment will be granted as to Tamara Robinson. ("Opp'n') 13, ECF No. Nationstar to pay $91 million to settle claims of it harmed - CNBC Thus, the Court concludes that common computerized analysis can largely answer the question of whether Nationstar violated these RESPA provisions with respect to individual borrowers. 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. The relevant rule prohibits an attorney from "offer[ing] an inducement to a witness that is prohibited by law." On June 16, 2017, the Magistrate Judge bifurcated discovery to focus initially on the merits of the Robinsons' individual claim and the question of class certification, ordered Nationstar to disclose electronic records so that the Robinsons could sample Nationstar's data for purposes of a motion for class certification, and limited the discovery of such records to a sample of 400 loans from the period from January 10, 2014 to June 30, 2014 and "to areas which inform" the Court's decision on class certification, namely whether Nationstar was in compliance with Regulation X. Mot. The Robinsons assert that they have paid a total of $6,147.12 in unspecified fees to Nationstar. See 12 C.F.R. Finally, Nationstar argues that summary judgment should be entered on the RESPA claims because the Robinsons cannot establish that they have suffered actual damages as a result of Nationstar's violations of Regulation X. Md. 12 U.S.C. See Torres v. Mercer Canyons Inc., 835 F.3d 1125, 1137 (9th Cir. . After this missed payment, Nationstar assessed a late fee. . 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. The denial letters stated that the loan's principal balance exceeded the limit under HAMP. 26-1. Cf. 1024.41(c)(1)(i). 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. Baez, 709 F. App'x at 983. Mar. Md. 2601 et seq. 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. To view the settlement agreement and consent order, please visit the CSBS's website. 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. A class action is a superior means for "fairly and efficiently adjudicating" whether Nationstar has violated Regulation X and section 3-316(c) of the MCPA. Jennings' office said that these new standards are more robust than existing law and will be in place for three years starting in January 2021. Am. Thus, the Court concludes that, while Nationstar may have defenses as to some borrowers, the common proof that establishes the asserted violations, as well as the common question of whether the Robinsons can prove a pattern-or-practice violation by Nationstar, will predominate over the individual issues as to these claims. Local R. 105.6. 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). If you were contacted on your cell phone by a company via an . Furthermore, Nationstar's argument that the Robinsons are not typical largely recycles the same arguments made in the Motion for Summary Judgment. Nationstar Call Settlement Administrator. uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results." Questions? If you are a member of the Settlement Class, you must submit a completed Claim Form to receive a payment. . More Information 1024.41(i). Many impacted consumers have already received refunds and more will be contacted by the settlement administrator in the coming weeks. All but $28.6 million of its. 1024.1, prescribe additional duties and responsibilities of mortgage servicers under RESPA. UNITED STATES DISTRICT COURT DISTRICT OF MARYLAND. 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. Presently pending is Nationstar's Motion for Summary Judgment, Nationstar's Motion to Strike, and the Robinsons' Motion for Class Certification. Id. Several states also fined Nationstar in 2018 over failing to have proper procedures in place and "unfair and deceptive" mortgage modification policies. v. DEMETRIUS ROBINSON; TAMARA ROBINSON, Plaintiffs - Appellees, v. . Indeed, Mr. Robinson testified that Mrs. Robinson did not sign the Note because she did not purchase the property with him. Since Mrs. Robinson may not bring a claim under Regulation X, she may not be a named class representative. 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. Code Ann., Com. 2d at 1366. On July 16, 2018, the Court affirmed the Magistrate Judge's ruling and required Nationstar to produce all outstanding "records subject to discovery orders." 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. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. MSJ JR 0284. 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. 10696, 10836. Id. Northern District of Ohio, ohnd-1:2021-cv-00452 of 0 An error occurred while loading the PDF. J. Law 13-316(c), which requires a response to a loan modification application within 15 days. . Here, the Robinsons have not put forward any evidence that Mrs. Robinson has an ownership interest in the home that would specifically obligate her to make payments on the loan. McLean I, 595 F. Supp. . The Motion will be otherwise denied. The company has already paid about $57.5 million in restitution to affected consumers, according to the CFPB. Order at 2, ECF No. 2010) (holding that a plaintiff who "was not a borrower or otherwise obligated on the . See Broussard, 155 F.3d at 344. Reg. The fact that each borrower must individually show damages under 12 U.S.C. Because Nationstar employees used standard templates to communicate with borrowers, Oliver concluded that Regulation X violations can be identified through the existence of noncompliant templates and the dates that those templates were in use. . 1024.41(f), (g). Anderson, 477 U.S. at 248. Nationstar argues that it should be granted summary judgment on all of the RESPA claims because Nationstar was required to comply with Regulation X only as to a borrower's first loss mitigation application, and the Robinsons' March 7, 2014 application was not their first loan modification application. Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 344 (4th Cir. 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. 2605(f). . All Rights Reserved. Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. Once the documents are received, the Remedy Star substatus and LSAMS code are changed again to mark the application complete. For purposes of ascertainability, the requirements of 12 C.F.R. Courts have wide discretion to certify a class based on their familiarity with the issues and potential difficulties arising in class action litigation. McLean II, 398 F. App'x at 471. May 31, 2016), the plaintiff had signed the deed of trust but not the promissory note but was nevertheless deemed to have standing because she had owned the home with a right of survivorship with her deceased husband, who had signed the note. 1976). See Robinson v. Nationstar Mortg. 17-0982, 2018 WL 4111938, at *5-6 (M.D. The fee arrangement will be considered as an issue potentially affecting the credibility, rather than the admissibility, of the expert testimony. Law 13-301 and 303. Id. See, e.g., Ward v. Dixie Nat. Marais v. Chase Home Fin., LLC, 24 F. Supp. 1024.41(d). 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. After March 2014, Mrs. Robinson was primarily responsible for communicating with Nationstar and PaCE. The settlement in the form of a consent judgment, filed in the U . Class Action Claims Nationstar Mortgage Unlawfully Failed to Pay However, Nationstar did not comply with all requirements of Regulation X, which became effective on January 10, 2014. Id 1024.41(c)(1). 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. The Robinsons have not made any mortgage payments since January 2014 and have not been assessed any late fees since February 2014. (2000) (reflecting that the prior version of the rules of professional conduct prohibited an attorney from "acquiesc[ing] in the payment of compensation to a witness contingent on the content of his testimony or the outcome of the case"). Id. Id. Moreover, whether Nationstar engaged in a "pattern or practice" of Regulation X violations, within the meaning of 12 U.S.C. Robinson v. Nationstar Mortgage, LLC: Complaint with jury demand at 300. 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. See 12 C.F.R. An 85-year Harvard study found the No. Courts have held that a person who did not sign the promissory note is not a "borrower" for the purposes of RESPA because that individual has not "assumed the loan." 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. PDF NATIONSTAR MORTGAGE LLC, D/B/A MR. COOPER, Defendant. 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. Since Regulation X explicitly does not require a loan servicer to provide a loan modification, the Robinsons' claim that they suffered damages because they did not receive a loan modification is not cognizable under the statute. In Robinson v. Nationstar Mortgage LLC, No. 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. In 2007, Mr. Robinson obtained a loan with the principal amount of $755,000 to refinance the property. For example, in EQT, the court concluded that a proposed class of all individuals who owned an interest in a gas estate was not ascertainable because the actual owners could be determined only through an individualized review of land records. 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. The Robinsons own a business called Green Earth Services, which provides waste and recycling services to clients. The proposed settlement with the CFPB requires Nationstar to pay $73 million in restitution to affected borrowers, as well as a $1.5 million civil penalty to the agency. See Baby Neal for and by Kanter v. Casey, 43 F.3d 48, 56-57 (3d Cir. Opp'n Mot. 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. Id. Law 13-316(c), the Court will grant class certification as to those class members and claims. 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. The Robinsons' expert had written the scripts using data dictionaries and without accessing the databases. 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. This is not the first time Nationstar has been the subject of federal and state investigations. "Mortgage servicers are entrusted with handling significant financial transactions for millions of Americans, including struggling homeowners. Bouchat v. Balt. EQT Prod. The Court will address the varying claims in turn. 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. 1024.41(f), (g), and (h) because there is no evidence in the record that Nationstar violated those provisions. Corp., 546 F.2d 530, 538-39 (3d Cir. 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. A code is entered in Remedy Star when the letter is sent. 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. Date: September 9, 2019, Civil Action No. Nationstar's failings resulted in "substantial consumer harm," CFPB Director Kathleen Kraninger said in a statement. which has the capacity, tendency, or effect of deceiving or misleading consumers." 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. the same interest in establishing the liability of defendants." Accordingly, Nationstar's Motion for Summary Judgment will be granted as to the MCPA claims under sections 13-301 and 13-303. MCC JR 0003. Nationstar also argues that Oliver's report should be stricken as unreliable under the Federal Rules of Evidence and Daubert. Id. 15-3960, 2017 WL 623465, at *8 (D. Md. Law 13-316(e)(1), and "actual damages," 12 U.S.C. Florida Appeals Court Reverses Mortgage Foreclosure - Pike & Lustig, LLP 2d 452, 468 (D. Md. 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. 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. 1024.41(a). or misleading oral or written statement . See id. 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. But see Ayres v. Ocwen Loan Servicing, LLC, 129 F. Supp. Robinson v. Nationstar Mortgage LLC (8:14-cv-03667) 2018). Because all of the Rule 23(a) and (b)(3) requirements are met as to a class asserting violations of 12 C.F.R. That is not so here. To satisfy the numerosity requirement, the proposed class must be so numerous that "joinder of all members is impracticable." Specifically, the loan servicer failed to honor borrowers' loan modification agreements. cause[d] damages retroactively" and "transmogrifie[d]" the costs that predate the RESPA violation into damages. Hickerson, 882 F.3d at 480 (quoting Cooper, 259 F.3d at 199). 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. 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." Sept. 29, 2017); Billings v. Seterus, Inc., 170 F. Supp. He asserted that the amount of fees was calculated based on Nationstar's statements, but he could not specify the nature of the fees. It follows that only borrowers may bring a claim that a loan servicer has violated Regulation X. 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. "); see also 1 William Rubenstein et al., Newberg on Class Actions 2:3 (5th ed. 20-cv, -2202, 2021 WL 4462909, at *1 (S.D. Gariety v. Grant Thornton, LLP, 368 F.3d 356, 366 (4th Cir.