Lembach v. Bierman, 528 F. App'x 297 (4th Cir. 1024.41(c)(1)(ii), 1024.41(b)(1), the Court concludes that common computerized analysis will substantially advance the resolution of such claims, even if not entirely eliminating the need for reviewing certain specific file documents. The Final Approval Order, approving the Class-wide Settlement, was entered December 11, 2020. v. DEMETRIUS ROBINSON; TAMARA ROBINSON, Plaintiffs - Appellees, v. . Individual damages would be below the cost of litigation even if each class member could establish that Nationstar's conduct consisted of a pattern or practice of violating Regulation X, because the statute limits such damages to $2,000 per borrower. 2011) ("[T]he possibility that a well-defined class will nonetheless encompass some class members who have suffered no injury . See Farmer v. Ramsay, 159 F. Supp. 2d 452, 468 (D. Md. Since the Court has already concluded that Nationstar is entitled to summary judgment on the Robinsons' claims under 12 C.F.R. (quoting 7AA Charles Allan Wright et al., Federal Practice and Procedure 1778 (3d ed. In Washington v. Am. 1024.41(i). In its Motion to Strike, Nationstar moves to strike the report of the Robinsons' expert witness, Geoffrey Oliver, on the grounds that (1) Oliver was hired pursuant to an ethically improper contingency fee agreement; and (2) his testimony does not meet the requirements of Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). 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. P. 23(b)(3). 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. If a class is ascertainable, it must then satisfy all four elements of Rule 23(a): numerosity, commonality, typicality, and adequacy. Md. Based on the language of Regulation X, the Court finds that a loss mitigation application submitted before the effective date does not count as the single application subject to the regulation. Law 13-301 and 13-303, because the Robinsons do not have standing to bring those claims. Rather, the Court finds, based on the reasoning of Tagatz and Universal Athletic Sales, that the potential violation of an ethical rule does not itself make Oliver's testimony inadmissible. Gunnells v. Healthplan Serv., Inc., 348 F.3d 417, 458 (4th Cir. 2005))). Cf. UNITED STATES DISTRICT COURT DISTRICT OF MARYLAND. 2601-2617 (2012), specifically RESPA's implementing regulations known as "Regulation X," 12 C.F.R. A code is also added to LSAMS to put a hold on foreclosure proceedings. 1024.41(a). 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. 2010). 2605(f)(1)(B), a borrower cannot recover these additional damages "without first recovering actual damages." If more documents are required, then the same Remedy Star substatus and LSAMS code that denote missing documents are entered. . . After several customers of Green Earth Services canceled its services, the Robinsons sought loss mitigation in the form of a loan modification from Nationstar. In analyzing this question, a court compares the class representative's claims and defenses to those of the absent class members, considers the facts needed to prove the class representative's claims, and assesses the extent to which those facts would also prove the claims of the absent class members. 1024.41(i). See supra parts I.B.1, I.B.3, I.C.1. 164. Marchese v. JPMorgan Chase Bank, N.A., 917 F. Supp. Code Ann., Com. J. Before relating the facts relevant to the Motion for Class Certification, the Court will highlight the relevant procedural history affecting the record before the Court. But see Ayres v. Ocwen Loan Servicing, LLC, 129 F. Supp. . This abandoned high school was converted into a 31-unit apartment building, number of unlawful practices in handling mortgages following the Great Recession. Summ. 12 C.F.R. MCC JR 530. Sept. 2, 2015). The Class Action Administrator would then begin distribution of the settlement funds. Class litigation would also promote consistent results on the common question whether Nationstar engaged in a pattern or practice of violating Regulation X and would provide Nationstar with finality and closure on that issue. 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. Law 13-316(e)(1), and "actual damages," 12 U.S.C. The Court will therefore deny the Motion for Summary Judgment as to this argument. 1024.41(f), (g). The Robinsons appealed the Magistrate Judge's ruling because it did not require Nationstar to run a structural script for a third database. A conflict of interest will not defeat the adequacy requirement when "all class members share common objectives[,] the same factual and legal positions, and . Tagatz v. Marquette Univ., 861 F.2d 1040, 1042 (7th Cir. Whether an application is complete depends on the requirements of the investor who holds the loan. 1024.41(f), (g), and (h) because there is no evidence in the record that Nationstar violated those provisions. In Robinson v. Nationstar Mortgage LLC, No. 16-0307, 2017 WL 1167230, at *3 (E.D.N.C. Id. Nelson, 2017 WL 1167230, at *3 (collecting cases). Nationstar broke that trust by engaging in unfair and deceptive practices," Kraninger added. 877-683-9363. Subscribe to our free newsletter right now. Law 13-303(4)-(5), 13-408. Md. Cent. See, e.g., Ward v. Dixie Nat. Although each class member must individually show that they suffered "actual damages" under 12 U.S.C. 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. 2605(f). This is not the first time Nationstar has been the subject of federal and state investigations. 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. A dispute of material fact is only "genuine" if sufficient evidence favoring the nonmoving party exists for the trier of fact to return a verdict for that party. . Since the Court already considered and ruled on these issues, see supra part I.B, it will not revisit those arguments here. 2014))). It does not mount any persuasive attack on Oliver's "principles and methodology," Westberry, 178 F.3d at 261, which largely consisted of counting the number of days between events and reviewing files for a particular loan to determine whether they contained certain standard content. The cases cited by the Robinsons do not alter the Court's conclusion. Law 13-301(1). Bouchat, 346 F.3d at 522. LLC, No. 1024.41 Ask to speak in court about the fairness of the Settlement. 2601-2617 (2012), specifically RESPA's implementing regulations known as "Regulation X," 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. 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. 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. Va., Inc., 543 F.2d 1075, 1080 (4th Cir. The Robinsons assert that they have paid a total of $6,147.12 in unspecified fees to Nationstar. Ohio 2014). 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." That notice must be provided within 30 days of receiving the complete loss mitigation application. at 983 (quoting 12 U.S.C. 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. 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. Plaintiffs Demetrius and Tamara Robinson (the "Robinsons") have resided in a home in Damascus, Maryland that has been subject to a mortgage loan. Any additional updates will be posted here. See 12 C.F.R. 1024.41(b)(1), (b)(2)(i)(B), and (c)(1)(ii) and Md. 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. 222. 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. 2006). Signed by Judge Theodore D. Chuang on 8/18/2015. 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. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 348-49 (2011) ("[A] class representative must be part of the class and possess the same interest and suffer the same injury as the class members." Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act ("Regulation X"), 78 Fed. Summary judgment will therefore be entered for Nationstar on the claims that Nationstar violated subsections (f) and (g). Stewart v. Bierman, 859 F. Supp. On July 16, 2018, the Court affirmed the Magistrate Judge's ruling and required Nationstar to produce all outstanding "records subject to discovery orders." These events will be represented by discrete data points in Nationstar's databases, such that these violations may be proved through that data. Class Certif. 1024.1, prescribe additional duties and responsibilities of mortgage servicers under RESPA. After March 2014, Mrs. Robinson was primarily responsible for communicating with Nationstar and PaCE. . or misleading oral or written statement . Nationstar seeks summary judgment on the Robinsons' RESPA claims on the grounds that (1) Mrs. Robinson is not a proper plaintiff because she is not a "borrower" within the meaning of RESPA; (2) RESPA is inapplicable because Nationstar was required to comply with Regulation X only as to the Robinsons' first loss mitigation application; (3) there is no evidence to support a violation of 12 C.F.R. Nationstar Call Settlement Administrator. Robinson v. Nationstar Mortgage, LLC Complaint with jury demand against Nationstar Mortgage, LLC. Mot. Plaintiffs "must present specific evidence to establish a causal link between the [servicer's] violation and their injuries." Nationstar also asserts that the Robinsons have not identified evidence sufficient to support their MCPA claims. Am. 2004). Portland, OR 97208-3560. See Keen, 2018 WL 4111938, at *5-6. 2601 et seq. She alleges Nationstar was sent multiple disputes by both Experian and Equifax with documentation showing the debt was forgiven, yet Nationstar persisted in reporting the debt as valid. R. Civ. 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. 17-0982, 2018 WL 4111938, at *5-6 (M.D. See Baby Neal for and by Kanter v. Casey, 43 F.3d 48, 56-57 (3d Cir. McLean v. GMAC Mortg. Although the Robinsons contend that they would have pursued other loss mitigation options in the absence of the RESPA violations, they have not identified any such options in a way that would permit a calculation of damages associated with any lost opportunity. News Ask a Lawyer To view the settlement agreement and consent order, please visit the CSBS's website. Nationstar has no process for standardizing file names. 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. Nationstar's failings resulted in "substantial consumer harm," CFPB Director Kathleen Kraninger said in a statement. Fla. 2009), aff'd, 398 F. App'x 467, 471 (11th Cir. 1024.41(b)(1), which requires reasonable diligence in obtaining documents and information to complete a loss mitigation application; and Md. Fed. Law 13-316(c), the Court will grant class certification as to those class members and claims. 1024.41(d). 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." The comments to that rule state that the "common law rule in most jurisdictions is . 2010) (considering consistency of results that provide finality to the defendant as favoring a finding of superiority). Id. Sept. 9, 2019), there were multiple other claims at issue, for which Oliver's expert report seemed better suited to address. Make your practice more effective and efficient with Casetexts legal research suite. In addition to the fee paid to PaCE, the Robinsons also assert as damages $50.58 in administrative costs, specifically postage fees for sending information relating to their loan modification application to Nationstar, and 120 hours of time expended on the loan modification process. 2016) (dicta). Sept. 29, 2017); Billings v. Seterus, Inc., 170 F. Supp. 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. LLC, No. See Fed. See 12 C.F.R. 1024.41(f), (g), and (h) and Md. FCRA). See MCC JR0529-31. Claim Your Cash Every Week! These fees allegedly violated the Fair Debt Collection Practices Act and the Washington state Collection Agency Act. Anderson, 477 U.S. at 248. Here, Mrs. Robinson signed the Deed but did not sign the Note. 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. Gunnells, 348 F.3d at 427-28. Petitioner: NATIONSTAR MORTGAGE, LLC: Respondent: TAMARA ROBINSON and DEMETRIUS ROBINSON: Case Number: 19-379: Filed: September 24, 2019: Court: U.S. Court of Appeals . Code Ann., Com. However, Nationstar did not comply with all requirements of Regulation X, which became effective on January 10, 2014. The denial letters stated that the loan's principal balance exceeded the limit under HAMP. Law 13-316(c), which requires a response to a mortgage servicing complaint or inquiry within 15 days. 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. Law 13-301 and 303. 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. Id. After they became delinquent on their loan, the Robinsons submitted another loan modification application to Nationstar on March 7, 2014. 1024.41(f), (g), and (h), and Mr. Robinson's MCPA claim under sections 13-301 and 13-303. A fact is "material" if it "might affect the outcome of the suit under the governing law." 2010). cause[d] damages retroactively" and "transmogrifie[d]" the costs that predate the RESPA violation into damages. He asserted that the amount of fees was calculated based on Nationstar's statements, but he could not specify the nature of the fees. at 983. "[A] trial court should consider the specific factors identified in Daubert where they are reasonable measures of the reliability of expert testimony." 1024.41(h)(1), (4). 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. Congress enacted RESPA to protect consumers from "unnecessarily high settlement charges caused by certain abusive practices" in the real estate mortgage industry, and to ensure "that consumers throughout the Nation are provided with greater and more timely information on the nature and costs of the settlement process." 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. 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. 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 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. On February 10, 2022, the Court of Appeals issued a decision affirming the Final Approval Order. 3d 1011, 1015 (W.D. 2. 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. Instead, the Robinsons assert that Nationstar has not affirmatively proven that it conducted such reviews. R. Civ. Id. MCC JR 318, 530-531. 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. See 12 C.F.R. 2015) Court Description: MEMORANDUM OPINION. 15-05811, 2016 WL 3055901 (N.D. Cal. An "unfair or deceptive" trade practice includes a "false . 120. 12 U.S.C. DEMETRIUS ROBINSON and TAMARA ROBINSON, Plaintiffs, v. NATIONSTAR MORTGAGE LLC, Defendant. 2605(f)(2), "Rule 23 contains no suggestion that the necessity for individual damage determinations destroys commonality, typicality, or predominance, or otherwise forecloses class certification." Because there are, at a minimum, disputed issues of fact as to what fees, administrative costs, and interest constitute damages, the Court will deny the motion for summary judgment on the issue of actual damages. Northern District of Ohio, ohnd-1:2021-cv-00452 of 0 An error occurred while loading the PDF. A Division of NBC Universal. Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 344 (4th Cir. Order at 2, ECF No. See, e.g. P. 23(a)(2); Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). application to Nationstar after January 10, 2014, and through the date of the Court's . All but $28.6 million of its. Aug. 19, 2015). 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. Id. Finally, the Court finds that Mr. Robinson will adequately represent the absent class members. 2605(f)(1)(A); see 12 C.F.R. 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. If the initial application is complete, the substatus in Remedy Star is changed to refer the application to an underwriter for review, and an additional code is added in LSAMS. 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. P. 23(a)(1). Id. 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. 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. McLean II, 398 F. App'x at 471. . Id. Ass'n, No. Rules 19-303.4(b) (2018). 702. 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." Finally, while Nationstar presented arguments for why the Robinsons have not shown damages as to most of the asserted categories, it did not advance any argument for why the interest damages claimed by the Robinsons were not attributable to Nationstar's Regulation X violations and thus is not entitled to summary judgment on that issue. Wesleyan Coll. R. Evid. 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. 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. Under Count I, the Robinsons allege a violation of 12 C.F.R. 2601(a). Before the error was discovered, Mr. Robinson appealed this offer as insufficient on April 10, 2014. 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. 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. 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. These letters are based on standard Nationstar templates, and the code reflects the type of letter sent. at 151. Local R. 105.6. 1024.41(f), (g), and (h), and Md. 1993) (quoting Blum v. Yaretsky, 457 U.S. 991, 1001 n.13 (1982)). 1024.41(b)(2)(i)(B) and Md. Id. As for the claims of errors in Oliver's analysis, although this criticism is couched as his "misunderstanding the nature of Nationstar's various databases," Nationstar largely challenges Oliver's failure to use particular data fields, some which were never made available to him. 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. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). 1972). 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. . 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." 1024.41(f), (g), and (h); and (4) there is no evidence of actual damages from any RESPA violation. Part 1024). In Baez v. Specialized Loan Servicing, LLC, 709 F. App'x 979 (11th Cir. At the time, Nationstar had not completed the process of updating its systems to conform to those requirements. Id. 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. These rights and optionsand the deadlines to exercise themare explained further on the Frequently Asked Questions page of this website and in the Notice. Actual damages may also include "non-pecuniary damages, such as emotional distress and pain and suffering." Under subsections (f) and (g), a loan servicer is not permitted to begin foreclosure proceedings or move for foreclosure judgment if "a borrower submits a complete loss mitigation application" except in certain circumstances. In February 2014, after their income had further decreased, the Robinsons ceased making payments on the mortgage loan. Md. 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.