That is not so here. Nationstar ultimately became the servicer of the Robinsons' loan. The Court does not find such a prohibition in the Maryland Attorneys' Rules of Professional Conduct. After this missed payment, Nationstar assessed a late fee. "); see also 1 William Rubenstein et al., Newberg on Class Actions 2:3 (5th ed. Code Ann., Com. See Fed. Gunnells, 348 F.3d at 429 ("[T]he need for individualized proof of damages alone will not defeat class certification."). 2004). 1024.41(i). See 12 C.F.R. "); cf. v. Nationstar Mortgage LLC Nationstar Call Settlement Administrator PO Box 3560 Rather than striking the testimony, the Court may need to consider permitting supplemental discovery to correct for the lack of relevant data not previously made available to Oliver. Joint Record ("MCC JR") 0907. See Torres v. Mercer Canyons Inc., 835 F.3d 1125, 1137 (9th Cir. The Complaint asserts two claims. These claims do not have to be factually or legally identical, but the class claims should be fairly encompassed by those of the named plaintiffs. 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." 1024.41(b)(1), which requires reasonable diligence in obtaining documents and information to complete a loss mitigation application; and Md. 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. Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 344 (4th Cir. 2002), is misplaced. After several customers of Green Earth Services canceled its services, the Robinsons sought loss mitigation in the form of a loan modification from Nationstar. Amchem Prods. As the Supreme Court noted in Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999), Daubert "made clear that its list of factors was meant to be helpful, not definitive," and it is not always the case that an expert witness's claim will have been subjected to peer review. Regulation X, which became effective on January 10, 2014, 78 Fed. 1024.41(c)(1)(i). 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"). Moreover, Nationstar cites no authority for the proposition that a loss mitigation application would not be deemed "complete" for purposes of RESPA upon such a formal designation, and any rule that would deem such an application incomplete in the event that an underwriter subsequently decided to ask for additional material would be entirely unworkable. 2013). 2013)). 2015) Court Description: MEMORANDUM OPINION. Local R. 105.6. . In December 2020, Nationstar (d/b/a Mr. Cooper) reached a settlement with the CFPB, the State Attorneys General, and certain state mortgage regulators to resolve old regulatory matters. 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. (quoting 7AA Charles Allan Wright et al., Federal Practice and Procedure 1778 (3d ed. Since the Court already considered and ruled on these issues, see supra part I.B, it will not revisit those arguments here. TDC-14-3667 (D. Md. Feb. 14, 2017) (holding that the plaintiff sufficiently pleaded damages under the MCPA where she alleged that the defendant's failures to respond "resulted in the continual assessment of accruing interest, fees and costs on the mortgage account," as well as "stress, physical sickness, headaches, sleep deprivation, worry, and pecuniary expenses"). 12 U.S.C. Nationstar broke that trust by engaging in unfair and deceptive practices," Kraninger added. See, e.g. Docket for Robinson v. Nationstar Mortgage LLC, 8:14-cv-03667 Brought to you by the RECAP Initiative and Free Law Project, a non-profit dedicated to creating high quality open legal information. While she is trained as a bookkeeper, at the time of the Robinsons' 2014 application for a loan modification and in the subsequent months, Mrs. Robinson was not employed in any capacity. 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. Indeed, Nationstar does not seriously contest the commonality prong. 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. 12 C.F.R. Joint Record ("MSJ JR") 0102. Years later, the parties filed a notice of settlement. 2605(f)(2) is not fatal to the predominance inquiry. Nationstar further argues that the Robinsons cannot show that they suffered economic damages as a result of the violation of section 13-316. Nationstar also allegedly foreclosed on borrowers with pending forbearance applications after promising not to do so and failed to properly handle escrow payments and accounting for homeowners who were in Chapter 13 bankruptcy proceedings. Plaintiffs Demetrius and Tamara Robinson (the "Robinsons") have resided in a home in Damascus, Maryland that has been subject to a mortgage loan. If the settlements are approved by the D.C. district court, Nationstar will be required to immediately set aside about $15.6 million to pay borrowers it has not yet remediated. Code Ann., Com. 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). To calculate damages, Oliver stated that he would look to data from the LSAMS application, including data tables that contain fee information, to identify fees that would not have been charged but for Nationstar's various RESPA violations, but that he was not able to evaluate this data in his report because it had not been provided to him. There is no reason to conclude that individual class members have any particular interest in individually controlling the litigation through separate actions, or that this Court is an undesirable forum to host this litigation, since Nationstar services loans in this district, is subject to jurisdiction here, and has presented no argument that Maryland is an inconvenient forum. Instead, he analyzed certain data fields that were returned by the scripts written by a different expert. Following protracted litigation, Nationstar, and the Robinsonsnegotiated a $3,0 00,000 settlement. 10696, 10836. at 983. Id. Nationstar admits that in March 2014, two months after the implementation date of Regulation X, it had not yet updated its systems to comply with the regulation. 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. See, e.g., Linderman v. U.S. Bank Nat'l Ass'n, 887 F.3d 319, 321 (7th Cir. J. Fla. 2009), aff'd, 398 F. App'x 467, 471 (11th Cir. 1024.41(i). MSJ JR 0284. Id. According to Oliver, if he used incorrect data, that was a result of the limited data fields and definitions provided to him. Ass'n, 375 F.2d 648, 653 (4th Cir. 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. Life Ins. "Mortgage servicers are entrusted with handling significant financial transactions for millions of Americans, including struggling homeowners. . 1024.41(i). Updates will also be available at the toll-free number: 1-866-404-0137. . And given that the class includes all borrowers who have submitted an application since January 10, 2014, joinder of all members is eminently impractical. The Robinsons' Motion for Class Certification will be GRANTED IN PART and DENIED IN PART. Rules 19-303.4(b) (2018). The Court agrees that costs, including administrative costs, "incurred whether or not the servicer complied with its obligations" are not actual damages "caused by, or 'a result of,'" the RESPA violation, whether or not they occurred before or after the violation. 2605(f)(1). Id. Once an underwriter is assigned, that employee double-checks whether the application contains all required documentation and is complete. Marais v. Chase Home Fin., LLC, 24 F. Supp. Id. See 12 C.F.R. A class action may be maintained under Rule 23(b)(3) if common questions of law or fact "predominate over any questions affecting only individual members" and a "class action is superior to other available methods for fairly and efficiently adjudicating the controversy." While Demetrius Robinson did appeal Nationstar's March 15, 2014 offer of an in-house modification, the requirements of subsection (h) were not triggered because the offer was not a denial of a loan modification application. Thus, based on his report and experience, Oliver concludes that Nationstar "failed to comply" with Regulation X and that it is possible to "identify violations" of Regulation X "using the methodologies" he described, without the necessity of a file-by-file review. 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. 12 U.S.C. 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. Sept. 2, 2015). P. 23(a)(2); Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). If a class is ascertainable, it must then satisfy all four elements of Rule 23(a): numerosity, commonality, typicality, and adequacy. This assertion mischaracterizes the burden of proof in a civil case. In addition, Nationstar asserts that not all loan modification applications referred to an underwriter are complete. Based on his experience and review of deposition transcripts of Nationstar employees, Oliver asserts that Nationstar has computerized data from which RESPA violations may be identified, not least because Nationstar must be able to demonstrate its compliance with RESPA to regulators. Courts have wide discretion to certify a class based on their familiarity with the issues and potential difficulties arising in class action litigation. 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. 2d 452, 468 (D. Md. Corp., 546 F.2d 530, 538-39 (3d Cir. QSF Settlement Administrator. at 151. Under subsection (h), if a loan servicer receives a complete loss mitigation application more than 90 days before a foreclosure sale but then denies the application, the servicer must allow the borrower to appeal and must respond to the appeal within 30 days of receiving it. The Court will address the varying claims in turn. Id. 2014). Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. 12 C.F.R. 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. In assessing this element, "numbers alone are not controlling" and a district court should consider "all of the circumstances of the case." 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. 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. A borrower may enforce violations of these provisions through a private cause of action pursuant to 12 U.S.C. Here, even though the Robinsons' March 7, 2014 loss mitigation application was not the Robinsons' first such application, it was their first submitted after the effective date of Regulation X. 2014))). Id. Law 13-316(c). 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. . MCC JR 530. 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." Date: September 9, 2019, Civil Action No. Summ. 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 Although Nationstar argues that Mr. Robinson has a conflict of interest because he wishes to avoid foreclosure and to delay payments on his mortgage, the record does not reflect that proposition. These events will be represented by discrete data points in Nationstar's databases, such that these violations may be proved through that data. 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. 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." McLean v. GMAC Mortg. 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. The Robinsons assert that they have suffered damages in the lost opportunity to have their mortgage loan modified and to pursue other loss mitigation options; in the fees, late fees, and interest that Nationstar has assessed since they became delinquent on their loan; in the lost "time and effort" which they expended in "pursuing the loss mitigation process with Nationstar" rather than trying to improve their business; and in administrative costs, including "postage, travel expenses, photocopying, scanning, and facsimile expenses." 1024.41(c)(1)(i) and (d), because the Robinsons made no showing that the Rule 23 requirements were met. 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. When each event occurseither the mailing of a letter or the changing of a code or substatusthe date is recorded in the databases. 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. Day to address discovery issues. In this photo illustration, the Nationstar Mortgage Holdings Inc. logo seen displayed on a smartphone. 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. A class action allows representative parties to prosecute not only their own claims, but also the claims of other individuals which present similar issues. See supra parts I.B.1, I.B.3, I.C.1. How do I get my check reissued? 2018); Renfroe v. Nationstar Mortg., LLC, 822 F.3d 1241, 1247 n.4 (11th Cir. Call Us Today (202) 973-0900Your Call is Confidential. Northern District of Ohio, ohnd-1:2021-cv-00452. Nationstar's Motion for Summary Judgment will be granted as to Tamara Robinson. Id. Id. or misleading oral or written statement . 2011) ("[T]he possibility that a well-defined class will nonetheless encompass some class members who have suffered no injury . MCC JR 318, 530-531. Co, 445 F.3d 311, 318 (4th Cir. They have claimed $141,000 in interest; $6,147.12 in fees assessed by Nationstar; $2,275 in consulting fees; $50.58 in administrative costs; and lost time and labor of approximately 120 hours; as well as punitive and statutory damages. See Johnson v. Ocwen Loan Servicing, 374 F. App'x 868, 873 (11th Cir. 2605(f)(1)(A)). Compl. 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. Nationstar argues that summary judgment should be granted against Mrs. Robinson because she is not a "borrower" within the meaning of RESPA. 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. Accordingly, Nationstar's Motion for Summary Judgment will be granted as to the MCPA claims under sections 13-301 and 13-303. 17-0982, 2018 WL 4111938, at *5-6 (M.D. DEMETRIUS ROBINSON and TAMARA ROBINSON, Plaintiffs, v. NATIONSTAR MORTGAGE LLC, Defendant. At a minimum, the question of when a loss mitigation application is "complete" under RESPA within the workflow of Nationstarwhether at the time of the processor's designation of the file as complete or at a later stageis a significant unresolved question of law and fact that would be common to all RESPA claims against Nationstar. The Court will not revisit this determination. Sep. 9, 2019). On August 26, 2014, Nationstar mailed another letter acknowledging Previous. Certification will also be denied as to the claim under 12 C.F.R. "Since then, we have continued to invest in technology, people, and leadership to ensure that our compliance and risk management programs not only meet our regulators' expectations but also support sustainable growth and maintain our position as an industry leader.". 164. 3d 1011, 1015 (W.D. Nelson, 2017 WL 1167230, at *3 (collecting cases). McLean I, 595 F. Supp. 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. 2601-2617 (2012), specifically RESPA's implementing regulations known as "Regulation X," 12 C.F.R. This Court previously held that a loan modification application can be an inquiry under the MCPA that triggers a duty to respond, and that in the case of the Robinsons, the loan modification application that was "submitted at the request of Nationstar[] necessarily seeks a response." Id. Nationstar correctly notes that the Robinsons have not identified a false or misleading statement or representation by Nationstar in the record. cause[d] damages retroactively" and "transmogrifie[d]" the costs that predate the RESPA violation into damages. Stewart v. Bierman, 859 F. Supp. It follows that only borrowers may bring a claim that a loan servicer has violated Regulation X. The Robinsons allege that Nationstar has assessed $256 per month in late fees, interest, and other fees due to the delinquency, and that they have spent considerable time and effort pursuing the loss mitigation process, time which they otherwise would have devoted to their struggling small business. Baez, 709 F. App'x at 983. The data derived from scripts written by another expert, Abraham J. Wyner, without the benefit of seeing the databases, a process necessitated by Nationstar's unwillingness or inability to produce the relevant data. P. 23(a)(3); Deiter v. Microsoft Corp., 436 F.3d 461, 466-67 (4th Cir. Id. Summary judgment will therefore be entered for Nationstar on the claims that Nationstar violated subsections (f) and (g). 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." Code Ann., Com. 12 U.S.C. Every mortgage has a unique loan number that can be used to identify the borrower and the loan in each of the four databases. Tenn. Aug. 28, 2018) (holding that a spouse who signed a deed of trust stating that a person who did not sign the promissory note was not obligated on the security instrument, but did not sign the promissory note, was not a borrower under RESPA). at 152. 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. 1024.41(a). 1024.41 (2019), and the Maryland Consumer Protection Act ("MCPA"), Md. Since Mr. Robinson has the same goal as the other class members of establishing that Nationstar violated Regulation X with respect to his loan, he will adequately protect their interests. 2010). Eligible claimants will receive either $5 for a qualifying 600- watt model, $7 for a qualifying 900- watt model, or a $10 or $15 discount code for a new 600-watt or 900-watt blender, respectively. 1024.41(b)(1). Claimants will receive their payments via check. Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 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. 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. 15-3960, 2017 WL 623465, at *8 (D. Md. Va., Inc., 543 F.2d 1075, 1080 (4th Cir. 12 U.S.C. Where the cost of litigation as compared to the potential recovery gives class members little incentive to bring suit, and there is little reason to individually control the litigation, a class action is a superior method to vindicate the rights of class members. or other representation . Cent. . Nationstar has no process for standardizing file names. 2010). R. Civ. A "borrower" may enforce the provisions of Regulation X pursuant to 12 U.S.C. Law 13-301(1). 12 U.S.C. 1024.41(f), (g), and (h) and Md. After March 2014, Mrs. Robinson was primarily responsible for communicating with Nationstar and PaCE. StubHub, Apple, other class action settlement checks in the mail Old Navy, Nissan, Equifax, other class action settlement payments in the mail Postmates, 1-800 Contacts, other settlement checks on the way Id. 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. Ass'n, No. As a result, the Robinsons' claim that Nationstar violated certain Regulation X procedures with respect to their loan modification application and those of the class members. For the claims that rely on the timing of a response, Oliver and the Robinsons propose using changes in the Remedy Star substatus or LSAMS codes and documents stored in FileNet to identify the date a loan modification application was received or marked as complete, to identify the date a response was sent, and to count the number of days between events. 2016) ("[F]ortuitous non-injury to a subset of class members does not necessarily defeat certification of the entire class, particularly as the district court is well situated to winnow out those non-injured members at the damages phase of the litigation, or to refine the class definition. 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. 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.
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