. Signed by Magistrate Judge Jillyn K Schulze on 9/9/2016 . 2010). The company has already paid about $57.5 million in restitution to affected consumers, according to the CFPB. Gariety v. Grant Thornton, LLP, 368 F.3d 356, 366 (4th Cir. 09-08213, 2011 WL 11651320 (C.D. See Stillmock, 385 F. App'x at 274 ("[T]here is no reasoned basis to conclude that the fact that an individual plaintiff can recover attorney's fees in addition to statutory damages of up to $1,000 will result in enforcement of [the Fair Credit Reporting Act] by individual actions of a scale comparable to the potential enforcement by way of class action."). Code Ann., Com. Reg. MCC JR 0003. Any additional updates will be posted here. In this photo illustration, the Nationstar Mortgage Holdings Inc. logo seen displayed on a smartphone. Notably, Oliver's analysis did not consider foreclosure information because the data produced did not include dates of foreclosure sales. 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). (quoting East Tex. . 1024.41(c)(1)(i). 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. 1024.41(f), (g), and (h) because there is no evidence in the record that Nationstar violated those provisions. at 983. Law 13-316(e)(1), and "actual damages," 12 U.S.C. These events will be represented by discrete data points in Nationstar's databases, such that these violations may be proved through that data. See Robinson v. Nationstar Mortg. 2d 452, 468 (D. Md. Filed by Janie Robinson. First, Nationstar correctly notes that Mr. Robinson, in his Motion, and Oliver, in his expert report, do not put forward any evidence establishing that the necessary prerequisites for a class action have been met with respect to the claim that Nationstar did not evaluate borrowers "for all loss mitigation options available to the borrower," in violation of 12 C.F.R. The Robinsons and Nationstar then engaged in a series of tortured exchanges over the next several months. 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. 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. A separate Order shall issue. 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. 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." 2605(f)(1)(A)). 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." Under Federal Rule of Civil Procedure 56(a), the Court grants summary judgment if the moving party demonstrates that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. ; 78 Fed. 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. Baez, 709 F. App'x at 983. See id. 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. 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. 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. Sep. 9, 2019). 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. Ask to speak in court about the fairness of the Settlement. Id. 1024.41(c)(1)(i)-(ii), (g). Code Ann., Com. Id. At least one court has found a similar expert report by Oliver to meet the Daubert standard. 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. 16-0307, 2017 WL 1167230, at *3 (E.D.N.C. See 12 C.F.R. Furthermore, Nationstar's argument that the Robinsons are not typical largely recycles the same arguments made in the Motion for Summary Judgment. Corp., 546 F.2d 530, 538-39 (3d Cir. More Information 1972). 2d at 1366. That provision provides, in parallel, that a loan servicer which does not comply with Regulation X is liable "to the borrower." An expert's testimony is "critical" where it is "important to an issue decisive for the motion for class certification." Code Ann., Com. Finally, the Court finds that Mr. Robinson will adequately represent the absent class members. Reg. 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. uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results." Summary judgment will therefore be entered for Nationstar on the claims that Nationstar violated subsections (f) and (g). McLean v. GMAC Mortg. Here, Mrs. Robinson signed the Deed but did not sign the Note. UNITED STATES DISTRICT COURT DISTRICT OF MARYLAND. Potentially eligible class members for all of these provisions can be identified through the LSAMS and Remedy data that marks that an application was received, identified as complete, and denied. 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. at *5. 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. The one-time consulting fee was paid in August 2013 to PaCE, a forensic loan auditor, to advise the Robinsons on how to communicate with Nationstar and to handle their loan. 12 U.S.C. Code Ann., Com. Sept. 29, 2017); Billings v. Seterus, Inc., 170 F. Supp. In Frank v. J.P. Morgan Chase Bank, N.A., No. The Court will address the varying claims in turn. Bouchat v. Balt. Nationstar asserts that Oliver's testimony should be stricken because this fee arrangement includes an unethical contingency fee. 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. Ballard v. Blue Shield of S.W. at 300. Id. 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. 222. Id. 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. DEMETRIUS ROBINSON and TAMARA ROBINSON, Plaintiffs, v. NATIONSTAR MORTGAGE LLC, Defendant. See Tagatz, 861 F.2d at 1042. 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. . 3d 249, 266 (D. Md. The fact that each borrower must individually show damages under 12 U.S.C. 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. 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." 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. Nationstar argues that summary judgment should be entered on the Robinsons' MCPA claim under section 13-316 because the Robinsons have not shown that they submitted a complaint or inquiry that triggers a duty to respond. J. at 983 (quoting 12 U.S.C. See Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 178 (1974) ("In determining the propriety of a class action, the question is not whether the plaintiff or plaintiffs have stated a cause of action or will prevail on the merits, but rather whether the requirements of Rule 23 are met."). In assessing this element, "numbers alone are not controlling" and a district court should consider "all of the circumstances of the case." 143. Mortgage servicers seek government aid as forebearance requests soar, How this 39-year-old earns $26,000 a year in California. Regulation X went into effect on January 10, 2014. . That is not so here. 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. Under the terms of the Settlement, if nothing else occurs in the litigation, then the Settlement will become effective 95 days from the date of that decision by the Court of Appeals. 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. v. Nationstar Mortgage LLC, Case No. 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. Others, however, have concluded that "all expenses, costs, fees, and injuries fairly attributable to" a servicer's RESPA violation are damages, "even if incurred before the" violation, because the "wrongful act . 2006). 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] . 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. Fed. An 85-year Harvard study found the No. or other representation . The Robinsons assert, and Nationstar does not argue otherwise, that litigation regarding Regulation X is not proceeding against Nationstar in another forum. Fla. 2009), aff'd, 398 F. App'x 467, 471 (11th Cir. Nationstar correctly notes that the Robinsons have not identified a false or misleading statement or representation by Nationstar in the record. See Tyson Foods v. Bouaphakeo, 136 S. Ct. 1036, 1045 (2016) ("When 'one or more of the central issues in the action are common to the class and can be said to predominate, the action may be considered proper under Rule 23(b)(3) even though other important matters will have to be tried separately, such as damages or some affirmative defense peculiar to some individual class members.'" 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). This argument runs contrary to the plain language of Nationstar's own procedures, which describe the application as "complete" based on the processor's determination, leading to the referral of the complete package to an underwriter. Amchem Prods. 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." Code Ann., Com. Id. Nationstar's criticism that Oliver failed to use the correct data field to identify the date when a loss mitigation application was complete, and failed to consider the timing of application relative to the date of scheduled foreclosure sale, ring hollow because Nationstar provided to Oliver only limited data fields, which did not contain clear field names or definitions. 1024.41(f), (g), and (h), and Mr. Robinson's MCPA claim under sections 13-301 and 13-303. . 1024.41(f), (g), and (h) and Md. 2001) (striking expert testimony because of a contingent fee arrangement), aff'd, 43 F. App'x 547 (4th Cir. Gym, Recreational & Athletic Equip. 3d 712, 728 (S.D. Once the documents are received, the Remedy Star substatus and LSAMS code are changed again to mark the application complete. And given that the class includes all borrowers who have submitted an application since January 10, 2014, joinder of all members is eminently impractical. 2010). On May 5, 2014, Nationstar asked the Robinsons for additional information to evaluate the appeal, including documents to verify their income. 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. The CFPB estimates about 40,000 borrowers were harmed by Nationstar's allegedly unfair and deceptive practices, according to a statement released Monday. Since the parties do not argue that the Nationwide Class and the Maryland Subclass differ for the purposes of the class certification analysis, the Court will analyze them together. If more documents are required, then the same Remedy Star substatus and LSAMS code that denote missing documents are entered. Compl. When Nationstar received the application, it prevented late fees from being assessed and put a hold on any foreclosure proceedings. at 300. In 2017, the CFPB fined Nationstar $1.75 million for failing to report accurate data about its mortgage transactions. 12 U.S.C. Instead, he analyzed certain data fields that were returned by the scripts written by a different expert. Courts have wide discretion to certify a class based on their familiarity with the issues and potential difficulties arising in class action litigation. 218. The Robinsons have not made any mortgage payments since January 2014 and have not been assessed any late fees since February 2014. 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. LLC, No. 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. See 12 C.F.R. at 248-49. 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. 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. P. 23(a)(3); Deiter v. Microsoft Corp., 436 F.3d 461, 466-67 (4th Cir. 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. Although similar to Rule 23(a)'s commonality requirement, the test for predominance under Rule 23(b)(3) is "far more demanding" and "tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation." If the named plaintiff satisfies each of these requirements under Rule 23(a), the Court must still find that the proposed class action fits into one of the categories of class action under Rule 23(b) in order to certify the class. Nationstar ultimately became the servicer of the Robinsons' loan. 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. 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. MSJ JR 0284. Cent. Code Ann., Com. 16-0117, 2017 WL 4347826, at *15 (D. Md. Tagatz v. Marquette Univ., 861 F.2d 1040, 1042 (7th Cir. 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. After March 2014, Mrs. Robinson was primarily responsible for communicating with Nationstar and PaCE. The Complaint asserts two claims. 2003). . Id. Nationstar's failings resulted in "substantial consumer harm," CFPB Director Kathleen Kraninger said in a statement. Nationstar has no process for standardizing file names. Portland, OR 97208-3560. 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. Law 13-316(c). RESPA's implementing regulations, codified at 12 C.F.R. See Stillmock v. Weis Markets, Inc., 385 F. App'x 267, 275 (4th Cir. 120. 2605(f)(1). Nationstar will need to enhance its policies and processes around how it handles consumer complaints, performs escrow analyses and conducts audits, for example. R. Civ. 1024.41(b)(1), (b)(2)(i)(B), and (c)(1)(ii) and Md. Eligible consumers will be contacted by Nationstar or the settlement administrator about refunds under the settlement. Md. 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. 1024.41(a). "When these issues were identified several years ago, we immediately made restitution to our impacted customers and invested in process improvements to prevent reoccurrence," Jay Bray, CEO and chairman of Mr. Cooper said in a statement Monday. In 2007, Mr. Robinson obtained a loan with the principal amount of $755,000 to refinance the property. . Rather than rendering the testimony inadmissible, the fee arrangement is relevant to the expert's credibility. 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. Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act ("Regulation X"), 78 Fed. . 1024.41(f), (g), and (h); and (4) there is no evidence of actual damages from any RESPA violation. Lembach v. Bierman, 528 F. App'x 297 (4th Cir. 3d 1011, 1015 (W.D. 3d 254, 274-75 (S.D.N.Y. at 358. If the application is complete "more than 37 days before a foreclosure sale," the servicer may not move for a foreclosure judgment or conduct a foreclosure sale, but instead must first "[e]valuate the borrower for all loss mitigation options available to the borrower," send to the borrower "a notice in writing stating the servicer's determination of which loss mitigation options, if any, it will offer," and include a statement of applicable appeal rights. When each event occurseither the mailing of a letter or the changing of a code or substatusthe date is recorded in the databases. Indeed, since previous versions of the Maryland rule expressly stated that contingency fee arrangements for experts were forbidden, but that explicit language was removed, it is reasonable to conclude that the amendment changed the rule in Maryland to no longer bar contingency fee arrangements. 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." 1 . 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. R. Civ. The Motion will be otherwise denied. 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. 125. Many impacted consumers have already received refunds and more will be contacted by the settlement administrator in the coming weeks. Since Mrs. Robinson may not bring a claim under Regulation X, she may not be a named class representative. The Motions are fully briefed, and no hearing is necessary to resolve the issues. Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 344 (4th Cir. 8:2014cv03667 - Document 18 (D. Md. Specifically, the application itself would have to be reviewed to determine when it was stamped as received by Nationstar. 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 Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349, 356-57 (3d Cir. Where the Robinsons, after discovery, cannot point to evidence that Nationstar did not even consider or evaluate the Robinsons for loss mitigation options, they have not established the existence of a genuine issue of material fact on the issue of false or misleading statements. Section 13-316(c) governs "mortgage servicing" and, among other requirements, provides that a "servicer shall designate a contact to whom mortgagors may direct complaints and inquiries" and that the "contact shall respond in writing to each written complaint or inquiry within 15 days if requested." Class Certif. But see Ayres v. Ocwen Loan Servicing, LLC, 129 F. Supp. See D. Md. During this period, in August 2013, the Robinsons retained a forensic loan auditor, Professional Compliance Examiners ("PaCE"), and paid it $2,275 to help them communicate with Nationstar. at 152. 2605(f)(1). 2605(f). Ass'n, 375 F.2d 648, 653 (4th Cir. Law 13-301 and 13-303, because the Robinsons do not have standing to bring those claims. Neither the rule nor the comment, however, state whether Maryland is one such jurisdiction. 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.
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