Co v. Adair, 764 F.3d 347, 359-60 (4th Cir. Two homeowners have filed suit against Nationstar Mortgage LLC, which does business as Mr. Cooper, after the mortgage servicer allegedly made several unauthorized electronic fund transfers from their account. Order, ECF No. 14-3667, 2015 WL 4994491, at *1-2 (D. Md. Joint Record ("MCC JR") 0907. In response, on May 30, 2014, Mr. Robinson sent Nationstar the exact same application that he had submitted on March 7, 2014. Nationstar Mortgage LLC Filing 18 Robinson et al v. Nationstar Mortgage LLC, No. The next day, Nationstar sent a letter noting that the August 25 application had been received and requesting additional information. Although Monday's case specifically addresses Nationstar's actions following the Great Recession, the outcome can affect today's homeowners, says Kwame Raoul, attorney general of Illinois. Law 13-316(e)(1), and "actual damages," 12 U.S.C. But see Ayres v. Ocwen Loan Servicing, LLC, 129 F. Supp. See, e.g., Ward v. Dixie Nat. Where such statements in no way promise approval, the Robinsons appear to claim that such statements are false or misleading because Nationstar never intended to, and did not, evaluate the Robinsons for the various loss mitigation options. 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. Signed by Judge Theodore D. Chuang on 8/18/2015. 1024.41(d). 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." 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. 1024.41(c)(1)(i). The use of a class action is primarily justified on the grounds of efficiency, because it advances judicial economy to resolve common issues affecting all class members in a single action. Compl. That's one reason why the settlement, particularly the provisions requiring Nationstar to adhere to enhanced standards, is crucial. In this photo illustration, the Nationstar Mortgage Holdings Inc. logo seen displayed on a smartphone. A Division of NBC Universal. In Baez v. Specialized Loan Servicing, LLC, 709 F. App'x 979 (11th Cir. 2d 754, 768-69 (D. Md. Nationstar further argues that summary judgment must be entered in its favor on the Robinsons' claims under 12 C.F.R. Summary judgment will therefore be entered for Nationstar on the claims that Nationstar violated subsections (f) and (g). 1024.41(d). "[A] trial court should consider the specific factors identified in Daubert where they are reasonable measures of the reliability of expert testimony." At this stage of the proceedings, the Court must rely on facts in the record, and not assertions in the pleadings. Following protracted litigation, Nationstar, and the Robinsonsnegotiated a $3,0 00,000 settlement. The Magistrate Judge ordered Nationstar to run those scripts and return the electronic data to the Robinsons. R. Civ. Nationstar sent Mr. Robinson two letters denying his loan modification application on July 17, 2014 and September 9, 2014, but there is no evidence in the record that the Robinsons submitted an appeal to either of those letters. State attorneys general are here for homeowners, Raoul adds. 2605(f)(1). An "unfair or deceptive" trade practice includes a "false . "); see also 1 William Rubenstein et al., Newberg on Class Actions 2:3 (5th ed. Pia McAdams, a class member, objected to the settlement, arguing that the A separate Order shall issue. "); cf. 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. The Robinsons and Nationstar then engaged in a series of tortured exchanges over the next several months. Make your practice more effective and efficient with Casetexts legal research suite. "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. (quoting East Tex. . While class members would not be eligible for statutory damages unless actual damages are shown, see 12 U.S.C. at 359-60. 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. Nationstar Mortgage Robocall Class Action Settlement Checks Mailed 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. Co, 445 F.3d 311, 318 (4th Cir. On November 21, 2014, the Robinsons filed suit against Nationstar on behalf of themselves and a class of similarly situated individuals nationwide. Thus, a loan servicer could not have complied with Regulation X for a loss mitigation application submitted before January 10, 2014 because there was no regulation in effect with which to comply. 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. Likewise, Oliver's expert report provides no analysis on how Nationstar's databases allow for a systematic determination whether Nationstar failed to inform borrowers of the specific reasons for the servicer's decision to deny each loan modification option, in violation of 12 C.F.R. Nationstar's reliance on Accrued Financial Services v. Prime Retail, Inc., 298 F.3d 291 (4th Cir. Rules Prof'l Conduct 3.4 cmt. 2010) (holding that a plaintiff who "was not a borrower or otherwise obligated on the . See id. Throughout discovery, Nationstar repeatedly stated that it could not produce the data on loss mitigation or loan modification applications from its databases in the form requested by the Robinsons. . 1024.41(h)(1), (4). 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. Thumbnails Document Outline Attachments Layers. 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. Because all of the Rule 23(a) and (b)(3) requirements are met as to a class asserting violations of 12 C.F.R. A Scheduling Order was first entered on November 24, 2015, and the period for discovery was extended four times between November 2015 and January 2017. Settlement. A code is entered in Remedy Star when the letter is sent. See id. Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403 (1977))). Notably, Oliver's analysis did not consider foreclosure information because the data produced did not include dates of foreclosure sales. 325 0 obj <>stream 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. at *5. Code Ann., Com. He asserted that the amount of fees was calculated based on Nationstar's statements, but he could not specify the nature of the fees. A conflict of interest will not defeat the adequacy requirement when "all class members share common objectives[,] the same factual and legal positions, and . Neither the rule nor the comment, however, state whether Maryland is one such jurisdiction. Thus, the nature of the proof of whether there has been a pattern or practice of RESPA violations provides substantial support for a finding of predominance. 2015) Court Description: MEMORANDUM OPINION. 2011) ("[T]he possibility that a well-defined class will nonetheless encompass some class members who have suffered no injury . Id. The defendant is accused of violating the Telephone Consumer Protection Act by robocalling consumers regarding a home loan. When considering whether expert testimony is reliable or should be excluded, the court considers the following factors: "When an expert's report or testimony is 'critical to class certification,'" the district court "must make a conclusive ruling on any challenge to that expert's qualifications or submissions before it may rule on a motion for class certification." However, Nationstar did not comply with all requirements of Regulation X, which became effective on January 10, 2014. While several district courts have concluded that loss mitigation applications submitted before Regulation X's effective date do not count as the single application for which a loan servicer must comply with Regulation X, see, e.g., Farber v. Brock & Scott, LLC, No. McLean v. GMAC Mortg. 218. Finally, a loan servicer "is only required to comply with the requirements" of section 1024.41 "for a single complete loss mitigation application for a borrower's mortgage loan account." Code Ann., Com. 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." 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"). As a result, on January 29, 2018, the Magistrate Judge granted the Robinsons' Motion to Compel in which the Robinsons had sought to have the Court order Nationstar to accept and run scripts created by the Robinsons' expert to extract the relevant data from Nationstar's databases on the sample of loans from which they could test their methodology for identifying members of the proposed classes. Law 13-316(c), which requires a response to a mortgage servicing complaint or inquiry within 15 days. MCC JR 530. During this time and up until September 25, 2017, Nationstar had not begun any foreclosure proceedings on the Robinsons' home. 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. 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. the same interest in establishing the liability of defendants." 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. 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. Indeed, Nationstar does not seriously contest the commonality prong. Marchese v. JPMorgan Chase Bank, N.A., 917 F. Supp. CFPB V. Nationstar - Home The Court may rely only on facts supported in the record, not simply assertions in the pleadings. 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. QSF Settlement Administrator. 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] . 2010) (considering consistency of results that provide finality to the defendant as favoring a finding of superiority). The fee arrangement will be considered as an issue potentially affecting the credibility, rather than the admissibility, of the expert testimony. In assessing this element, "numbers alone are not controlling" and a district court should consider "all of the circumstances of the case." At least one court has found a similar expert report by Oliver to meet the Daubert standard. 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. . (quoting 7AA Charles Allan Wright et al., Federal Practice and Procedure 1778 (3d ed. The Court will address the varying claims in turn. 12 C.F.R. LLC, No. 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. P. 23(a)(4); Ward v. Dixie Nat'l Life Ins. THEODORE D. CHUANG United States District Judge. The Robinsons complied. 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. MCC JR 318, 530-531. While Mrs. Robinson stated that she was conducting bookkeeping for Green Earth Services during the relevant time frame, she testified that her work was less than six hours per week, and the Robinsons have not shown that her time spent communicating with Nationstar "resulted in actual pecuniary loss" to Mr. Robinson or the business. 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. Nationstar ultimately became the servicer of the Robinsons' loan. 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. . See Johnson v. Ocwen Loan Servicing, 374 F. App'x 868, 873 (11th Cir. 15-05811, 2016 WL 3055901 (N.D. Cal. McLean II, 398 F. App'x at 471. Id. 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. While every class member will have to establish damages, that calculation will not be "particularly complex," as it will require identifying administrative costs and fees that would not have occurred but for the RESPA violation. 1987) (holding, in the context of an informant who is paid a contingent fee, that the fee should be treated "as a credibility factor"). USCA4 Appeal: 21-1087 Doc: 38 Filed: 06/15/2021 Pg: 9 of 33 Check out:Covid-19 pandemic is the first time 40% of Americans have experienced food insecurity, Don't miss:Amex Blue Cash Preferred is offering an elevated welcome bonus for a limited time, Get Make It newsletters delivered to your inbox, Learn more about the world of CNBC Make It, 2023 CNBC LLC. When those scripts did not produce data that allowed the Robinsons to conduct the sampling, the Magistrate Judge ordered Nationstar on April 3, 2018 to run certain "structural scripts" on two of its four databases. Once an underwriter is assigned, that employee double-checks whether the application contains all required documentation and is complete. Code Ann., Com. 3d 712, 728 (S.D. The distinction is crucial. See Tagatz, 861 F.2d at 1042. 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."). In its complaint, filed in federal district court in the District of Columbia, the Bureau alleges that Nationstar engaged in unfair and deceptive acts and practices in violation of the Consumer Financial Protection Act of 2010, violated the Real Estate Settlement Procedures Act (RESPA), and violated the Homeowner's Protection Act of 1998 (HPA). This website provides information about a joint state attorney general and state mortgage regulator settlement with Nationstar, which does business publicly as Mr. Cooper. Nationstar's failings resulted in "substantial consumer harm," CFPB Director Kathleen Kraninger said in a statement. 28, 2017). Accordingly, the Motion is denied as to such claims. Id. They have a home in Damascus, Maryland purchased by Demetrius Robinson ("Mr. Robinson"). 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. Id. After several customers of Green Earth Services canceled its services, the Robinsons sought loss mitigation in the form of a loan modification from Nationstar. 2d 452, 467 (D. Md. 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. 2010). Amchem Prods. 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. at 248-49. Nationstar Mortgage TCPA Class Action Settlement R. Civ. Actual damages may also include "non-pecuniary damages, such as emotional distress and pain and suffering." See supra parts I.B.1, I.B.3, I.C.1. Code Ann., Com. Id. 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. Ass'n, No. Nelson, 2017 WL 1167230, at *3 (collecting cases). See, e.g. Id. Nationstar has no process for standardizing file names. 1024.41(h)(1), (4). PDF PUBLISHED - United States Court of Appeals for the Fourth Circuit Class Action Rebates | June 2022 - Top Class Actions Finally, the Court finds that Mr. Robinson will adequately represent the absent class members. To prepare his expert report, Oliver reviewed a randomly selected sample of 400 loans serviced by Nationstar in which a loan modification application was submitted. McLean I, 595 F. Supp. RECITALS 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. 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. Nationstar claims that manual review of each file would take about 60 to 90 minutes per file. In Washington v. Am. To satisfy the numerosity requirement, the proposed class must be so numerous that "joinder of all members is impracticable." Settlement Pool $12,100,000 Settlement Website Nationstar Class Action Settlement Deadline 04/11/2016 Contact Wright et al. In Robinson v. Nationstar Mortgage LLC, 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. Nov. 12, 2011), the court held that a plaintiff who signed a deed of trust on a property and was a joint tenant with her son, but did not sign the promissory note, had constitutional standing to bring a RESPA claim because she stood to be injured if a default on her son's loan led to the loss of her equitable interest in the property. 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. 1024.41(c)(1)(i) and (d), because the Robinsons made no showing that the Rule 23 requirements were met. Mrs. Robinson was the primary point of contact for the Robinsons in interacting with Nationstar. 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 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. 89, 90, ECF No. (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"). 3d 249, 266 (D. Md. (kw2s, Deputy Clerk) Download PDF ORDER Scheduling Settlement Conference for Wednesday, October 26, 2016 at 10:30 a.m. Local R. 105.6. Proof of these claims requires a showing of the dates that an application was received, an acknowledgment letter was sent, an application became complete, Nationstar sent a decision letter to the borrower, and a foreclosure sale is scheduled. Am. As of November 22, about 2.8 million homeowners were in a forbearance plan, according to the latest research from the Mortgage Bankers Association. 09-08213, 2011 WL 11651320 (C.D. See 12 C.F.R. 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. 702. Robinson, 2015 WL 4994491, at *4 (citing Marchese v. JPMorgan Chase Bank, N.A., 917 F. Supp. 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. 16-0117, 2017 WL 4347826, at *15 (D. Md. Plaintiffs Demetrius and Tamara Robinson (the "Robinsons") have resided in a home in Damascus, Maryland that has been subject to a mortgage loan. 1024.41(b)(2)(i)(B) and Md. McLean v. GMAC Mortg. Id. Code Ann., Com. Id. . v. Nationstar Mortgage LLC Nationstar Call Settlement Administrator PO Box 3560 Portland, OR 97208-3560 877-683-9363 Class Counsel Rafey S. Balabanian EDELSON PC Defense Counsel Abraham J. Colman Raymond Y. Kim REED SMITH LLP On August 20, 2014, when Mrs. Robinson called to check on the status of the application, a Nationstar representative told her that the paperwork had gone to the wrong loss mitigation division and that the Robinsons needed to submit their application again. 1024.41(b)(2)(B). Finally, where Nationstar has offered no specific argument in its brief, beyond those addressed above, to refute Oliver's proffered analysis for identifying RESPA violations arising from the failure to notify borrowers of their appeal rights or the failure to exercise diligence in requesting documents based on repeated requests for the same documents, 12 C.F.R. 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. In addition to the fines and restitution, Delaware Attorney General Kathleen Jennings said the settlements require Nationstar to adhere to increased "servicing standards." Code Ann., Com. 2016) (dicta). 3d at 1014. 1024.41(f), (g), and (h), and Md. See Md. Law 13-301 and 13-303, and that Mr. Robinson therefore may not assert such claims on behalf of the class, Mr. Robinson's remaining claims and defenses are typical of the class members. 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. Relevant factual and procedural background is set forth in the Court's prior Memorandum Opinion granting in part and denying in part Nationstar's partial Motion to Dismiss. Through both a declaration by a Nationstar Vice President of Default Servicing, Brandon Anderson, and an expert report by Stuart D. Gurrea, Nationstar contests Oliver's analysis and endeavors to establish that the only way to identify RESPA violations using Nationstar's data is through a file-by-file review. 1024.41(f), (g), and (h) and Md. If the application is denied, a notice to that effect is sent to the borrower.
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