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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. Compl. 2004). If the Court approves the Settlement and it becomes final and effective, and you remain in the Settlement Class, you will receive a payment. Although she has worked as a bookkeeper for various companies, she was not employed between March and September 2014. Moreover, although the court stated that an arrangement for providing expert testimony for a contingent fee would violate public policy, the court did not address the question of the admissibility of evidence at issue here. 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. 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. 2006). 2003). 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. Code Ann., Com. USCA4 Appeal: 21-1087 Doc: 38 Filed: 06/15/2021 Pg: 9 of 33 See id. Because of the manner in which class discovery was conducted, see supra part II.A, Oliver did not have access to all of Nationstar's data fields for the representative sample of loans. 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"). Furthermore, Nationstar's argument that the Robinsons are not typical largely recycles the same arguments made in the Motion for Summary Judgment. Date: September 9, 2019, Civil Action No. 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. Nationstar Mortgage LLC v. Demetrius Robinson Wright et al. 2605(f)(2). The Robinsons assert, and Nationstar does not argue otherwise, that litigation regarding Regulation X is not proceeding against Nationstar in another forum. See, e.g., Linderman v. U.S. Bank Nat'l Ass'n, 887 F.3d 319, 321 (7th Cir. See supra parts I.B.1, I.B.3, I.C.1. 877-683-9363. Nationstar denies all allegations of wrongdoing and no judgment or determination of wrongdoing has been made. This field is for validation purposes and should be left unchanged. 1024.41(d). See Krakauer v. Dish Network, L.L.C., 925 F.3d 643, 658 (4th Cir. 17-0982, 2018 WL 4111938, at *5-6 (M.D. 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. 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. CFPB Takes Action Against Nationstar Mortgage for Flawed Mortgage Loan In addition to the fines and restitution, Delaware Attorney General Kathleen Jennings said the settlements require Nationstar to adhere to increased "servicing standards." 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. 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. 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. 89, 90, ECF No. On July 16, 2018, the Court affirmed the Magistrate Judge's ruling and required Nationstar to produce all outstanding "records subject to discovery orders." 2010) (considering consistency of results that provide finality to the defendant as favoring a finding of superiority). JA 130. 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. In contrast, the Court finds that there is a genuine issue of material fact whether the administrative costs and fees incurred by the Robinsons resulted from Nationstar's RESPA violations. 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. 2d at 1366. It follows that only borrowers may bring a claim that a loan servicer has violated Regulation X. 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. 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. cause[d] damages retroactively" and "transmogrifie[d]" the costs that predate the RESPA violation into damages. 26-1. 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. 1024.41(c)(1)(i). 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. Eligible consumers will be contacted by Nationstar or the settlement administrator about refunds under the settlement. Ohio 2014). The Federal Rules of Evidence do not prohibit these kinds of arrangements. Stewart v. Bierman, 859 F. Supp. Nationstar Mortgage Convenience Fee Class Action Settlement These fees allegedly violated the Fair Debt Collection Practices Act and the Washington state Collection Agency Act. 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. 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. In this photo illustration, the Nationstar Mortgage Holdings Inc. logo seen displayed on a smartphone. 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."). Day to address discovery issues. Regulation X went into effect on January 10, 2014. Because such information is stored electronically and based on objective criteria, the members of the class will be ascertainable without significant administrative burden. This assertion mischaracterizes the burden of proof in a civil case. 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. Nationstar asserts that Oliver's testimony should be stricken because this fee arrangement includes an unethical contingency fee. Code Ann., Com. After an additional period of expert discovery relating to the class certification motion, discovery closed on December 30, 2018. 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. Here, the Robinsons have not put forward any evidence that Mrs. Robinson has an ownership interest in the home that would specifically obligate her to make payments on the loan. Law 13-301(1). Robinson v. Nationstar Mortg. LLC, Civil Action No. TDC-14-3667 Law 13-316(c), the Court will grant class certification as to those class members and claims. 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] . To satisfy the numerosity requirement, the proposed class must be so numerous that "joinder of all members is impracticable." Anderson, 477 U.S. at 248. 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. In February 2014, after their income had further decreased, the Robinsons ceased making payments on the mortgage loan. Likewise, he concluded that for approximately 53 percent of sampled loans, Nationstar failed to comply with the requirement of acknowledging receipt of the application within five days. 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. See 12 C.F.R. He is joined by 49 other Attorneys General, the District of Columbia, and other state and federal agencies. They do not seek damages in the Amended Complaint for emotional distress or include such a claim in their itemized list of damages submitted in discovery. "We want to hear from you," Raoul says. See Lierboe v. State Farm Mut. 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. The Robinsons do not address this argument in their Opposition. 2014). 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. Notably, although a borrower may recover up to $2,000 in statutory damages upon a showing of a "pattern or practice of non-compliance with the requirements" of Regulation X, 12 U.S.C. Id. See D. Md. Deiter, 436 F.3d at 466-67. at 983 (quoting 12 U.S.C. 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." Corp., 546 F.2d 530, 538-39 (3d Cir. See id. 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. 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. See Johnson v. Ocwen Loan Servicing, 374 F. App'x 868, 873 (11th Cir. Code Ann., Com. 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." R. Evid. Whether an application is complete depends on the requirements of the investor who holds the loan. 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). ORDER Scheduling Settlement Conference for Wednesday, October 26, 2016 at 10:30 a.m. Since Regulation X explicitly does not require a loan servicer to provide a loan modification, the Robinsons' claim that they suffered damages because they did not receive a loan modification is not cognizable under the statute. In addition, Nationstar asserts that not all loan modification applications referred to an underwriter are complete. Fed. 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. For the requirements that hinge on the timing of a communication or response, Oliver's methodology consists of using Nationstar's data from the LSAMS and FileNet software applications relating to a sample of 400 loans to identify the dates when certain events occurredsuch as the filing of a loan modification application, when a loan modification application became complete, and the sending of an acknowledgment or decision letter to a borrowerand then counting the days between the dates to assess whether a RESPA timing requirement was satisfied. Like the class members, to prove his case, Mr. Robinson will have to show that Nationstar failed to timely and appropriately respond to his loan modification applications by pointing to the dates of his submissions and the dates and contents of Nationstar's responses. Co, 445 F.3d 311, 318 (4th Cir. 2d 873, 883 (D. Md. EQT Prod. See, e.g., Ward v. Dixie Nat. Aug. 19, 2015). Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 344 (4th Cir. See 12 C.F.R. The Court may rely only on facts supported in the record, not simply assertions in the pleadings. 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. This abandoned high school was converted into a 31-unit apartment building, number of unlawful practices in handling mortgages following the Great Recession. 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. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). McLean v. GMAC Mortg. 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." The CFPB estimates about 40,000 borrowers were harmed by Nationstar's allegedly unfair and deceptive practices, according to a statement released Monday. 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. 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. The Robinsons' designated expert, Geoffrey Oliver, has offered a methodology for identifying class members and when their rights under RESPA and the MCPA have been violated. In approving such a modification, Nationstar made a mistake: the underwriter working on the Robinsons' loan had erroneously double-counted their income. Nationstar to Pay $110 Million to Settle Borrower Claims On March 8, 2014, Nationstar sent to Mr. Robinson a letter stating that he was ineligible for a HAMP modification, but on March 15, 2014, it sent a different letter offering a loan modification under which Mr. Robinson would receive a reduced interest rate for two years. P. 23(a)(3); Deiter v. Microsoft Corp., 436 F.3d 461, 466-67 (4th Cir. The Class Action Administrator would then begin distribution of the settlement funds. Cent. Law 13-301 and 303. Id. Thus, Mrs. Robinson is not "obligated" to pay the amount due on the Note and therefore is not a "borrower" for purposes of RESPA. Nationstar argues that summary judgment should be granted against Mrs. Robinson because she is not a "borrower" within the meaning of RESPA. 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. PDF Motion for Fees - Robinson v Nationstar - Home See Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349, 356-57 (3d Cir. Fed. Part 1024). 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(i). Specifically, the application itself would have to be reviewed to determine when it was stamped as received by Nationstar. 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. Plaintiffs Demetrius and Tamara Robinson (the "Robinsons") have resided in a home in Damascus, Maryland that has been subject to a mortgage loan. 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." 1976). Rule 702 permits an expert to testify if the testimony "will help the trier of fact to understand the evidence or to determine a fact in issue," "is based on sufficient facts or data," and "is the product of reliable principles and methods," and if the expert has "reliably applied the principles and methods to the facts of the case." 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. 1024.41(f), (g), and (h), and Mr. Robinson's MCPA claim under sections 13-301 and 13-303. 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. 3d 254, 274-75 (S.D.N.Y. Mr. Robinson then submitted another loan modification application on August 25, 2014. However, Nationstar did not comply with all requirements of Regulation X, which became effective on January 10, 2014. Nationstar Mortgage Robocall Class Action Settlement Checks Mailed 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. 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. 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. The fee arrangement will be considered as an issue potentially affecting the credibility, rather than the admissibility, of the expert testimony. Where the PaCE consulting fee was a one-time fee to advise the Robinsons in their interactions with Nationstar paid in August 2013, several months before they first submitted the March 2014 loan modification application, this cost was incurred "whether or not [Nationstar] complied with its obligations." On May 5, 2014, Nationstar asked the Robinsons for additional information to evaluate the appeal, including documents to verify their income. Courts have wide discretion to certify a class based on their familiarity with the issues and potential difficulties arising in class action litigation. Id. On June 16, 2017, the Magistrate Judge bifurcated discovery to focus initially on the merits of the Robinsons' individual claim and the question of class certification, ordered Nationstar to disclose electronic records so that the Robinsons could sample Nationstar's data for purposes of a motion for class certification, and limited the discovery of such records to a sample of 400 loans from the period from January 10, 2014 to June 30, 2014 and "to areas which inform" the Court's decision on class certification, namely whether Nationstar was in compliance with Regulation X. Mot. The Robinsons and Nationstar then engaged in a series of tortured exchanges over the next several months. McAdams v. Nationstar Mortg. Nationstar's Motion for Summary Judgment will be granted as to Tamara Robinson. Rules Prof'l Conduct 3.4 cmt. at 358. From January 2014 to the present, the Robinsons have not pursued other loss mitigation options, such as a short sale. 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. 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. Compl. Many impacted consumers have already received refunds and more will be contacted by the settlement administrator in the coming weeks. Therefore, Nationstar was required to comply with section 1024.41 in processing it. Florida Appeals Court Reverses Mortgage Foreclosure - Pike & Lustig, LLP 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. That claim will be subject to common proof, namely sampling and analysis of loan files along the lines suggested by Oliver. The trial court granted the motion over the Robinsons' objection, noting in its order that Nationstar had now waived its claim for attorney feesthe claim that had been the sole impediment to a final judgment being entered after the trial court granted Nationstar's request to reopen the evidence after entry of the initial final judgment. MSJ JR 0284. Id 1024.41(c)(1). If the application is denied, a notice to that effect is sent to the borrower. 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. 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. Since the Court already considered and ruled on these issues, see supra part I.B, it will not revisit those arguments here. 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. Amchem Prods. Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. Once an underwriter is assigned, that employee double-checks whether the application contains all required documentation and is complete. 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. The fact that each borrower must individually show damages under 12 U.S.C. Johnson, 374 F. App'x at 873; Keen v. Ocwen Loan Servicing, LLC, No. The Robinsons assert that they have paid a total of $6,147.12 in unspecified fees to Nationstar. See 12 C.F.R. You will not receive a payment if you fail to timely submit a completed Claim Form, and you will give up your right to bring your own lawsuit against the Defendant about the claims in this case. For example, it was undisputed that on May 30, 2014, Mr. Robinson, in response to Nationstar's requests for additional information, resubmitted the same information sent with his March 2014 loan modification application. 12 U.S.C. 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. is generally unproblematic as the non-injured parties can just be sorted out at the remedies phase of the suit."). at *5. 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.