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. 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. See id. Plaintiffs "must present specific evidence to establish a causal link between the [servicer's] violation and their injuries." It is the plaintiffs who bear the burden of proving their claims. Because all of the Rule 23(a) and (b)(3) requirements are met as to a class asserting violations of 12 C.F.R. Robinson v. Nationstar Mortgage, LLC - Justia Dockets & Filings 2601 et seq. In addition to the fines and restitution, Delaware Attorney General Kathleen Jennings said the settlements require Nationstar to adhere to increased "servicing standards." 1988) (distinguishing between a rule of professional conduct and admissibility of evidence); cf. 12 C.F.R. LLCNo. 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. In Baez v. Specialized Loan Servicing, LLC, 709 F. App'x 979 (11th Cir. These events will be represented by discrete data points in Nationstar's databases, such that these violations may be proved through that data. 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. That claim will be subject to common proof, namely sampling and analysis of loan files along the lines suggested by Oliver. The Robinsons appealed the Magistrate Judge's ruling because it did not require Nationstar to run a structural script for a third database. 2013). 17-0982, 2018 WL 4111938, at *5-6 (M.D. 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."). Id 1024.41(c)(1). Mot. But see Sutton v. CitiMortgage, Inc., 228 F. Supp. Nationstar Mortgage Convenience Fee Class Action Settlement The record is undisputed that as of September 25, 2017, Nationstar had neither started foreclosure proceedings nor moved for foreclosure judgment on the Robinsons' home. McLean I, 595 F. Supp. Code Ann., Com. In February 2014, after their income had further decreased, the Robinsons ceased making payments on the mortgage loan. 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. For purposes of ascertainability, the requirements of 12 C.F.R. 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. 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. 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). 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. 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. . 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. See Lierboe v. State Farm Mut. Id. 2605(f)(2). Oliver is the Chief Executive Officer of Hilltop Advisors LLC, a financial services consulting, compliance audit, and accounting advisory firm, and has extensive experience conducting compliance reviews for mortgage servicers, including for compliance with loss mitigation procedures. Accordingly, Nationstar's Motion for Summary Judgment will be granted as to the MCPA claims under sections 13-301 and 13-303. It will be otherwise denied. 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. 1024.41(a). Therefore, the Court will grant in part and deny in part the Motion for Class Certification. On February 10, 2022, the Court of Appeals issued a decision affirming the Final Approval Order. Actual damages may include late fees; denial of credit or access to the full amount of a credit line; out-of-pocket expenses incurred in dealing with a RESPA violation, such as expenses for preparing and copying correspondence; and lost time and inconvenience, including time spent away from employment while preparing correspondence "to the extent it resulted in actual pecuniary loss." Nationstar further argues that the Robinsons cannot show that they suffered economic damages as a result of the violation of section 13-316. Sept. 2, 2015). Anderson, 477 U.S. at 248. 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. The settlement in the form of a consent judgment, filed in the U . Sept. 29, 2017); Billings v. Seterus, Inc., 170 F. Supp. 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. TDC-14-3667 (D. Md. . Local R. 105.6. Corp., 546 F.2d 530, 538-39 (3d Cir. 2605(f). Bouchat, 346 F.3d at 522. Nationstar also asserts that the Robinsons have not identified evidence sufficient to support their MCPA claims. 89, 90, ECF No. v. DEMETRIUS ROBINSON; TAMARA ROBINSON, Plaintiffs - Appellees, v. . Ins. 1024.41(c)(1)(ii), which requires a servicer to respond to a completed loan modification application; or Md. 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. 1024.41(i). 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. 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. Gariety v. Grant Thornton, LLP, 368 F.3d 356, 366 (4th Cir. Home [robinsonsettlement.com] 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. 1024.41(a). . 2d 754, 768-69 (D. Md. Law 13-316(c). 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. Ward, 595 F.3d at 180 (quoting Gunnells, 348 F.3d at 430). In addition to the fee paid to PaCE, the Robinsons also assert as damages $50.58 in administrative costs, specifically postage fees for sending information relating to their loan modification application to Nationstar, and 120 hours of time expended on the loan modification process. 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." MCC JR 0003. CFPB Director Kathleen Kraninger said in a statement. 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. that it is improper to pay an expert witness a contingent fee." 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. Although based on imperfect data, Oliver's expert report reveals that such analysis can substantially address whether Nationstar violated 12 C.F.R. When combined with the state settlements, Nationstar is on the hook to pay a total of $91 million overall: $85 million to harmed consumers and $6 million in civil penalties. 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." Law 13-301(1). 1024.41(c)(1)(i) and (d), because the Robinsons made no showing that the Rule 23 requirements were met. Robinson v. Nationstar Mortg. LLC, Civil Action No. TDC-14-3667 R. Evid. On May 5, 2014, Nationstar asked the Robinsons for additional information to evaluate the appeal, including documents to verify their income. A fact is "material" if it "might affect the outcome of the suit under the governing law." at 300. 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. 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 relevant rule prohibits an attorney from "offer[ing] an inducement to a witness that is prohibited by law." R. Evid. 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. 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. On November 21, 2014, the Robinsons filed suit against Nationstar on behalf of themselves and a class of similarly situated individuals nationwide. Summ. 1024.41(f), (g), and (h), and Md. R. Civ. 2006). Id. 1024.41(f), (g), and (h); and (4) there is no evidence of actual damages from any RESPA violation. Id. Reg. 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. 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. P. 23(a)(1). 2015) Court Description: MEMORANDUM OPINION. Finally, to the extent that Oliver did not execute his stated methodology for identifying damages, that limitation is again based in part on Nationstar's failure to make relevant data available to him. Wright et al. 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. 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"). 2005))). However, if the costs are shown to have been incurred in response to the RESPA violation, the Court finds that they would be actual damages within the meaning of 12 U.S.C. 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. See Broussard, 155 F.3d at 344. 222. Johnson, 374 F. App'x at 873; Keen v. Ocwen Loan Servicing, LLC, No. Reg. The first of these prerequisites is that the class must exist and be "readily identifiable" or "ascertainable" by the court through "objective criteria." Gym, Recreational & Athletic Equip. 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. It follows that only borrowers may bring a claim that a loan servicer has violated Regulation X. More Information 12 U.S.C. Law 13-316(c) are triggered upon the submission of a loss mitigation application, while 12 C.F.R. A servicer that fails to comply with Regulation X is liable for actual damages and, upon a finding of a "pattern or practice" of non-compliance by the servicer, up to $2,000 in statutory damages. Because such information is stored electronically and based on objective criteria, the members of the class will be ascertainable without significant administrative burden. R. Civ. 2601-2617 (2012), specifically RESPA's implementing regulations known as "Regulation X," 12 C.F.R. Although section 13-316 provides a remedy only for economic damages arising from a mortgage servicer's failure to respond to an inquiry, see Md. 2010) (considering consistency of results that provide finality to the defendant as favoring a finding of superiority). 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. Robinson v. Nationstar Mortg. LLC | 2015 WL 4994491 | D. Md. | Judgment Before the error was discovered, Mr. Robinson appealed this offer as insufficient on April 10, 2014. PDF PUBLISHED - United States Court of Appeals for the Fourth Circuit 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. The Robinsons assert that they have paid a total of $6,147.12 in unspecified fees to Nationstar. The Robinsons' expert had written the scripts using data dictionaries and without accessing the databases. 15-05811, 2016 WL 3055901 (N.D. Cal. Robinson v. Nationstar Mortgage LLC (8:14-cv-03667) Actual damages may also include "non-pecuniary damages, such as emotional distress and pain and suffering." P. 23(a)(3); Deiter v. Microsoft Corp., 436 F.3d 461, 466-67 (4th Cir. 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. Before relating the facts relevant to the Motion for Class Certification, the Court will highlight the relevant procedural history affecting the record before the Court. The entry under "objected" acts as a unique identifier for an electronic file, but it does not contain information about the file's substance and could in fact contain multiple submissions or documents relating to one borrower. 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. While class members would not be eligible for statutory damages unless actual damages are shown, see 12 U.S.C. 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. According to Oliver, if he used incorrect data, that was a result of the limited data fields and definitions provided to him. 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. 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. Id. But, Nationstar is correct that Owens-Benniefield may Congress enacted RESPA to protect consumers from "unnecessarily high settlement charges caused by certain abusive practices" in the real estate mortgage industry, and to ensure "that consumers throughout the Nation are provided with greater and more timely information on the nature and costs of the settlement process." 26-1. Law 13-316(c), the Court will grant class certification as to those class members and claims. Code Ann., Com. 2605(f). The Robinsons own a business called Green Earth Services, which provides waste and recycling services to clients. 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. Id. Portland, OR 97208-3560. is generally unproblematic as the non-injured parties can just be sorted out at the remedies phase of the suit."). If the named plaintiff satisfies all of the Rule 23(a) requirements and the Rule 23(b)(3) requirements, then class certification is appropriate. Signed by Magistrate Judge Jillyn K Schulze on 9/9/2016 . In Frank v. J.P. Morgan Chase Bank, N.A., No. The Court will address the varying claims in turn. 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. Corp. ("McLean I"), 595 F. Supp. Nationstar correctly notes that the Robinsons have not identified a false or misleading statement or representation by Nationstar in the record. . Law 13-301 and 13-303, because the Robinsons do not have standing to bring those claims. In this photo illustration, the Nationstar Mortgage Holdings Inc. logo seen displayed on a smartphone. These letters are based on standard Nationstar templates, and the code reflects the type of letter sent. 2010). She alleges Nationstar was sent multiple disputes by both Experian and Equifax with documentation showing the debt was forgiven, yet Nationstar persisted in reporting the debt as valid. HealthSystem, 669 F.3d 802, 812 (7th Cir. Summary judgment will therefore be entered for Nationstar on the claims that Nationstar violated subsections (f) and (g). 2010) (holding that a plaintiff who "was not a borrower or otherwise obligated on the . Nationstar filed a notice of settlement and a joint motion to proceed before a magistrate . However, Nationstar did not comply with all requirements of Regulation X, which became effective on January 10, 2014. 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. Compl. Nationstar also argues that Oliver's report should be stricken as unreliable under the Federal Rules of Evidence and Daubert. See Baby Neal for and by Kanter v. Casey, 43 F.3d 48, 56-57 (3d Cir. 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. Baez, 709 F. App'x at 983. The Complaint asserts two claims. In Robinson v. Nationstar Mortgage LLC, No. 877-683-9363. 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." 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. Code Ann., Com. Auto. R. Civ. 1024.41(f), (g). Once an underwriter is assigned, that employee double-checks whether the application contains all required documentation and is complete. 2017) (holding that "incidental costs related to the sending of correspondence" to the servicer, including "postage and travel," are not actual damages under RESPA because such a rule "would transform virtually all unsatisfactory borrower inquiries into RESPA lawsuits"). 1024.41(b)(2)(B). The Nationwide Class and the Maryland Subclass are ascertainable and satisfy the Rule 23(a) factors. Subscribe to our free newsletter right now. 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. 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. 1024.41(i). The Nationstar Mortgage Unwanted Phone Calls Class Action Lawsuit is Wright, et al. The Robinsons and Nationstar then engaged in a series of tortured exchanges over the next several months. Fed. 3d 712, 728 (S.D. 125. "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. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Contact the Class Action Administrator at 1-855-917-3477 (Toll-Free). A Division of NBC Universal. 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. 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. THEODORE D. CHUANG United States District Judge. Nationstar, the fourth-largest mortgage servicer in the U.S., is set to pay $91 million to settle claims brought by the Consumer Financial Protection Bureau and state attorneys general alleging that the company failed to honor mortgage forbearance agreements and unfairly foreclosed on homeowners. 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. 12 C.F.R. 3d 1011, 1015 (W.D. (kw2s, Deputy Clerk) Download PDF Search this Case Google Scholar Google Books Legal Blogs Google Web Bing Web Google News Google News Archive Yahoo! Instead, the Robinsons assert that Nationstar has not affirmatively proven that it conducted such reviews. See, e.g., Linderman v. U.S. Bank Nat'l Ass'n, 887 F.3d 319, 321 (7th Cir. Fla. 2009), aff'd, 398 F. App'x 467, 471 (11th Cir. Nationstar to Pay $110 Million to Settle Borrower Claims 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.
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