The first of these prerequisites is that the class must exist and be "readily identifiable" or "ascertainable" by the court through "objective criteria." See 12 C.F.R. Accordingly, Nationstar did not send the Robinsons an acknowledgment letter within five days stating that it had received the application, as required by Regulation X. 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. 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. "We will be watching the mortgage interest industry to ensure they are treating homeowners fairly and fulfilling their obligations.". Similarly, though the precise nature of the fees imposed was not specified, it is reasonable to infer that some were attributable to delays linked to RESPA violations. See Robinson v. Nationstar Mortg. The Motions are fully briefed, and no hearing is necessary to resolve the issues. In 2007, Mr. Robinson obtained a loan with the principal amount of $755,000 to refinance the property. Class Cert. Filing fee paid $ 402, Receipt number AOHNDC-10680087. 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. Appellate Win Affirms $3 Million Settlement in Class Action against Nationstar Mortgage - Tycko & Zavareei LLP Contact Us We look forward to hearing from you. See Krakauer v. Dish Network, L.L.C., 925 F.3d 643, 658 (4th Cir. Id. 2015) Court Description: MEMORANDUM OPINION. A fact is "material" if it "might affect the outcome of the suit under the governing law." 2003). . That provision provides, in parallel, that a loan servicer which does not comply with Regulation X is liable "to the borrower." Discovery Order, ECF No. In the Amended Complaint, the Robinsons claim that Nationstar's representations that it offered many loss mitigation plans and "would evaluate" borrowers "for eligibility for all these loss mitigation plans" were false. See supra parts I.B.1, I.B.3, I.C.1. 26-1. Furthermore, Nationstar's argument that the Robinsons are not typical largely recycles the same arguments made in the Motion for Summary Judgment. 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. After March 2014, Mrs. Robinson was primarily responsible for communicating with Nationstar and PaCE. Cf. Nationstar also asserts that the Robinsons have not identified evidence sufficient to support their MCPA claims. A settlement has been reached in a class action lawsuit alleging Nationstar Mortgage LLC (Nationstar or Defendant) violated the Real Estate Settlement Procedures Act (RESPA) by failing to adhere to its requirements with respect to its customers loss mitigation applications and that Nationstar violated Maryland law by not timely responding to its customers mortgage servicing complaints. ("MCC") 2, ECF No. Id. Certification will also be denied as to the claim under 12 C.F.R. In its Motion to Strike, Nationstar argues that Oliver's methodology has not been peer reviewed, has a high error rate because he used the wrong data fields to identify the dates of events, failed to consider the timing of foreclosure sales relative to the dates of the submission of loan modification applications, and did not propose a specific methodology for calculating damages. Nationstar correctly notes that the Robinsons have not identified a false or misleading statement or representation by Nationstar in the record. 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. In addition to the fines and restitution, Delaware Attorney General Kathleen Jennings said the settlements require Nationstar to adhere to increased "servicing standards." 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. 1993) (quoting Blum v. Yaretsky, 457 U.S. 991, 1001 n.13 (1982)). Fed. It is the plaintiffs who bear the burden of proving their claims. Id. 09-08213, 2011 WL 11651320 (C.D. Accordingly, a loan servicer must comply with Regulation X as to the first loss mitigation application submitted after the effective date. 12 C.F.R. 1024.41(c)(1)(i) and (d), because the Robinsons made no showing that the Rule 23 requirements were met. In support of this argument, Nationstar contends that the ethical rules for attorneys prohibit contingency fee arrangements with expert witnesses. 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. Summ. 2605(f). Mr. Robinson then submitted another loan modification application on August 25, 2014. See D. Md. v. Windsor, 521 U.S. 591, 623-24 (1997). Mar. 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. Specifically, the application itself would have to be reviewed to determine when it was stamped as received by Nationstar. 2018). 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 . The economic challenges and burdens that homeowners currently face are similar to the ones experienced following the Great Recession. Robinson v. Nationstar Mortgage LLC (8:14-cv-03667) at 300. 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. The Nationstar Mortgage Unwanted Phone Calls Class Action Lawsuit is Wright, et al. Ohio 2014). Sep. 9, 2019). 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. at 359-60. From January 2014 to the present, the Robinsons have not pursued other loss mitigation options, such as a short sale. 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. In addition, Nationstar asserts that not all loan modification applications referred to an underwriter are complete. 89, 90, ECF No. In assessing this element, "numbers alone are not controlling" and a district court should consider "all of the circumstances of the case." In their Motion for Class Certification, the Robinsons seek certification of two classes. Make your practice more effective and efficient with Casetexts legal research suite. 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. These claims do not have to be factually or legally identical, but the class claims should be fairly encompassed by those of the named plaintiffs. Id. The Court may rely only on facts supported in the record, not simply assertions in the pleadings. Corp., 546 F.2d 530, 538-39 (3d Cir. 2d 452, 467 (D. Md. 2601 et seq. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). "We want to hear from you," Raoul says. ("Opp'n') 13, ECF No. AG Shapiro Secures $2.75 Million for Pennsylvania Mortgage Loan 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. For the foregoing reasons, Nationstar's Motion for Summary Judgment will be GRANTED IN PART and DENIED IN PART. Nationstar also seeks summary judgment on the Robinsons' claims under the MCPA, which include claims of misleading statements in connection with the collection of consumer debts, in violation of section 13-301(1), (3) and section 13-303(4)-(5) of the MCPA, and claims that Nationstar did not respond to consumer inquiries within 15 days, in violation of section 13-316(c) of the MCPA. 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. Nationstar's Motion will be denied as to this claim. 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. Once an underwriter is assigned, that employee double-checks whether the application contains all required documentation and is complete. Code Ann., Com. Code Ann., Com. Cal. Id. 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. 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. See id. 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." 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. Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403 (1977))). 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. at 983. This abandoned high school was converted into a 31-unit apartment building, number of unlawful practices in handling mortgages following the Great Recession. Nationstar's Motion to Strike will be DENIED. Cal. 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. In Robinson v. Nationstar Mortgage LLC, No. 15-0925, 2015 WL 5165415, at *4 (D. Md. Thus, Mrs. Robinson is not "obligated" to pay the amount due on the Note and therefore is not a "borrower" for purposes of RESPA. 2014). Cent. TDC-14-3667 (D. Md. An expert's testimony is "critical" where it is "important to an issue decisive for the motion for class certification." at 358. 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. R. Civ. Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 344 (4th Cir. 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. LLC, No. Additional facts relevant to the pending motions are set forth below. Id. Law 13-316(c), the Court will grant class certification as to those class members and claims. Hickerson, 882 F.3d at 480 (quoting Cooper, 259 F.3d at 199). 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.'" 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. 12 U.S.C. 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. Tagatz, 861 F.2d at 1042; cf. Specifically, if a loss mitigation application is received "45 days or more before a foreclosure sale," the loan servicer must provide a notice to the borrower "in writing within 5 days" of receiving it in which the servicer acknowledges receipt of the application and states whether the "application is either complete or incomplete." 8:2014cv03667 - Document 18 (D. Md. RESPA's implementing regulations, codified at 12 C.F.R. Finally, the Court finds that Mr. Robinson will adequately represent the absent class members. Maryland's Commissioner of Financial Regulation Announces Settlement This field is for validation purposes and should be left unchanged. 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] . Opp'n Mot. 2605(f)(1)(B), a borrower cannot recover these additional damages "without first recovering actual damages." Rules Prof'l Conduct 3.4 cmt. 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. 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. 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. 3d 249, 266 (D. Md. These events will be represented by discrete data points in Nationstar's databases, such that these violations may be proved through that data. PDF PUBLISHED - United States Court of Appeals for the Fourth Circuit 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. The comments to that rule state that the "common law rule in most jurisdictions is . To view the settlement agreement and consent order, please visit the CSBS's website. The lawsuit alleges, however, that Nationstar has not made interest payments to the plaintiffs, nor provided any record that interest was accruing and due to the homeowners, at any time during or after December 1, 2018 to March 22, 2019 or May 1, 2020 through the present. Nationstar Mortgage TCPA Class Action Settlement After several customers of Green Earth Services canceled its services, the Robinsons sought loss mitigation in the form of a loan modification from Nationstar. A conflict of interest will not defeat the adequacy requirement when "all class members share common objectives[,] the same factual and legal positions, and . at 300. 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. McLean v. GMAC Mortg. 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. See Keen, 2018 WL 4111938, at *5-6. Fla. 2009), aff'd, 398 F. App'x 467, 471 (11th Cir. Fed. For purposes of ascertainability, the requirements of 12 C.F.R. Campbell v. Nationstar Mortg., 611 F. App'x 288, 297-98 (6th Cir. Sept. 2, 2015). 2605(f)(2) is not fatal to the predominance inquiry. 2d at 1366. 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. 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. TDC-14-3667, 2019 WL 4261696 (D. Md. 2007)), aff'd sub nom. After they became delinquent on their loan, the Robinsons submitted another loan modification application to Nationstar on March 7, 2014. See Tyson Foods, 136 S. Ct. at 1046-47 (holding that representative sampling was a permissible method to prove whether time spent donning and doffing gear resulted in violations of the Fair Labor Standards Act). And given that the class includes all borrowers who have submitted an application since January 10, 2014, joinder of all members is eminently impractical. Since Mr. Robinson has the same goal as the other class members of establishing that Nationstar violated Regulation X with respect to his loan, he will adequately protect their interests. To satisfy the numerosity requirement, the proposed class must be so numerous that "joinder of all members is impracticable." Nationstar will need to enhance its policies and processes around how it handles consumer complaints, performs escrow analyses and conducts audits, for example. See Torres v. Mercer Canyons Inc., 835 F.3d 1125, 1137 (9th Cir. The Robinsons own a business called Green Earth Services, which provides waste and recycling services to clients. Since it is the plaintiff's burden to establish that the requirements of Rule 23 have been met and Mr. Robinson has failed to do so, the Motion for Class Certification will be denied as to any claims that Nationstar violated 12 C.F.R. 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. Id. A Division of NBC Universal. 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. Code Ann., Com. But, Nationstar is correct that Owens-Benniefield may 3d 254, 274-75 (S.D.N.Y. "[N]amed class representatives [must] demonstrate standing through a 'requisite case or controversy between themselves personally and defendants,' not merely allege that 'injury has been suffered by other, unidentified members of the class to which they belong and which they purport to represent.'" Md. J. Nationstar also argues that Oliver's report should be stricken as unreliable under the Federal Rules of Evidence and Daubert. 1024.41(f), (g), and (h) because there is no evidence in the record that Nationstar violated those provisions. 164. Code Ann., Com. Amchem Prods. Every mortgage has a unique loan number that can be used to identify the borrower and the loan in each of the four databases. R. Civ. 1984), and has upheld the certification of a class with as few as 18 members, Cypress v. Newport News Gen. & Nonsectarian Hosp. FCRA). 2d 754, 768-69 (D. Md. 12 U.S.C. While Mr. Robinson signed the promissory note ("the Note"), the deed of trust ("the Deed"), and the balloon payment rider for the 2007 loan, Tamara Robinson ("Mrs. Robinson") signed only the Deed and balloon payment rider and did not sign the Note. As the Supreme Court noted in Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999), Daubert "made clear that its list of factors was meant to be helpful, not definitive," and it is not always the case that an expert witness's claim will have been subjected to peer review. 1024.41(a). 2002) (affirming without addressing the propriety of the striking of the expert testimony). A separate Order shall issue. 2010) (holding that a plaintiff who "was not a borrower or otherwise obligated on the . The denial letters stated that the loan's principal balance exceeded the limit under HAMP. During this time and up until September 25, 2017, Nationstar had not begun any foreclosure proceedings on the Robinsons' home. Id. 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. If a class is ascertainable, it must then satisfy all four elements of Rule 23(a): numerosity, commonality, typicality, and adequacy. 1024.41(d). It will be otherwise denied. 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. P. 23(a)(2); Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). DEMETRIUS ROBINSON and TAMARA ROBINSON, Plaintiffs, v. NATIONSTAR MORTGAGE LLC, Defendant. McLean v. GMAC Mortg. 143. 15-3960, 2017 WL 623465, at *8 (D. Md. See Farmer v. Ramsay, 159 F. Supp. A settlement has been reached in a class action lawsuit alleging Nationstar Mortgage LLC ("Nationstar" or "Defendant") violated the Real Estate Settlement Procedures Act ("RESPA") by failing to adhere to its requirements with respect to its customers' loss mitigation applications and that Nationstar violated Maryland law by not timely responding 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. 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. 16-0117, 2017 WL 4347826, at *15 (D. Md. Several states also fined Nationstar in 2018 over failing to have proper procedures in place and "unfair and deceptive" mortgage modification policies. Although each class member must individually show that they suffered "actual damages" under 12 U.S.C. The Robinsons' expert had written the scripts using data dictionaries and without accessing the databases. 1990) (citing Universal Athletic favorably for this proposition). State attorneys general are here for homeowners, Raoul adds. Id. Nationstar filed a notice of settlement and a joint motion to proceed before a magistrate . Ward, 595 F.3d at 180 (quoting Gunnells, 348 F.3d at 430). At least one court has found a similar expert report by Oliver to meet the Daubert standard. "[A]n evaluation of the merits to determine the strength of plaintiffs' case is not part of a Rule 23 analysis." . . Questions? 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. From this methodology, Oliver concluded that Nationstar failed to inform borrowers of their appeal rights in 39 percent of the sampled loans and failed to exercise reasonable diligence by improperly requested the same documentation already provided in 18 percent of the loans. (2012), and the Maryland Consumer Protection Act ("MCPA"), Md. 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. Commonality requires that a class have "questions of law or fact common to the class" which are capable of classwide resolution, such that the determination of the truth or falsity of the common issue "will resolve an issue that is central to the validity of each one of the claims in one stroke." LLCNo. 12 C.F.R. 2. See 12 C.F.R. 1024.41(b)(1), which requires reasonable diligence in obtaining documents and information to complete a loss mitigation application; and Md. Wirtz v. Specialized Loan Servicing, LLC, 886 F.3d 713, 719-20 (8th Cir. Wesleyan Coll. 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. . Thorn v. Jefferson-Pilot Life Ins. In Accrued Financial, the United States Court of Appeals for the Fourth Circuit held that where commercial real estate tenants assigned their potential claims against their landlords to a commercial real estate auditor under an arrangement through which the auditor would receive a percentage of any recovery in litigation, the assignments violated public policy because where the auditor's employees could testify in such litigation, the assignments "provide for supplying expert testimony for a contingent fee."