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. The comments to that rule state that the "common law rule in most jurisdictions is . Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 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. Law 13-316(c), which requires a response to a mortgage servicing complaint or inquiry within 15 days. Corp. ("McLean II"), 398 F. App'x 467, 471 (11th Cir. Nationstar has no process for standardizing file names. 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. . 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. As for the claims of errors in Oliver's analysis, although this criticism is couched as his "misunderstanding the nature of Nationstar's various databases," Nationstar largely challenges Oliver's failure to use particular data fields, some which were never made available to him. Those claims arose from Nationstar's alleged Co., 595 F.3d 164, 179 (4th Cir. Joint Record ("MCC JR") 0907. Plaintiffs Demetrius and Tamara Robinson (the "Robinsons") have resided in a home in Damascus, Maryland that has been subject to a mortgage loan. For example, since default fees are often paid by sources other than the borrower, such as in a short sale or refinancing, Nationstar challenges Oliver's assessment that fees identified through LSAMS can be deemed to constitute damages from RESPA violations, because the software does not reflect who paid the fee. The Court may rely only on facts supported in the record, not simply assertions in the pleadings. 2010). Write to the Court if you do not like the Settlement. 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. 1024.41(c)(1)(i). 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. Subsequent to the Court's approval, one of the objectors to the settlement filed an appeal. 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"). (2012), and the Maryland Consumer Protection Act ("MCPA"), Md. 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. RESPA's implementing regulations, codified at 12 C.F.R. . 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. 09-08213, 2011 WL 11651320 (C.D. Nationstar ultimately became the servicer of the Robinsons' loan. 1024.41(c)(1)(ii), which requires a servicer to respond to a loan modification application within 30 days of receipt of a complete loss mitigation application and provide notice of appeal rights; 12 C.F.R. Nationstar's Motion for Summary Judgment will be granted as to Tamara Robinson. 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. 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. 164. If the Court approves the Settlement and it becomes final and effective, and you remain in the Settlement Class, you will receive a payment. Fed. See 12 C.F.R. An "unfair or deceptive" trade practice includes a "false . Law 13 . 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. Therefore, Nationstar was required to comply with section 1024.41 in processing it. Bouchat v. Balt. Likewise, the articulated concern that Nationstar would not be required to respond to loss mitigation applications filed within a certain number of days of a foreclosure sale, can be addressed through the provision of data relating to the dates of scheduled foreclosure sales. When Nationstar received the application, it prevented late fees from being assessed and put a hold on any foreclosure proceedings. Gunnells, 348 F.3d at 429 ("[T]he need for individualized proof of damages alone will not defeat class certification."). 2601-2617 (2012), specifically RESPA's implementing regulations known as "Regulation X," 12 C.F.R. In analyzing this question, a court compares the class representative's claims and defenses to those of the absent class members, considers the facts needed to prove the class representative's claims, and assesses the extent to which those facts would also prove the claims of the absent class members. Furthermore, Oliver states that since Nationstar employees used templates to communicate with borrowers, he could determine whether there were violations of certain RESPA provisions based on entries showing that Nationstar employees used templates that did not comply with RESPA. Make your practice more effective and efficient with Casetexts legal research suite. Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act ("Regulation X"), 78 Fed. Nationstar's failings resulted in "substantial consumer harm," CFPB Director Kathleen Kraninger said in a statement. . Code Ann., Com. P. 23(b)(3). 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. Indeed, Nationstar does not seriously contest the commonality prong. 2002) (affirming without addressing the propriety of the striking of the expert testimony). 1024.41(b)(1). 2004). 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. 1024.41(a). Law 13-101 to 13-411 (West 2015). To view the settlement agreement and consent order, please visit the CSBS's website. 2010). The Robinsons, however, have not identified any evidence that Nationstar did not intend to, and did not, conduct such evaluations. 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. See Md. 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. Courts have wide discretion to certify a class based on their familiarity with the issues and potential difficulties arising in class action litigation. See 12 C.F.R. R. Civ. Fed. 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. DEMETRIUS ROBINSON and TAMARA ROBINSON, Plaintiffs, v. NATIONSTAR MORTGAGE LLC, Defendant. Id. The Nationstar Mortgage Unwanted Phone Calls Class Action Lawsuit is Wright, et al. 2005))). Id. MCC JR 318, 530-531. In Robinson v. Nationstar Mortgage LLC, No. 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. ; 78 Fed. 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). On February 16, 2017, the Court referred the case to United States Magistrate Judge Charles B. EQT Prod. Gym, Recreational & Athletic Equip. This field is for validation purposes and should be left unchanged. For purposes of ascertainability, the requirements of 12 C.F.R. See Johnson v. Ocwen Loan Servicing, 374 F. App'x 868, 873 (11th Cir. 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. 2605(f)(1)(B), a borrower cannot recover these additional damages "without first recovering actual damages." 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." 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 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." MCC JR 530. Code Ann., Com. 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. 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. 89, 90, ECF No. See, e.g., Ward v. Dixie Nat. See 12 C.F.R. FCRA). 1988) (distinguishing between a rule of professional conduct and admissibility of evidence); cf. 1024.41(c)(1)(i). The Robinsons own a business called Green Earth Services, which provides waste and recycling services to clients. Appellate Win Affirms $3 Million Settlement in Class Action against Nationstar Mortgage - Tycko & Zavareei LLP Contact Us We look forward to hearing from you. LLC, No. The Borrower Payment Amount shall be used: (1) for payments to borrowers who submit claims and are in either or both of the Service Transfer and Property Preservation Populations set forth below; and (2) for reasonable costs and expenses of the Settlement Administrator, including taxes and fees for tax counsel. See Krakauer v. Dish Network, L.L.C., 925 F.3d 643, 658 (4th Cir. 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." 8:2014cv03667 - Document 18 (D. Md. 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(f), (g). Here, Mrs. Robinson signed the Deed but did not sign the Note. 2014). Where the results of such an analysis would apply to any individual claim, it would be highly inefficient and wasteful to require duplicative analysis in each such case. "There are going to be a lot of homeowners who need a home loan modification or other assistance," Raoul says. 2018). Gariety v. Grant Thornton, LLP, 368 F.3d 356, 366 (4th Cir. A Division of NBC Universal. 3d 254, 274-75 (S.D.N.Y. 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. that it is improper to pay an expert witness a contingent fee." 1024.41(f), (g), and (h), and Mr. Robinson's MCPA claim under sections 13-301 and 13-303. Regulation X, which became effective on January 10, 2014, 78 Fed. Part 1024). 13-316(e)(1). As for typicality, the named plaintiff must be "typical" of the class, such that that the class representative's claim and defenses are "typical of the claims or defenses of the class" in that prosecution of the claim will "simultaneously tend to advance the interests of the absent class members." Lembach v. Bierman, 528 F. App'x 297 (4th Cir. 1024.41(b)(1), (b)(2)(i)(B), and (c)(1)(ii) and Md. Gunnells v. Healthplan Serv., Inc., 348 F.3d 417, 458 (4th Cir. The first of these prerequisites is that the class must exist and be "readily identifiable" or "ascertainable" by the court through "objective criteria." ("MCC") 2, ECF No. If a class is ascertainable, it must then satisfy all four elements of Rule 23(a): numerosity, commonality, typicality, and adequacy. 1024.41(d). See Wirtz, 886 F.3d at 719-20. Because Oliver's methodology is reliable within the meaning of Federal Rule of Civil Procedure 702 and Daubert, Nationstar's Motion to Strike will be denied. During discovery, Oliver revealed that his fee arrangement with the Robinsons includes a flat fee for his expert services, but that a portion of the fee is contingent on the certification of a class in this case. In Robinson v., Under the RESPA, civil liability is limited to "borrowers": "[w]hoever fails to comply with any provision of, Full title:DEMETRIUS ROBINSON and TAMARA ROBINSON, Plaintiffs, v. NATIONSTAR MORTGAGE, Court:UNITED STATES DISTRICT COURT DISTRICT OF MARYLAND. 2605(f)(2) is not fatal to the predominance inquiry. In 2007, Mr. Robinson obtained a loan with the principal amount of $755,000 to refinance the property. "If a borrower's complete loss mitigation application is denied for any trial or permanent loan modification option available to the borrower," the servicer must state in the required notice to the borrower "the specific reason or reasons for the servicer's determination for each such trial or permanent loan modification and, if applicable, that the borrower was not evaluated on other criteria." 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. Before the error was discovered, Mr. Robinson appealed this offer as insufficient on April 10, 2014. The Court will therefore deny the Motion for Summary Judgment as to this argument. R. Civ. Id. 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. 2007)), aff'd sub nom. 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. 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. 1024.41 (2019), and the Maryland Consumer Protection Act ("MCPA"), Md. 12 U.S.C. If a borrower is experiencing issues or not getting the help needed, contact your state attorneys general. Fed. 2601-2617 (2012), specifically RESPA's implementing regulations known as "Regulation X," 12 C.F.R. The Motions are fully briefed, and no hearing is necessary to resolve the issues. . Mrs. Robinson was the primary point of contact for the Robinsons in interacting with Nationstar. 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 argues that summary judgment should be entered on the Robinsons' MCPA claim under section 13-316 because the Robinsons have not shown that they submitted a complaint or inquiry that triggers a duty to respond. Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403 (1977))). 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. As to the third denial on November 7, 2013, Nationstar informed the Robinsons that the loan modification application was denied because the mortgage loan was not in default. The loan is then evaluated for loan modification options. While Demetrius Robinson did appeal Nationstar's March 15, 2014 offer of an in-house modification, the requirements of subsection (h) were not triggered because the offer was not a denial of a loan modification application. In this photo illustration, the Nationstar Mortgage Holdings Inc. logo seen displayed on a smartphone. at *2. 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. Class Certif. 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. Id. Universal Athletic Sales Co. v. Am. Code Ann., Com. 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. Mr. Robinson's counsel is experienced in complex civil litigation and class action litigation. R. Civ. 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. Fed. "[A]n evaluation of the merits to determine the strength of plaintiffs' case is not part of a Rule 23 analysis." Whether an application is complete depends on the requirements of the investor who holds the 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." Nationstar also argues that Oliver's report should be stricken as unreliable under the Federal Rules of Evidence and Daubert. 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. v. W.R. Grace & Co., 6 F.3d 177, 188 (4th Cir. 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." Joint Record ("MSJ JR") 0102. That is not so here. 702, 703. Law 13-301 and 13-303, because the Robinsons do not have standing to bring those claims. THEODORE D. CHUANG United States District Judge. Code Ann., Com. 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 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. 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. Since the MCPA and Regulation X allow recovery only of "economic damages," Md. See Baby Neal for and by Kanter v. Casey, 43 F.3d 48, 56-57 (3d Cir. 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. Certification will not be granted as to the claims under 12 C.F.R. 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. On July 16, 2018, the Court affirmed the Magistrate Judge's ruling and required Nationstar to produce all outstanding "records subject to discovery orders." 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.'" 12 C.F.R. Id. . 2605(f)(1). at 359-60. "); cf. 14-3667, 2015 WL 4994491, at *1-2 (D. Md. After several customers of Green Earth Services canceled its services, the Robinsons sought loss mitigation in the form of a loan modification from Nationstar. 1024.41(h)(1), (4). . Id. 1024.41, a regulation of RESPA that outlines loss mitigation procedures. 12 C.F.R. Amchem Prods. The Class Action Administrator would then begin distribution of the settlement funds. Finally, the Court notes that a decision to certify a class is based on whether or not a putative class satisfies the Rule 23 factors, not on a preliminary assessment of the underlying merits of the claim. 2013); Poindexter v. Teubert, 462 F.2d 1096, 1097 (4th Cir. 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. 1024.1, prescribe additional duties and responsibilities of mortgage servicers under RESPA. Eligible consumers will be contacted by Nationstar or the settlement administrator about refunds under the settlement. Actual damages may also include "non-pecuniary damages, such as emotional distress and pain and suffering." Although similar to Rule 23(a)'s commonality requirement, the test for predominance under Rule 23(b)(3) is "far more demanding" and "tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation." Finally, Nationstar argues that summary judgment should be entered on the RESPA claims because the Robinsons cannot establish that they have suffered actual damages as a result of Nationstar's violations of Regulation X. Every mortgage has a unique loan number that can be used to identify the borrower and the loan in each of the four databases. 143. He asserts that damages to borrowers can be calculated based on entries in LSAMS and other data showing that fees were assessed, and that it would be possible to identify which fees would not have been assessed but for a RESPA violation. 1993) (quoting Blum v. Yaretsky, 457 U.S. 991, 1001 n.13 (1982)). See supra parts I.B.1, I.B.3, I.C.1. Sept. 9, 2019), there were multiple other claims at issue, for which Oliver's expert report seemed better suited to address. At least one court has found a similar expert report by Oliver to meet the Daubert standard. Additional facts relevant to the pending motions are set forth below. 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." Mr. Robinson then submitted another loan modification application on August 25, 2014. 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. Nationstar also does not argue that the class is not numerous, as there approximately 33,855 members who submitted loss mitigation applications from January 10, 2014 to March 30, 2014. 16-0307, 2017 WL 1167230, at *3 (E.D.N.C. 28, 2017). J. 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.
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