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. 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. Certification will also be denied as to the claim under 12 C.F.R. R. Civ. 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. 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. The "Nationwide Class" is composed of "[a]ll persons in the United States that submitted a loss mitigation application to Nationstar after January 10, 2014, and through the date of the Court's certification order." Every mortgage has a unique loan number that can be used to identify the borrower and the loan in each of the four databases. Code Ann., Com. See McGraw, 646 F.2d at 176. "[A]n evaluation of the merits to determine the strength of plaintiffs' case is not part of a Rule 23 analysis." 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. McLean v. GMAC Mortg. 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. Many impacted consumers have already received refunds and more will be contacted by the settlement administrator in the coming weeks. 1024.41(f), (g), and (h), and Md. 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. These fees allegedly violated the Fair Debt Collection Practices Act and the Washington state Collection Agency Act. 8:2014cv03667 - Document 18 (D. Md. See 12 C.F.R. Nationstar broke that trust by engaging in unfair and deceptive practices," Kraninger added. 2605(f)(2) is not fatal to the predominance inquiry. But where the broad methodology is sound, the lack of consideration of unproduced data cannot provide a basis to strike the expert witness's testimony. Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 344 (4th Cir. Factors "pertinent" to the predominance and superiority requirements include the "class members' interests in individually controlling" the litigation, whether litigation on the matter has already been begun by other class members, whether concentrating the litigation in one forum is desirable or undesirable, and the potential difficulties managing the class action presents. 2005))). If the named plaintiff satisfies all of the Rule 23(a) requirements and the Rule 23(b)(3) requirements, then class certification is appropriate. He asserted that the amount of fees was calculated based on Nationstar's statements, but he could not specify the nature of the fees. Id. 125. Id. Nationstar's reliance on Accrued Financial Services v. Prime Retail, Inc., 298 F.3d 291 (4th Cir. Universal Athletic Sales Co. v. Am. Appellate Win Affirms $3 Million Settlement in Class Action against Nationstar Mortgage - Tycko & Zavareei LLP Contact Us We look forward to hearing from you. In this photo illustration, the Nationstar Mortgage Holdings Inc. logo seen displayed on a smartphone. 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. In Frank v. J.P. Morgan Chase Bank, N.A., No. They have a home in Damascus, Maryland purchased by Demetrius Robinson ("Mr. Robinson"). Cal. 2003). Accordingly, Nationstar's Motion for Summary Judgment will be granted as to the MCPA claims under sections 13-301 and 13-303. That provision provides, in parallel, that a loan servicer which does not comply with Regulation X is liable "to the borrower." 2605(f)(2). See Krakauer v. Dish Network, L.L.C., 925 F.3d 643, 658 (4th Cir. R. Evid. 1990) (citing Universal Athletic favorably for this proposition). Regulation X, which became effective on January 10, 2014, 78 Fed. 1024.41(d). CFPB Director Kathleen Kraninger said in a statement. Distribution of funds to Class Members, however, could not occur because a member of the Class filed an objection to the Settlement and a subsequent appeal to the U.S. Court of Appeals for the Fourth Circuit. 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. 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. 12 C.F.R. Nationstar also asserts that the Robinsons have not identified evidence sufficient to support their MCPA claims. If you were contacted on your cell phone by a company via an . 2004). Co., 595 F.3d 164, 179 (4th Cir. 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. Ohio 2014). 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. 1024.41(b)(2)(B), (c)(1)(ii); Md. Code Ann., Com. Id. 1984), and has upheld the certification of a class with as few as 18 members, Cypress v. Newport News Gen. & Nonsectarian Hosp. 26-1. The Court will therefore deny the Motion for Summary Judgment as to this argument. After March 2014, Mrs. Robinson was primarily responsible for communicating with Nationstar and PaCE. And given that the class includes all borrowers who have submitted an application since January 10, 2014, joinder of all members is eminently impractical. Similarly, since Mr. Robinson has not suffered injury under these provisions, he may not bring those claims on behalf of the class. 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. The Court may rely only on facts supported in the record, not simply assertions in the pleadings. Lembach v. Bierman, 528 F. App'x 297 (4th Cir. Nationstar asserts that Oliver's testimony should be stricken because this fee arrangement includes an unethical contingency fee. 164. UNITED STATES DISTRICT COURT DISTRICT OF MARYLAND. . 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. 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. Courts have held that a person who did not sign the promissory note is not a "borrower" for the purposes of RESPA because that individual has not "assumed the loan." 1972). These letters are based on standard Nationstar templates, and the code reflects the type of letter sent. MCC JR 530. 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. Docket for Robinson v. Nationstar Mortgage LLC, 8:14-cv-03667 Brought to you by the RECAP Initiative and Free Law Project, a non-profit dedicated to creating high quality open legal information. Certification will not be granted as to the claims under 12 C.F.R. A $3.8 million settlement has been reached in a Nationstar convenience fee class action lawsuit, which claimed that the mortgage lender wrongfully charged convenience fees to their consumers when making payments on past due accounts. Wirtz v. Specialized Loan Servicing, LLC, 886 F.3d 713, 719-20 (8th Cir. 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. R. Civ. Summ. at 983. 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. 2018). 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. v. Nationstar Mortgage LLC, Case No. 1024.41(b)(2)(i)(B) and Md. 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. 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. See 12 C.F.R. 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. Subsequent Loss Mitigation Application. Am. 16-0117, 2017 WL 4347826, at *15 (D. Md. "); see also 1 William Rubenstein et al., Newberg on Class Actions 2:3 (5th ed. at 152. Mr. Robinson then submitted another loan modification application on August 25, 2014. Co v. Adair, 764 F.3d 347, 359-60 (4th Cir. 1024.41(a). 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. See Lierboe v. State Farm Mut. 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. 2015). Because all of the Rule 23(a) and (b)(3) requirements are met as to a class asserting violations of 12 C.F.R. In Baez v. Specialized Loan Servicing, LLC, 709 F. App'x 979 (11th Cir. Plaintiffs "must present specific evidence to establish a causal link between the [servicer's] violation and their injuries." In February 2014, after their income had further decreased, the Robinsons ceased making payments on the mortgage loan. 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. 16-0307, 2017 WL 1167230, at *3 (E.D.N.C. 89, 90, ECF No. P. 23(a)(4); Ward v. Dixie Nat'l Life Ins. 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] . Id. 15-0925, 2015 WL 5165415, at *4 (D. Md. See Broussard, 155 F.3d at 344. 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. Courts have wide discretion to certify a class based on their familiarity with the issues and potential difficulties arising in class action litigation. Cent. Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403 (1977))). at 359-60. (2012), and the Maryland Consumer Protection Act ("MCPA"), Md. Id. The Robinsons have not made any mortgage payments since January 2014 and have not been assessed any late fees since February 2014. Reg. Id. MCC JR 318, 530-531. 1998). When Nationstar received the application, it prevented late fees from being assessed and put a hold on any foreclosure proceedings. 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. Code Ann., Com. Code Ann., Com. 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." 1024.41(h)(1), (4). Although the parties have not offered specific details on the nature and timing of those costs and fees, it is reasonable to infer that at least some portion of them were incurred after they submitted their March 7, 2014 loan modification application and after Nationstar had violated Regulation X. Instead, the Robinsons assert that Nationstar has not affirmatively proven that it conducted such reviews. At the time, Nationstar had not completed the process of updating its systems to conform to those requirements. 2003) ("[I]f Lierboe has no stacking claim, she cannot represent others who may have such a claim, and her bid to serve as a class representative must fail. These events will be represented by discrete data points in Nationstar's databases, such that these violations may be proved through that data. 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. Where the Robinsons, after discovery, cannot point to evidence that Nationstar did not even consider or evaluate the Robinsons for loss mitigation options, they have not established the existence of a genuine issue of material fact on the issue of false or misleading statements. 1024.41(c)(1)(i) and (d), because the Robinsons made no showing that the Rule 23 requirements were met. 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. The comments to that rule state that the "common law rule in most jurisdictions is . Id. The commonality requirement is also met. Johnson, 374 F. App'x at 873; Keen v. Ocwen Loan Servicing, LLC, No. Hickerson, 882 F.3d at 480 (quoting Cooper, 259 F.3d at 199). In its complaint, filed in federal district court in the District of Columbia, the Bureau alleges that Nationstar engaged in unfair and deceptive acts and practices in violation of the Consumer Financial Protection Act of 2010, violated the Real Estate Settlement Procedures Act (RESPA), and violated the Homeowner's Protection Act of 1998 (HPA). Corp. ("McLean I"), 595 F. Supp. 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. Since neither party contends that Oliver's testimony and report are not "critical," the Court must address the Daubert challenge before reaching the question of class certification. Filed by Janie Robinson. See 12 C.F.R. Id. 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. 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. Nationstar's failings resulted in "substantial consumer harm," CFPB Director Kathleen Kraninger said in a statement. The Robinsons do not address this argument in their Opposition. He is joined by 49 other Attorneys General, the District of Columbia, and other state and federal agencies. Gym, Recreational & Athletic Equip. Nationstar admits that in March 2014, two months after the implementation date of Regulation X, it had not yet updated its systems to comply with the regulation. 2d at 1366. Class Cert. If the Court approves the Settlement and it becomes final and effective, and you remain in the Settlement Class, you will receive a payment. 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." A conflict of interest will not defeat the adequacy requirement when "all class members share common objectives[,] the same factual and legal positions, and . 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. 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. On February 16, 2017, the Court referred the case to United States Magistrate Judge Charles B. See Torres v. Mercer Canyons Inc., 835 F.3d 1125, 1137 (9th Cir. 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. Campbell v. Nationstar Mortg., 611 F. App'x 288, 297-98 (6th Cir. On July 16, 2018, the Court affirmed the Magistrate Judge's ruling and required Nationstar to produce all outstanding "records subject to discovery orders." 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." As of November 22, about 2.8 million homeowners were in a forbearance plan, according to the latest research from the Mortgage Bankers Association. 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. Instead, he analyzed certain data fields that were returned by the scripts written by a different expert. In response, on May 30, 2014, Mr. Robinson sent Nationstar the exact same application that he had submitted on March 7, 2014. 2011) ("[T]he possibility that a well-defined class will nonetheless encompass some class members who have suffered no injury . The Class Action Administrator would then begin distribution of the settlement funds. The public policy interest at issue was one against "stirring up litigation or promoting litigating for the benefit of the promoter rather than for the benefit of the litigant or the public," an interest not implicated in the same manner by the fee arrangement with the particular expert witness in this case. Signed by Judge Theodore D. Chuang on 8/18/2015. Tagatz v. Marquette Univ., 861 F.2d 1040, 1042 (7th Cir. . 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. 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 It is the plaintiffs who bear the burden of proving their claims. that it is improper to pay an expert witness a contingent fee." 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. 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. Because of the need to protect the rights of absent plaintiffs to assert different claims and of defendants to assert facts and defenses specific to individual class members, courts must conduct a "rigorous analysis" of whether a proposed class action meets the requirements of Federal Rule of Civil Procedure 23 before certifying a class. 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. Law 13-316(c), which requires a response to a mortgage servicing complaint or inquiry within 15 days. Nationstar filed a notice of settlement and a joint motion to proceed before a magistrate . 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. But, Nationstar is correct that Owens-Benniefield may Fed. See 12 C.F.R. Moreover, whether Nationstar engaged in a "pattern or practice" of Regulation X violations, within the meaning of 12 U.S.C. Because such a common question would have to be resolved in many if not all individual cases, it advances, rather than undermines, the argument in favor of predominance. R. Civ. Ins. See Johnson v. Ocwen Loan Servicing, 374 F. App'x 868, 873 (11th Cir. The plaintiff's claim "cannot be so different from the claims of absent class members that their claims will not be advanced by" proof of the plaintiff's own individual claim. which has the capacity, tendency, or effect of deceiving or misleading consumers." 17-0982, 2018 WL 4111938, at *5-6 (M.D. Since the parties do not argue that the Nationwide Class and the Maryland Subclass differ for the purposes of the class certification analysis, the Court will analyze them together. Anderson, 477 U.S. at 248. 2006). Regulation X went into effect on January 10, 2014. 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. 2012) (citing Lloyd v. Gen. Motors Corp., 916 A.2d 257, 277 (Md. P. 23(a)(1). 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. FCRA). There is no reason to conclude that individual class members have any particular interest in individually controlling the litigation through separate actions, or that this Court is an undesirable forum to host this litigation, since Nationstar services loans in this district, is subject to jurisdiction here, and has presented no argument that Maryland is an inconvenient forum. Contact the Class Action Administrator at 1-855-917-3477 (Toll-Free). 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. 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." Once the documents are received, the Remedy Star substatus and LSAMS code are changed again to mark the application complete. Id. 1024.41(h)(1), (4). P. 23(b)(3). Code Ann., Com. Robinson et al v. Nationstar Mortgage LLC, No. application to Nationstar after January 10, 2014, and through the date of the Court's .