2d 452, 468 (D. Md. PDF In the United States Court of Appeals for the Fourth Circuit 3d 1011, 1015 (W.D. 3d 712, 728 (S.D. Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403 (1977))). 1994) (noting that a single common issue is sufficient to meet the commonality requirement). Nationstar Call Settlement Administrator. The Robinsons, however, have not identified any evidence that Nationstar did not intend to, and did not, conduct such evaluations. 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. 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. 2601-2617 (2012), specifically RESPA's implementing regulations known as "Regulation X," 12 C.F.R. 16-0117, 2017 WL 4347826, at *15 (D. Md. Gunnells, 348 F.3d at 424 (quoting Amchem, 521 U.S. at 615). R. Evid. After two more extensions were granted, based on a finding by the Magistrate Judge that "Defendant has failed to comply" with its discovery obligations and delayed the process, discovery closed on March 22, 2018. 1024.41(b)(2)(i)(B) and Md. 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. 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. If the application is denied, a notice to that effect is sent to the borrower. The next day, Nationstar sent a letter noting that the August 25 application had been received and requesting additional information. Under subsections (f) and (g), a loan servicer is not permitted to begin foreclosure proceedings or move for foreclosure judgment if "a borrower submits a complete loss mitigation application" except in certain circumstances. In Robinson v. Nationstar Mortgage LLC, No. He asserted that the amount of fees was calculated based on Nationstar's statements, but he could not specify the nature of the fees. Tagatz v. Marquette Univ., 861 F.2d 1040, 1042 (7th Cir. R. Civ. PO Box 3560. At this stage of the proceedings, the Court must rely on facts in the record, and not assertions in the pleadings. See, e.g. LLCNo. Although Nationstar argues that Mr. Robinson has a conflict of interest because he wishes to avoid foreclosure and to delay payments on his mortgage, the record does not reflect that proposition. On February 16, 2017, the Court referred the case to United States Magistrate Judge Charles B. 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. Law 13-316(c). Plaintiffs Demetrius and Tamara Robinson (the "Robinsons") have resided in a home in Damascus, Maryland that has been subject to a mortgage loan. Finally, a loan servicer "is only required to comply with the requirements" of section 1024.41 "for a single complete loss mitigation application for a borrower's mortgage loan account." P. 23(b)(3). At least one court has found a similar expert report by Oliver to meet the Daubert standard. 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. In assessing the Motion, the Court views the facts in the light most favorable to the nonmoving party, with all justifiable inferences drawn in its favor. 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. Subscribe to our free newsletter right now. Northern District of Ohio, ohnd-1:2021-cv-00452 of 0 An error occurred while loading the PDF. The fact that Oliver's methodology has not been subjected to peer review and that he has not published any articles about it does not invalidate it. 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. The CFPB estimates about 40,000 borrowers were harmed by Nationstar's allegedly unfair and deceptive practices, according to a statement released Monday. Certification will also be denied as to the claim under 12 C.F.R. Robinson, 2015 WL 4994491, at *4 (citing Marchese v. JPMorgan Chase Bank, N.A., 917 F. Supp. at 983 (quoting 12 U.S.C. 1024.41(b)(2)(i)(B), which requires that an acknowledgment letter be sent within five days of receipt of a loss mitigation application; 12 C.F.R. Id. 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. 125. Class Action Claims Nationstar Mortgage Unlawfully Failed to Pay Corp. ("McLean II"), 398 F. App'x 467, 471 (11th Cir. Id. 2015) (holding that Regulation X did not apply to loss mitigation applications submitted before the effective date). In assessing this element, "numbers alone are not controlling" and a district court should consider "all of the circumstances of the case." 2006). 877-683-9363. State attorneys general are here for homeowners, Raoul adds. 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 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. 1024.41(i). On May 5, 2014, Nationstar asked the Robinsons for additional information to evaluate the appeal, including documents to verify their income. UNITED STATES DISTRICT COURT DISTRICT OF MARYLAND. 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. News Ask a Lawyer 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. 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. 2006). Id. Subsequent to the Court's approval, one of the objectors to the settlement filed an appeal. Fla. 2009), aff'd, 398 F. App'x 467, 471 (11th Cir. The Class Action Administrator would then begin distribution of the settlement funds. 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." 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. 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. Appellate Win Affirms $3 Million Settlement in Class Action against In Baez v. Specialized Loan Servicing, LLC, 709 F. App'x 979 (11th Cir. Discovery Order, ECF No. Signed by Judge Theodore D. Chuang on 8/18/2015. Contact the Class Action Administrator at 1-855-917-3477 (Toll-Free). On July 17, 2014, Nationstar informed Mr. Robinson by letter that he did not qualify for a HAMP modification and that since the March 14 loan modification offer had not been accepted, it was withdrawn. at 358. Va., Inc., 543 F.2d 1075, 1080 (4th Cir. McLean v. GMAC Mortg. 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. 2013) (holding that the plaintiff sufficiently pleaded actual injury or loss under the MCPA where he alleged that he suffered "bogus late fees," damage to his credit, and attorney's fees); see also Cole v. Fed'l Nat'l Mortg. 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. Like the class members, to prove his case, Mr. Robinson will have to show that Nationstar failed to timely and appropriately respond to his loan modification applications by pointing to the dates of his submissions and the dates and contents of Nationstar's responses. 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. A plaintiff has the burden to show that all of the necessary prerequisites for a class action have been met. TDC-14-3667 (D. Md. Accordingly, Nationstar's Motion for Summary Judgment will be granted as to the MCPA claims under sections 13-301 and 13-303. 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. Nationstar's Motion for Summary Judgment will be granted as to Tamara Robinson. From January 2014 to the present, the Robinsons have not pursued other loss mitigation options, such as a short sale. 2015) Court Description: MEMORANDUM OPINION. 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. Make your practice more effective and efficient with Casetexts legal research suite. Co., 350 F.3d 1018, 1023 (9th Cir. Although Monday's case specifically addresses Nationstar's actions following the Great Recession, the outcome can affect today's homeowners, says Kwame Raoul, attorney general of Illinois. Mrs. Robinson was the primary point of contact for the Robinsons in interacting with Nationstar. Subsequent Loss Mitigation Application. Compl. While the particulars of Mr. Robinson's application process will not necessarily prove that Nationstar mishandled the applications of other individual class members, these facts fairly encompass the types of claims that would be brought by the members of the class. Robinson et al v. Nationstar Mortgage LLC, No. 8:2014cv03667 - Justia Law 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(a). When each event occurseither the mailing of a letter or the changing of a code or substatusthe date is recorded in the databases. During this time and up until September 25, 2017, Nationstar had not begun any foreclosure proceedings on the Robinsons' home. Nationstar to pay $91 million to settle claims of it harmed - CNBC Code Ann., Com. Gariety v. Grant Thornton, LLP, 368 F.3d 356, 366 (4th Cir. 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. If you were contacted on your cell phone by a company via an . Law 13-301 and 303. Nationstar argues that it should be granted summary judgment on all of the RESPA claims because Nationstar was required to comply with Regulation X only as to a borrower's first loss mitigation application, and the Robinsons' March 7, 2014 application was not their first loan modification application. The Robinsons have not made any mortgage payments since January 2014 and have not been assessed any late fees since February 2014. Id. 2605(f)(1)(B), a borrower cannot recover these additional damages "without first recovering actual damages." Certification will not be granted as to the claims under 12 C.F.R. . 2010). P. 23(a)(2); Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). The Robinsons' designated expert, Geoffrey Oliver, has offered a methodology for identifying class members and when their rights under RESPA and the MCPA have been violated. See Lierboe v. State Farm Mut. Notably, although a borrower may recover up to $2,000 in statutory damages upon a showing of a "pattern or practice of non-compliance with the requirements" of Regulation X, 12 U.S.C. In February 2014, after their income had further decreased, the Robinsons ceased making payments on the mortgage loan. Bouchat v. Balt. The commonality requirement is also met. Auto. Once the documents are received, the Remedy Star substatus and LSAMS code are changed again to mark the application complete. The Motions are fully briefed, and no hearing is necessary to resolve the issues. He is joined by 49 other Attorneys General, the District of Columbia, and other state and federal agencies. 12 C.F.R. Id. 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. 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." 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. 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. This field is for validation purposes and should be left unchanged. 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. Code Ann., Com. The Robinsons assert that they have paid a total of $6,147.12 in unspecified fees to Nationstar. See Fed. Regulation X, which became effective on January 10, 2014, 78 Fed. Id. All but $28.6 million of its. Robinson v. Nationstar Mortgage LLC (8:14-cv-03667) Because there are, at a minimum, disputed issues of fact as to what fees, administrative costs, and interest constitute damages, the Court will deny the motion for summary judgment on the issue of actual damages. It follows that only borrowers may bring a claim that a loan servicer has violated Regulation X. 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. In this photo illustration, the Nationstar Mortgage Holdings Inc. logo seen displayed on a smartphone. The servicer "is liable for any economic damages caused by the violation." Co v. Adair, 764 F.3d 347, 359-60 (4th Cir. McLean II, 398 F. App'x at 471. Thus, the Court concludes that common computerized analysis can largely answer the question of whether Nationstar violated these RESPA provisions with respect to individual borrowers. THEODORE D. CHUANG United States District Judge. EQT Prod. Id 1024.41(c)(1). Law 13 . See MCC JR0529-31. Thorn v. Jefferson-Pilot Life Ins. 1998). Bouchat, 346 F.3d at 522. 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. Thus, based on his report and experience, Oliver concludes that Nationstar "failed to comply" with Regulation X and that it is possible to "identify violations" of Regulation X "using the methodologies" he described, without the necessity of a file-by-file review. 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. 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. 12 U.S.C. 12 U.S.C. 2001) (striking expert testimony because of a contingent fee arrangement), aff'd, 43 F. App'x 547 (4th Cir. McLean v. GMAC Mortg. The Robinsons' Motion for Class Certification will be GRANTED IN PART and DENIED IN PART. 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. However, Nationstar did not comply with all requirements of Regulation X, which became effective on January 10, 2014. 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. Reg. 10696, 10708 (Feb. 14, 2013) (codified at 12 C.F.R. But, Nationstar is correct that Owens-Benniefield may 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. v. DEMETRIUS ROBINSON; TAMARA ROBINSON, Plaintiffs - Appellees, v. . The Court will address the varying claims in turn. Code Ann., Com. According to Nationstar's Underwriting Workflow Procedures, which sets forth the steps followed to review loans for modifications, when a borrower submits a loan modification application, a code is entered into LSAMS and updates the loan's substatus in Remedy Star. 2013)). These fees allegedly violated the Fair Debt Collection Practices Act and the Washington state Collection Agency Act. 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." 17-0982, 2018 WL 4111938, at *5-6 (M.D. 1976) (holding that while it may be unethical for a lawyer to testify on behalf of a client as an expert, "it does not necessarily follow that any alleged professional misconduct" would require exclusion of the testimony because the rules of professional conduct do "not delineate rules of evidence"); United States v. Fogel, 901 F.2d 23, 26 (4th Cir. 1024.41(f), (g), and (h), and Md. Some of the alleged damages are not supported in law or in fact. 1024.41(d). Where the Robinsons may be able to show that they have suffered actual damages, their claim for statutory damages, upon a showing that Nationstar has engaged in a pattern or practice of violating Regulation X, remains viable. All Rights Reserved. The Fourth Circuit has stated that 74 members is "well within the range appropriate for class certification," Brady v. Thurston Motor Lines, 726 F.2d 136, 145 (4th Cir. 1024.41(c)(1)(ii), which requires a servicer to respond to a completed loan modification application; or Md. 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. See Johnson v. Ocwen Loan Servicing, 374 F. App'x 868, 873 (11th Cir. Law 13-301 and 13-303, because the Robinsons do not have standing to bring those claims. 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. PDF Motion for Fees - Robinson v Nationstar - Home Signed by Magistrate Judge Jillyn K Schulze on 9/9/2016 . While Mrs. Robinson stated that she was conducting bookkeeping for Green Earth Services during the relevant time frame, she testified that her work was less than six hours per week, and the Robinsons have not shown that her time spent communicating with Nationstar "resulted in actual pecuniary loss" to Mr. Robinson or the business. 2016) ("[F]ortuitous non-injury to a subset of class members does not necessarily defeat certification of the entire class, particularly as the district court is well situated to winnow out those non-injured members at the damages phase of the litigation, or to refine the class definition. Finally, the named plaintiff must "fairly and adequately protect the interests of class" without a conflict of interest with the absent class members. 2005))). P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). 2012). Id. The ruling serves as a reminder that Florida remains one of the top states for both mortgage fraud and lender errors. 1024.41 The loan is then evaluated for loan modification options. See Broussard, 155 F.3d at 344. 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. Class Cert. 1993) (quoting Blum v. Yaretsky, 457 U.S. 991, 1001 n.13 (1982)). Marchese v. JPMorgan Chase Bank, N.A., 917 F. Supp. Summ. Courts have wide discretion to certify a class based on their familiarity with the issues and potential difficulties arising in class action litigation. The comments to that rule state that the "common law rule in most jurisdictions is . Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Although each class member must individually show that they suffered "actual damages" under 12 U.S.C. Individual damages would be below the cost of litigation even if each class member could establish that Nationstar's conduct consisted of a pattern or practice of violating Regulation X, because the statute limits such damages to $2,000 per borrower. 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. See id. Campbell v. Nationstar Mortg., 611 F. App'x 288, 297-98 (6th Cir. 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. 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. P. 23(a)(1). 1987) (holding, in the context of an informant who is paid a contingent fee, that the fee should be treated "as a credibility factor"). "); see also 1 William Rubenstein et al., Newberg on Class Actions 2:3 (5th ed. Presently pending is Nationstar's Motion for Summary Judgment, Nationstar's Motion to Strike, and the Robinsons' Motion for Class Certification. 1988) (distinguishing between a rule of professional conduct and admissibility of evidence); cf. 1967). "); cf. Notably, Oliver's analysis did not consider foreclosure information because the data produced did not include dates of foreclosure sales. Fed. A servicer that fails to comply with Regulation X is liable for "any actual damages to the borrower as a result of the failure" to comply.
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