Code Ann., Com. On February 16, 2017, the Court referred the case to United States Magistrate Judge Charles B. 1993) (quoting Blum v. Yaretsky, 457 U.S. 991, 1001 n.13 (1982)). If a class is ascertainable, it must then satisfy all four elements of Rule 23(a): numerosity, commonality, typicality, and adequacy. Fed. 2014))). 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." Campbell v. Nationstar Mortg., 611 F. App'x 288, 297-98 (6th Cir. See D. Md. Id. Local R. 105.6. For the foregoing reasons, Nationstar's Motion for Summary Judgment will be GRANTED IN PART and DENIED IN PART. The denial letters stated that the loan's principal balance exceeded the limit under HAMP. 2010). 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). Finally, the named plaintiff must "fairly and adequately protect the interests of class" without a conflict of interest with the absent class members. . 125. Sept. 29, 2017); Billings v. Seterus, Inc., 170 F. Supp. 2004). McLean II, 398 F. App'x at 471. See McGraw, 646 F.2d at 176. v. Nationstar Mortgage LLC. 16-0307, 2017 WL 1167230, at *3 (E.D.N.C. Portland, OR 97208-3560. The Court will not revisit this determination. 2605(f), caused by the violation, which likely consist of administrative fees and costs, the individual recovery available for each class member would likely be low, far below the cost of litigating the claims themselves. See Baby Neal for and by Kanter v. Casey, 43 F.3d 48, 56-57 (3d Cir. Petitioner: NATIONSTAR MORTGAGE, LLC: Respondent: TAMARA ROBINSON and DEMETRIUS ROBINSON: Case Number: 19-379: Filed: September 24, 2019: Court: U.S. Court of Appeals . Va., Inc., 543 F.2d 1075, 1080 (4th Cir. Instead, he analyzed certain data fields that were returned by the scripts written by a different expert. That claim will be subject to common proof, namely sampling and analysis of loan files along the lines suggested by Oliver. A letter noting receipt of the application is automatically generated and sent to the borrower, and a Nationstar employee checks the application's documentation to determine if it is complete based on a checklist. 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. Regulation X went into effect on January 10, 2014. Regulation X, which became effective on January 10, 2014, 78 Fed. Although based on imperfect data, Oliver's expert report reveals that such analysis can substantially address whether Nationstar violated 12 C.F.R. Id. 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. 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. at 300. While Mr. Robinson sought to reduce his monthly mortgage payment in applying for a loan modification, his deposition testimony reflects that he understands that the present lawsuit contends that Nationstar did not process the Robinsons' loan modification application correctly. 1990) (citing Universal Athletic favorably for this proposition). . Robinson v. Nationstar Mortg. LLC - Casetext 17-0982, 2018 WL 4111938, at *5-6 (M.D. PO Box 3560. 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. PDF PUBLISHED - United States Court of Appeals for the Fourth Circuit A Division of NBC Universal. Code Ann., Com. Wright et al. The Robinsons appealed the Magistrate Judge's ruling because it did not require Nationstar to run a structural script for a third database. 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. Accordingly, a loan servicer must comply with Regulation X as to the first loss mitigation application submitted after the effective date. 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. Nationstar claims that manual review of each file would take about 60 to 90 minutes per file. The first of these prerequisites is that the class must exist and be "readily identifiable" or "ascertainable" by the court through "objective criteria." 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. MSJ JR 0284. 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. Law 13-316(c) are triggered upon the submission of a loss mitigation application, while 12 C.F.R. Id. Id. 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." Throughout discovery, Nationstar repeatedly stated that it could not produce the data on loss mitigation or loan modification applications from its databases in the form requested by the Robinsons. Although each class member must individually show that they suffered "actual damages" under 12 U.S.C. Once an underwriter is assigned, that employee double-checks whether the application contains all required documentation and is complete. USCA4 Appeal: 21-1087 Doc: 38 Filed: 06/15/2021 Pg: 9 of 33 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. Co, 445 F.3d 311, 318 (4th Cir. 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. 2605(f). Mot. In approving such a modification, Nationstar made a mistake: the underwriter working on the Robinsons' loan had erroneously double-counted their income. In Frank v. J.P. Morgan Chase Bank, N.A., No. 12 U.S.C. 1024.41, a regulation of RESPA that outlines loss mitigation procedures. 3d at 1014. After this missed payment, Nationstar assessed a late fee. 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. PDF NATIONSTAR MORTGAGE LLC, D/B/A MR. COOPER, Defendant. 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. Code Ann., Com. But, Nationstar is correct that Owens-Benniefield may Under the terms of the Settlement, if nothing else occurs in the litigation, then the Settlement will become effective 95 days from the date of that decision by the Court of Appeals. Law 13-303(4)-(5), 13-408. The Final Approval Order, approving the Class-wide Settlement, was entered December 11, 2020. First, to the extent that there was a period of time during which Nationstar failed to implement procedures to comply with RESPA, the facts establishing such a gap would be highly relevant to a pattern or practice determination and would be common in every case. "); see also 1 William Rubenstein et al., Newberg on Class Actions 2:3 (5th ed. In this photo illustration, the Nationstar Mortgage Holdings Inc. logo seen displayed on a smartphone. 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. Gunnells v. Healthplan Serv., Inc., 348 F.3d 417, 458 (4th Cir. This argument runs contrary to the plain language of Nationstar's own procedures, which describe the application as "complete" based on the processor's determination, leading to the referral of the complete package to an underwriter. 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. R. Civ. 2003). Id. The ruling serves as a reminder that Florida remains one of the top states for both mortgage fraud and lender errors. 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. Moreover, whether Nationstar engaged in a "pattern or practice" of Regulation X violations, within the meaning of 12 U.S.C. Code Ann., Com. 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. 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. cause[d] damages retroactively" and "transmogrifie[d]" the costs that predate the RESPA violation into damages. Co., 595 F.3d 164, 179 (4th Cir. 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. 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. at 152. Ohio 2014). at 358. 2601(a). 15-0925, 2015 WL 5165415, at *4 (D. Md. The Robinsons have not made any mortgage payments since January 2014 and have not been assessed any late fees since February 2014. 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. Law 13-316(c). P. 23(a)(4); Ward v. Dixie Nat'l Life Ins. Rules 19-303.4(b) (2018). This abandoned high school was converted into a 31-unit apartment building, number of unlawful practices in handling mortgages following the Great Recession. Northern District of Ohio, ohnd-1:2021-cv-00452 of 0 An error occurred while loading the PDF. Some courts have held that administrative costs that predate the alleged RESPA violation cannot constitute "actual damages." Nationstar Call Settlement Administrator. See id. But see Ayres v. Ocwen Loan Servicing, LLC, 129 F. Supp. 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. 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. 1024.41(c)(1)(ii), which requires a servicer to respond to a completed loan modification application; or Md. 1024.41(h)(1), (4). Code Ann., Com. Nationstar's reliance on Accrued Financial Services v. Prime Retail, Inc., 298 F.3d 291 (4th Cir. 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. The relevant rule prohibits an attorney from "offer[ing] an inducement to a witness that is prohibited by law." A "borrower" may enforce the provisions of Regulation X pursuant to 12 U.S.C. Robinson v. Nationstar Mortgage, LLC: Complaint with jury demand Date: September 9, 2019, Civil Action No. Cf. The Robinsons own a business called Green Earth Services, which provides waste and recycling services to clients. . If the initial application is complete, the substatus in Remedy Star is changed to refer the application to an underwriter for review, and an additional code is added in LSAMS. R. Civ. State attorneys general are here for homeowners, Raoul adds. If the Court approves the Settlement and it becomes final and effective, and you remain in the Settlement Class, you will receive a payment. Cal. Subsequent to the Court's approval, one of the objectors to the settlement filed an appeal. Fed. Courts have wide discretion to certify a class based on their familiarity with the issues and potential difficulties arising in class action litigation. Your Email Please enter your email. See id. 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. 2605(f)(1)(B), a borrower cannot recover these additional damages "without first recovering actual damages." However, the burden is on the plaintiffs to show that other class members exist and that their joinder is impracticable; a court may not rely on mere speculation that numerosity has been satisfied. P. 23(a)(2); Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). A plaintiff has the burden to show that all of the necessary prerequisites for a class action have been met. According to Oliver, if he used incorrect data, that was a result of the limited data fields and definitions provided to him. In addition to the fines and restitution, Delaware Attorney General Kathleen Jennings said the settlements require Nationstar to adhere to increased "servicing standards." 1024.41(a). Once the documents are received, the Remedy Star substatus and LSAMS code are changed again to mark the application complete. 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. See supra parts I.B.1, I.B.3, I.C.1. On February 10, 2022, the Court of Appeals issued a decision affirming the Final Approval Order. 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. Every mortgage has a unique loan number that can be used to identify the borrower and the loan in each of the four databases. "[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.'" Class Cert. The Robinsons assert that they have suffered damages in the lost opportunity to have their mortgage loan modified and to pursue other loss mitigation options; in the fees, late fees, and interest that Nationstar has assessed since they became delinquent on their loan; in the lost "time and effort" which they expended in "pursuing the loss mitigation process with Nationstar" rather than trying to improve their business; and in administrative costs, including "postage, travel expenses, photocopying, scanning, and facsimile expenses." Nationstar's Motion to Strike will be DENIED. 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. 12 U.S.C. In the case of Tony Robinson and Debra Robinson vs Nationstar Mortgage, LLC, the appeals court ruled that the lender did not actually have the right to foreclose on the property. McLean v. GMAC Mortg. 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." Gunnells, 348 F.3d at 427-28. 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. That is not so here. 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. And given that the class includes all borrowers who have submitted an application since January 10, 2014, joinder of all members is eminently impractical. Although she has worked as a bookkeeper for various companies, she was not employed between March and September 2014. 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.'" 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. 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. 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. 2605(f)(2) is not fatal to the predominance inquiry. Code Ann., Com. 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. is generally unproblematic as the non-injured parties can just be sorted out at the remedies phase of the suit."). Where a contingency fee arrangement for expert witnesses is not expressly prohibited by the Maryland Rules of Professional Conduct, the Court declines to find that the fee arrangement here constituted an ethical violation. It will be otherwise denied. 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. However, Nationstar did not comply with all requirements of Regulation X, which became effective on January 10, 2014. . The distinction is crucial. Code Ann., Com. Nationstar will need to enhance its policies and processes around how it handles consumer complaints, performs escrow analyses and conducts audits, for example. Bouchat, 346 F.3d at 522. 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. 2601-2617 (2012), specifically RESPA's implementing regulations known as "Regulation X," 12 C.F.R. 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. Sept. 29, 2021). 2015). Additional facts relevant to the pending motions are set forth below. The Robinsons also claim as damages interest overcharges of approximately $141,000. ; 78 Fed. 1024.41(c)(1)(ii), 1024.41(b)(1), the Court concludes that common computerized analysis will substantially advance the resolution of such claims, even if not entirely eliminating the need for reviewing certain specific file documents. In February 2014, after their income had further decreased, the Robinsons ceased making payments on the mortgage loan. v. DEMETRIUS ROBINSON; TAMARA ROBINSON, Plaintiffs - Appellees, v. . In their Motion for Class Certification, the Robinsons seek certification of two classes. See 12 C.F.R. at *5. While she is trained as a bookkeeper, at the time of the Robinsons' 2014 application for a loan modification and in the subsequent months, Mrs. Robinson was not employed in any capacity. 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. Plaintiffs "must present specific evidence to establish a causal link between the [servicer's] violation and their injuries." Make your practice more effective and efficient with Casetexts legal research suite. P. 23(a)(1). Nationstar further argues that the Robinsons cannot show that they suffered economic damages as a result of the violation of section 13-316. Mar. 164. "When these issues were identified several years ago, we immediately made restitution to our impacted customers and invested in process improvements to prevent reoccurrence," Jay Bray, CEO and chairman of Mr. Cooper said in a statement Monday. Robinson v. 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