Courts have wide discretion to certify a class based on their familiarity with the issues and potential difficulties arising in class action litigation. Thorn v. Jefferson-Pilot Life Ins. . PO Box 3560. The one-time consulting fee was paid in August 2013 to PaCE, a forensic loan auditor, to advise the Robinsons on how to communicate with Nationstar and to handle their loan. Mot. Here, the Robinsons have not put forward any evidence that Mrs. Robinson has an ownership interest in the home that would specifically obligate her to make payments on the loan. 2d 754, 768-69 (D. Md. 1990) (citing Universal Athletic favorably for this proposition). 12 C.F.R. 12 U.S.C. Therefore, the Court will grant in part and deny in part the Motion for Class Certification. 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. Gym, Recreational & Athletic Equip. If you were contacted on your cell phone by a company via an . Before the error was discovered, Mr. Robinson appealed this offer as insufficient on April 10, 2014. To the extent that, as Nationstar claims, such a determination could not be fully accomplished through computerized analysis alone, the resources needed to resolve this question would be even greater, such that the importance of having it resolved in a common fashion for all claims would be heightened. Plaintiffs Demetrius and Tamara Robinson (the "Robinsons") have resided in a home in Damascus, Maryland that has been subject to a mortgage loan. See Farber, 2017 WL 4347826 at 15; Billings, 170 F. Supp. R. Civ. These rights and optionsand the deadlines to exercise themare explained further on the Frequently Asked Questions page of this website and in the Notice. Joint Record ("MSJ JR") 0102. 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. Therefore, Nationstar was required to comply with section 1024.41 in processing it. 2d 873, 883 (D. Md. Law 13-101 to 13-411 (West 2015). TDC-14-3667, 2019 WL 4261696 (D. Md. The Robinsons have not made any mortgage payments since January 2014 and have not been assessed any late fees since February 2014. These events will be represented by discrete data points in Nationstar's databases, such that these violations may be proved through that data. Certification will not be granted as to the claims under 12 C.F.R. This assertion mischaracterizes the burden of proof in a civil case. "[A]n evaluation of the merits to determine the strength of plaintiffs' case is not part of a Rule 23 analysis." That notice must be provided within 30 days of receiving the complete loss mitigation application. 1993) (quoting Blum v. Yaretsky, 457 U.S. 991, 1001 n.13 (1982)). Similarly, since Mr. Robinson has not suffered injury under these provisions, he may not bring those claims on behalf of the class. Fed. 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. Several states also fined Nationstar in 2018 over failing to have proper procedures in place and "unfair and deceptive" mortgage modification policies. Id. 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. Nationstar's failings resulted in "substantial consumer harm," CFPB Director Kathleen Kraninger said in a statement. 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. 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. "There are going to be a lot of homeowners who need a home loan modification or other assistance," Raoul says. 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. Rather, the Court finds, based on the reasoning of Tagatz and Universal Athletic Sales, that the potential violation of an ethical rule does not itself make Oliver's testimony inadmissible. Appellate Win Affirms $3 Million Settlement in Class Action against Nationstar Mortgage - Tycko & Zavareei LLP Contact Us We look forward to hearing from you. Gunnells, 348 F.3d at 429 ("[T]he need for individualized proof of damages alone will not defeat class certification."). More importantly, while a determination of an individual violation would not require extensive analysis, specific proof of a pattern or practice of RESPA violations in any individual case would be a substantial undertaking, likely requiring the same type of complex analysis proposed here: a sampling of Nationstar files, compilation of all relevant data for such files, expert analysis to identify violations, and an assessment whether the identified violations are sufficient to establish a pattern or practice of violations. Whether an application is complete depends on the requirements of the investor who holds the loan. 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. The Robinsons and Nationstar then engaged in a series of tortured exchanges over the next several months. 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. LLC, No. 1024.41(i). . 1024.41(h)(1), (4). Mortgage servicers seek government aid as forebearance requests soar, How this 39-year-old earns $26,000 a year in California. A class action allows representative parties to prosecute not only their own claims, but also the claims of other individuals which present similar issues. 2010). 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. 2018); Renfroe v. Nationstar Mortg., LLC, 822 F.3d 1241, 1247 n.4 (11th Cir. 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. Code Ann., Com. 89, 90, ECF No. Id. But, Nationstar is correct that Owens-Benniefield may v. Nationstar Mortgage LLC. 1024.41(a). 2004). 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. 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. In Frank v. J.P. Morgan Chase Bank, N.A., No. The Robinsons appealed the Magistrate Judge's ruling because it did not require Nationstar to run a structural script for a third database. ("Opp'n') 13, ECF No. R. Evid. 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. 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. Accordingly, Nationstar did not send the Robinsons an acknowledgment letter within five days stating that it had received the application, as required by Regulation X. 2605(f)(1)(B), a borrower cannot recover these additional damages "without first recovering actual damages." 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. In response, on May 30, 2014, Mr. Robinson sent Nationstar the exact same application that he had submitted on March 7, 2014. The Magistrate Judge ordered Nationstar to run those scripts and return the electronic data to the Robinsons. 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." 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. 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. Once the documents are received, the Remedy Star substatus and LSAMS code are changed again to mark the application complete. 12 U.S.C. Ins. Code Ann., Com. In this photo illustration, the Nationstar Mortgage Holdings Inc. logo seen displayed on a smartphone. 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. Joint Record ("MCC JR") 0907. The entry under "objected" acts as a unique identifier for an electronic file, but it does not contain information about the file's substance and could in fact contain multiple submissions or documents relating to one borrower. Through both a declaration by a Nationstar Vice President of Default Servicing, Brandon Anderson, and an expert report by Stuart D. Gurrea, Nationstar contests Oliver's analysis and endeavors to establish that the only way to identify RESPA violations using Nationstar's data is through a file-by-file review. 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. Bouchat v. Balt. 2012). See Keen, 2018 WL 4111938, at *5-6. Id. A Scheduling Order was first entered on November 24, 2015, and the period for discovery was extended four times between November 2015 and January 2017. Under a provision of Regulation X entitled "Loss mitigation procedures," mortgage servicers must take certain steps when a borrower applies for loss mitigation measures, such as the loan modifications sought in this case. Stewart v. Bierman, 859 F. Supp. 3d 1011, 1015 (W.D. 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. These claims do not have to be factually or legally identical, but the class claims should be fairly encompassed by those of the named plaintiffs. 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. 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. If the loan servicer denies a loan modification application where the complete application was received more than 90 days before a foreclosure sale, the servicer must allow the borrower to appeal and must respond to the appeal within 30 days of receiving it by stating in writing whether the appeal was granted and a loan modification will be offered. Nationstar argues that summary judgment should be granted against Mrs. Robinson because she is not a "borrower" within the meaning of RESPA. loan" did not have standing to bring a RESPA claim); Nelson v. Nationstar Mortg. at 358. A plaintiff has the burden to show that all of the necessary prerequisites for a class action have been met. 1024.41(b)(1), which requires reasonable diligence in obtaining documents and information to complete a loss mitigation application; and Md. R. Evid. 1024.41(i). Signed by Magistrate Judge Jillyn K Schulze on 9/9/2016 . For the foregoing reasons, Nationstar's Motion for Summary Judgment will be GRANTED IN PART and DENIED IN PART. Class Certif. See id. 143. The Nationstar Mortgage Unwanted Phone Calls Class Action Lawsuit is Wright, et al. 12 U.S.C. The use of a class action is primarily justified on the grounds of efficiency, because it advances judicial economy to resolve common issues affecting all class members in a single action. Lembach v. Bierman, 528 F. App'x 297 (4th Cir. 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. Others, however, have concluded that "all expenses, costs, fees, and injuries fairly attributable to" a servicer's RESPA violation are damages, "even if incurred before the" violation, because the "wrongful act . Campbell v. Nationstar Mortg., 611 F. App'x 288, 297-98 (6th Cir. 2006). 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. Moreover, the conflict must not be "merely speculative or hypothetical." 3d 249, 266 (D. Md. The Motion will be otherwise denied. Md. R. Civ. MSJ JR 0284. 3d 254, 274-75 (S.D.N.Y. Furthermore, Nationstar's argument that the Robinsons are not typical largely recycles the same arguments made in the Motion for Summary Judgment. 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. ; 78 Fed. In focusing on whether RESPA violations can be established through computerized analysis rather than individual file review, the parties lose track of the fact that because statutory damages are predicated on a finding that there has been a pattern or practice of RESPA violations, that issue common to almost any individual claim plays an outsized role in the predominance analysis. Make your practice more effective and efficient with Casetexts legal research suite. 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. Nationstar will need to enhance its policies and processes around how it handles consumer complaints, performs escrow analyses and conducts audits, for example. In its Motion to Strike, Nationstar argues that Oliver's methodology has not been peer reviewed, has a high error rate because he used the wrong data fields to identify the dates of events, failed to consider the timing of foreclosure sales relative to the dates of the submission of loan modification applications, and did not propose a specific methodology for calculating damages. Oliver's expert report focuses on the use of Nationstar's internal databases to determine whether Nationstar has systematically failed to comply with various requirements of Regulation X. cause[d] damages retroactively" and "transmogrifie[d]" the costs that predate the RESPA violation into damages. 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. 17-0982, 2018 WL 4111938, at *5-6 (M.D. Code Ann., Com. 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. May 31, 2016), the plaintiff had signed the deed of trust but not the promissory note but was nevertheless deemed to have standing because she had owned the home with a right of survivorship with her deceased husband, who had signed the note. Because all of the Rule 23(a) and (b)(3) requirements are met as to a class asserting violations of 12 C.F.R. 1972). Auto. Section 13-316(c) governs "mortgage servicing" and, among other requirements, provides that a "servicer shall designate a contact to whom mortgagors may direct complaints and inquiries" and that the "contact shall respond in writing to each written complaint or inquiry within 15 days if requested." Sep. 9, 2019). See MCC JR0529-31. Id 1024.41(c)(1). See Fed. However, Nationstar did not comply with all requirements of Regulation X, which became effective on January 10, 2014. application to Nationstar after January 10, 2014, and through the date of the Court's . Delaware Attorney General Kathleen Jennings said the settlements, Several states also fined Nationstar in 2018, Kwame Raoul, attorney general of Illinois, latest research from the Mortgage Bankers Association. 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. Rules Prof'l Conduct 3.4 cmt. 20-cv, -2202, 2021 WL 4462909, at *1 (S.D. 2d 452, 468 (D. Md. 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. More Information The fee arrangement will be considered as an issue potentially affecting the credibility, rather than the admissibility, of the expert testimony. At different stages in the processing of a loan modification application, Nationstar employees enter certain codes into certain databases, and certain information can be stored and accessed through those applications. 15-05811, 2016 WL 3055901 (N.D. Cal. Regulation X went into effect on January 10, 2014. Id. Nationstar ultimately became the servicer of the Robinsons' loan. 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. 2605(f). Marchese v. JPMorgan Chase Bank, N.A., 917 F. Supp. A "borrower" may enforce the provisions of Regulation X pursuant to 12 U.S.C. Every mortgage has a unique loan number that can be used to identify the borrower and the loan in each of the four databases. 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. Rather than rendering the testimony inadmissible, the fee arrangement is relevant to the expert's credibility. For the Regulation X provisions that require the servicer to communicate specific information to a borrower, Oliver's methodology involves reviewing a sample of loan files and identifying a specific communication to a borrower based on the file name. . Nationstar also allegedly foreclosed on borrowers with pending forbearance applications after promising not to do so and failed to properly handle escrow payments and accounting for homeowners who were in Chapter 13 bankruptcy proceedings. 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. R. Civ. 2605(f)(1). Mrs. Robinson was the primary point of contact for the Robinsons in interacting with Nationstar. 16-0117, 2017 WL 4347826, at *15 (D. Md. If the settlements are approved by the D.C. district court, Nationstar will be required to immediately set aside about $15.6 million to pay borrowers it has not yet remediated. Instead, the Robinsons assert that Nationstar has not affirmatively proven that it conducted such reviews. Additional facts relevant to the pending motions are set forth below. 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. After this missed payment, Nationstar assessed a late fee. Discovery Order, ECF No. 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] . "Mortgage servicers are entrusted with handling significant financial transactions for millions of Americans, including struggling homeowners. Code Ann., Com. Universal Athletic Sales Co. v. Am. An expert's testimony is "critical" where it is "important to an issue decisive for the motion for class certification." Nationstar asserts that Oliver's testimony should be stricken because this fee arrangement includes an unethical contingency fee. Cal. 2013)). 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. 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. 2002) (affirming without addressing the propriety of the striking of the expert testimony). 1024.41(a). Co., 350 F.3d 1018, 1023 (9th Cir. In contrast, Nationstar maintains that there is no way to reliably identify when a loss mitigation application is submitted or complete using codes and status change entries in its existing software, and that the only way to make those determinations is through a file-by-file review. See Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349, 356-57 (3d Cir. 164. Ask to speak in court about the fairness of the Settlement. Indeed, Mr. Robinson testified that Mrs. Robinson did not sign the Note because she did not purchase the property with him. Order, ECF No. Since the MCPA and Regulation X allow recovery only of "economic damages," Md. at 152. After attempts to modify their 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. Id. 19-303.4 cmt.3. Id. 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. Rules 19-303.4(b) (2018). See Broussard, 155 F.3d at 344. The servicer "is liable for any economic damages caused by the violation." Nationstar's Motion for Summary Judgment will be granted as to Tamara Robinson. Under Count I, the Robinsons allege a violation of 12 C.F.R. Nationstar correctly notes that the Robinsons have not identified a false or misleading statement or representation by Nationstar in the record. Nationstar employees use four software applications and databases to store and track electronic information relating to loans: (1) Loan Services and Accounting Management System ("LSAMS"), Nationstar's primary loan servicing software, which contains data for loans, including the permanent records of the accounting history, communication logs, and letters documented with codes that were sent to the borrower; (2) Remedy Star, Nationstar's proprietary loss mitigation and loan modification management system, which, among other tasks, tracks the status and timeline of a loan modification and links to documents stored in FileNet; (3) LPS Desktop ("LPS"), an application which Nationstar uses to track and manage foreclosure processes and communicate with outside attorneys; and (4) FileNet, a platform that houses PDF images of documents, including letters sent to borrowers by Nationstar. The Nationwide Class and the Maryland Subclass are ascertainable and satisfy the Rule 23(a) factors. Law 13-301 and 303. Id. 26-1. . In February 2014, after their income had further decreased, the Robinsons ceased making payments on the mortgage loan. 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." Subscribe to our free newsletter right now. 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. 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.