Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403 (1977))). Before the error was discovered, Mr. Robinson appealed this offer as insufficient on April 10, 2014. While class members would not be eligible for statutory damages unless actual damages are shown, see 12 U.S.C. 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. 2012) (citing Lloyd v. Gen. Motors Corp., 916 A.2d 257, 277 (Md. which has the capacity, tendency, or effect of deceiving or misleading consumers." . Parties, docket activity and news coverage of federal case Robinson et al v. Nationstar Mortgage LLC, case number 8:14-cv-03667, from Maryland Court. 1024.41(f), (g). Mot. 15-05811, 2016 WL 3055901 (N.D. Cal. 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. 1024.41(f), (g), and (h); and (4) there is no evidence of actual damages from any RESPA violation. 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. 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. That's one reason why the settlement, particularly the provisions requiring Nationstar to adhere to enhanced standards, is crucial. The first of these prerequisites is that the class must exist and be "readily identifiable" or "ascertainable" by the court through "objective criteria." 1998). 2001) (striking expert testimony because of a contingent fee arrangement), aff'd, 43 F. App'x 547 (4th Cir. 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. See 12 C.F.R. Although she has worked as a bookkeeper for various companies, she was not employed between March and September 2014. 2017) (holding that "incidental costs related to the sending of correspondence" to the servicer, including "postage and travel," are not actual damages under RESPA because such a rule "would transform virtually all unsatisfactory borrower inquiries into RESPA lawsuits"). An 85-year Harvard study found the No. Commonality requires that a class have "questions of law or fact common to the class" which are capable of classwide resolution, such that the determination of the truth or falsity of the common issue "will resolve an issue that is central to the validity of each one of the claims in one stroke." Check out:Covid-19 pandemic is the first time 40% of Americans have experienced food insecurity, Don't miss:Amex Blue Cash Preferred is offering an elevated welcome bonus for a limited time, Get Make It newsletters delivered to your inbox, Learn more about the world of CNBC Make It, 2023 CNBC LLC. If a borrower is experiencing issues or not getting the help needed, contact your state attorneys general. Regulation X, which became effective on January 10, 2014, 78 Fed. At this juncture, this allegation plausibly supports a finding of willful noncompliance. Id. An "unfair or deceptive" trade practice includes a "false . In Baez v. Specialized Loan Servicing, LLC, 709 F. App'x 979 (11th Cir. 12 U.S.C. The Robinsons do not address this argument in their Opposition. 2013)). 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. A class action allows representative parties to prosecute not only their own claims, but also the claims of other individuals which present similar issues. Law 13-303(4)-(5), 13-408. Specifically, the application itself would have to be reviewed to determine when it was stamped as received by Nationstar. 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. 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. 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. Ward, 595 F.3d at 180 (quoting Gunnells, 348 F.3d at 430). Regulation X went into effect on January 10, 2014. 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. 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. Under subsection (h), if a loan servicer receives a complete loss mitigation application more than 90 days before a foreclosure sale but then denies the application, the servicer must allow the borrower to appeal and must respond to the appeal within 30 days of receiving it. 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. Law 13-301(1). 28, 2017). Mr. Robinson's counsel is experienced in complex civil litigation and class action litigation. On November 21, 2014, the Robinsons filed suit against Nationstar on behalf of themselves and a class of similarly situated individuals nationwide. Sept. 2, 2015). Notably, Oliver's analysis did not consider foreclosure information because the data produced did not include dates of foreclosure sales. 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 comments to that rule state that the "common law rule in most jurisdictions is . In Robinson v. Nationstar Mortgage LLC, No. . Code Ann., Com. Law 13-316(e), for the reasons stated above, see supra part I.B.4, the Robinsons have provided sufficient evidence to create a genuine issue of material fact whether they have suffered economic damages, in the form of administrative costs, fees, and interest. Md. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). 2005))). He asserted that the amount of fees was calculated based on Nationstar's statements, but he could not specify the nature of the fees. 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. The Class Action Administrator would then begin distribution of the settlement funds. Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. Finally, the Court finds that Mr. Robinson will adequately represent the absent class members. 1988) (distinguishing between a rule of professional conduct and admissibility of evidence); cf. McLean v. GMAC Mortg. 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. Law 13-316(c). See supra parts I.B.1, I.B.3, I.C.1. 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. 12 U.S.C. See Tyson Foods, 136 S. Ct. at 1046-47 (holding that representative sampling was a permissible method to prove whether time spent donning and doffing gear resulted in violations of the Fair Labor Standards Act). . 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. Since the MCPA and Regulation X allow recovery only of "economic damages," Md. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 348-49 (2011) ("[A] class representative must be part of the class and possess the same interest and suffer the same injury as the class members." 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." Law 13-316(c) are triggered upon the submission of a loss mitigation application, while 12 C.F.R. JA 130. This Court previously held that a loan modification application can be an inquiry under the MCPA that triggers a duty to respond, and that in the case of the Robinsons, the loan modification application that was "submitted at the request of Nationstar[] necessarily seeks a response." "); see also 1 William Rubenstein et al., Newberg on Class Actions 2:3 (5th ed. Sept. 9, 2019), there were multiple other claims at issue, for which Oliver's expert report seemed better suited to address. 89, 90, ECF No. Co., 595 F.3d 164, 179 (4th Cir. Once the documents are received, the Remedy Star substatus and LSAMS code are changed again to mark the application complete. On September 9, 2014, Nationstar sent Mr. Robinson a letter denying the loan modification application and stating that it could not offer him any modification because his income was not high enough to cover the mortgage payments under any modification option. Va., Inc., 543 F.2d 1075, 1080 (4th Cir. Furthermore, Nationstar's argument that the Robinsons are not typical largely recycles the same arguments made in the Motion for Summary Judgment. Id. This assertion mischaracterizes the burden of proof in a civil case. 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. Life Ins. For the foregoing reasons, Nationstar's Motion for Summary Judgment will be GRANTED IN PART and DENIED IN PART. 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. Id. 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. 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. P. 23(b)(3). "Since then, we have continued to invest in technology, people, and leadership to ensure that our compliance and risk management programs not only meet our regulators' expectations but also support sustainable growth and maintain our position as an industry leader.". Ohio 2014). From January 2014 to the present, the Robinsons have not pursued other loss mitigation options, such as a short sale. 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. Cent. 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. 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. (2012), and the Maryland Consumer Protection Act ("MCPA"), Md. 2601-2617 (2012), specifically RESPA's implementing regulations known as "Regulation X," 12 C.F.R. The regulation is silent on whether a loss mitigation application submitted before January 10, 2014 could qualify as the "single complete loss mitigation application." Code Ann., Com. This abandoned high school was converted into a 31-unit apartment building, number of unlawful practices in handling mortgages following the Great Recession. 877-683-9363. Id. 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. 2003). In the Amended Complaint, the Robinsons claim that Nationstar's representations that it offered many loss mitigation plans and "would evaluate" borrowers "for eligibility for all these loss mitigation plans" were false. . Id. 12 U.S.C. 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. Fed. The Robinsons have not made any mortgage payments since January 2014 and have not been assessed any late fees since February 2014. Date: September 9, 2019, Civil Action No. Certification will also be denied as to the claim under 12 C.F.R. . Nationstar said in a statement that its settlements were based on "loan-servicing practices" that the company used between 2010 and 2015 and has since discontinued. Nationstar ultimately became the servicer of the Robinsons' loan. RESPA's implementing regulations, codified at 12 C.F.R. 1024.1, prescribe additional duties and responsibilities of mortgage servicers under RESPA. Fla. 2009), aff'd, 398 F. App'x 467, 471 (11th Cir. . or other representation . The distinction is crucial. Therefore, the Court will grant in part and deny in part the Motion for Class Certification. 1024.41(c)(1)(i). 2014))). In response, on May 30, 2014, Mr. Robinson sent Nationstar the exact same application that he had submitted on March 7, 2014. 1024.41(b)(1), (b)(2)(i)(B), and (c)(1)(ii) and Md. Reg. Summ. On February 16, 2017, the Court referred the case to United States Magistrate Judge Charles B. 15-3960, 2017 WL 623465, at *8 (D. Md. Code Ann., Com. 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. Robinson et al v. Nationstar Mortgage LLC, No. 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. 2605(f)(1). "There are going to be a lot of homeowners who need a home loan modification or other assistance," Raoul says. (quoting 7AA Charles Allan Wright et al., Federal Practice and Procedure 1778 (3d ed. at 359-60. 1024.41 (2019), and the Maryland Consumer Protection Act ("MCPA"), Md. The record is undisputed that as of September 25, 2017, Nationstar had neither started foreclosure proceedings nor moved for foreclosure judgment on the Robinsons' home. Code Ann., Com. As to the third denial on November 7, 2013, Nationstar informed the Robinsons that the loan modification application was denied because the mortgage loan was not in default. 3d 712, 728 (S.D. 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. that it is improper to pay an expert witness a contingent fee." In support of these claims, Mr. Robinson testified in his deposition that the $141,000 in interest represents the amount that the Robinsons have been overcharged over the life of the loan. Nationstar Call Settlement Administrator. MCC JR 318, 530-531. Because such information is stored electronically and based on objective criteria, the members of the class will be ascertainable without significant administrative burden. 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. 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. 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. Finally, to the extent that Oliver did not execute his stated methodology for identifying damages, that limitation is again based in part on Nationstar's failure to make relevant data available to him. 2605(f). If you were contacted on your cell phone by a company via an . The trial court granted the motion over the Robinsons' objection, noting in its order that Nationstar had now waived its claim for attorney feesthe claim that had been the sole impediment to a final judgment being entered after the trial court granted Nationstar's request to reopen the evidence after entry of the initial final judgment. at 300. State attorneys general are here for homeowners, Raoul adds. Order, ECF No. 13-316(e)(1). 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. Some of the alleged damages are not supported in law or in fact. ("MCC") 2, ECF No. 1024.41(b)(2)(B). Although based on imperfect data, Oliver's expert report reveals that such analysis can substantially address whether Nationstar violated 12 C.F.R. 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. Local R. 105.6. See 12 C.F.R. R. Evid. Whether an application is complete depends on the requirements of the investor who holds the loan. Subscribe to our free newsletter right now. P. 23(b)(3). 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. 2004). 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. The Magistrate Judge ordered Nationstar to run those scripts and return the electronic data to the Robinsons. Nationstar argues that summary judgment should be granted against Mrs. Robinson because she is not a "borrower" within the meaning of RESPA. 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] . 1024.41(i). Likewise, he concluded that for approximately 53 percent of sampled loans, Nationstar failed to comply with the requirement of acknowledging receipt of the application within five days. Filed by Janie Robinson. Sept. 29, 2017); Billings v. Seterus, Inc., 170 F. Supp. If more documents are required, then the same Remedy Star substatus and LSAMS code that denote missing documents are entered. 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. Although the Robinsons contend that they would have pursued other loss mitigation options in the absence of the RESPA violations, they have not identified any such options in a way that would permit a calculation of damages associated with any lost opportunity. 14-3667, 2015 WL 4994491, at *1-2 (D. Md. See D. Md. 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). If the application is denied, a notice to that effect is sent to the borrower. 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." Nationstar asserts that Oliver's testimony should be stricken because this fee arrangement includes an unethical contingency fee. 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. Signed by Judge Theodore D. Chuang on 8/18/2015. v. DEMETRIUS ROBINSON; TAMARA ROBINSON, Plaintiffs - Appellees, v. . uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results." Furthermore, determining whether statutory damages are available will require no individualized consideration, because the pattern-or-practice claim "would be based solely on" Nationstar's conduct and can be established through sampling. To view the settlement agreement and consent order, please visit the CSBS's website. 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. 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. Ins. 1967). 1987) (holding, in the context of an informant who is paid a contingent fee, that the fee should be treated "as a credibility factor"). Gym, Recreational & Athletic Equip. 1024.41(f), (g), and (h), and Mr. Robinson's MCPA claim under sections 13-301 and 13-303. The economic challenges and burdens that homeowners currently face are similar to the ones experienced following the Great Recession. 1024.41(b)(1). 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. or misleading oral or written statement . See Baby Neal for and by Kanter v. Casey, 43 F.3d 48, 56-57 (3d Cir. 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.
