. 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. The Robinsons and Nationstar then engaged in a series of tortured exchanges over the next several months. Portland, OR 97208-3560. Write to the Court if you do not like the Settlement. 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. 2010) (holding that a plaintiff who "was not a borrower or otherwise obligated on the . See id. Notably, Oliver's analysis did not consider foreclosure information because the data produced did not include dates of foreclosure sales. 2006). Code Ann., Com. Rule 702 permits an expert to testify if the testimony "will help the trier of fact to understand the evidence or to determine a fact in issue," "is based on sufficient facts or data," and "is the product of reliable principles and methods," and if the expert has "reliably applied the principles and methods to the facts of the case." Plaintiff and Class Representative Demetrius Robinson, along with Class Counsel Tycko & Zavareei LLP and The Bestor Law Firm, respectfully move this Court for an award of $1,300,000 in reasonable attorneys' fees and expenses, as well as a $5,000 service award for Mr. Robinson. Subsequent Loss Mitigation Application. The fact that each borrower must individually show damages under 12 U.S.C. Code Ann., Com. Class litigation would also promote consistent results on the common question whether Nationstar engaged in a pattern or practice of violating Regulation X and would provide Nationstar with finality and closure on that issue. The language of the regulation states not that a loan servicer must comply with Regulation X's requirements only for a borrower's first loss mitigation application, but that a loan servicer must "comply with the requirements" only "for a single complete loss mitigation application." 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. 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. 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. Where the deed of trust explicitly states that Mrs. Robinson is not obligated on the loan, the Court finds that she is not a borrower under RESPA and cannot bring the claim against Nationstar under Regulation X. Nationstar to pay $91 million to settle claims of it harmed - CNBC Law 13-316(c), which requires a response to a mortgage servicing complaint or inquiry within 15 days. That claim will be subject to common proof, namely sampling and analysis of loan files along the lines suggested by Oliver. at 983 (quoting 12 U.S.C. 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. 3d 1011, 1015 (W.D. See Farmer v. Ramsay, 159 F. Supp. Home [robinsonsettlement.com] Compl. 2003) ("[I]f Lierboe has no stacking claim, she cannot represent others who may have such a claim, and her bid to serve as a class representative must fail. Signed by Judge Theodore D. Chuang on 8/18/2015. Id. Although each class member must individually show that they suffered "actual damages" under 12 U.S.C. See D. Md. It is the plaintiffs who bear the burden of proving their claims. J. Specifically, the loan servicer failed to honor borrowers' loan modification agreements. 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. Id. 1024.41(i). 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"). "); cf. 2605(f)(1)(B), a borrower cannot recover these additional damages "without first recovering actual damages." That notice must be provided within 30 days of receiving the complete loss mitigation application. 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. Several states also fined Nationstar in 2018 over failing to have proper procedures in place and "unfair and deceptive" mortgage modification policies. JA 130. Cal. 218. 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. Code Ann., Com. Filing fee paid $ 402, Receipt number AOHNDC-10680087. 14-cv-10457, in the U.S. District Court for the Northern District of Illinois, Eastern Division.. Join a Free TCPA Class Action Lawsuit Investigation. Co., 595 F.3d 164, 179-80 (4th Cir. Id. The MCPA prohibits the use of an "unfair or deceptive trade practice" in the "[t]he extension of consumer credit" or "[t]he collection of consumer debts" and provides for a private right of action. P. 23(a)(1). 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. 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. The Robinsons do not address this argument in their Opposition. 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. 1024.41(i). Neither the rule nor the comment, however, state whether Maryland is one such jurisdiction. Md. 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. Finally, Nationstar argues that summary judgment should be entered on the RESPA claims because the Robinsons cannot establish that they have suffered actual damages as a result of Nationstar's violations of Regulation X. Law 13-316(c). A borrower may enforce violations of these provisions through a private cause of action pursuant to 12 U.S.C. 1024.1 to 1024.41 and known as "Regulation X," see 12 C.F.R. R. Civ. 1024.41(h)(1), (4). In assessing this element, "numbers alone are not controlling" and a district court should consider "all of the circumstances of the case." "There are going to be a lot of homeowners who need a home loan modification or other assistance," Raoul says. Indeed, Mr. Robinson testified that Mrs. Robinson did not sign the Note because she did not purchase the property with him. The commonality requirement is also met. 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). According to Oliver, if he used incorrect data, that was a result of the limited data fields and definitions provided to him. Where Accrued Financial addresses a different scenario with a different remedy, the Court does not find that it requires that the testimony of an expert witness paid on contingency fee basis must be excluded. 2014). Id. 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. Id. Order at 2, ECF No. 2010). Class Cert. The CFPB estimates about 40,000 borrowers were harmed by Nationstar's allegedly unfair and deceptive practices, according to a statement released Monday. Since the MCPA and Regulation X allow recovery only of "economic damages," Md. Nationstar's Motion to Strike will be DENIED. After an additional period of expert discovery relating to the class certification motion, discovery closed on December 30, 2018. The Class is represented by Rafey S. Balabanian of Edelson PC. 2010). RESPA's implementing regulations, codified at 12 C.F.R. 2605(f)(1)(A); see 12 C.F.R. EQT Prod. Accordingly, Nationstar's Motion for Summary Judgment will be granted as to the MCPA claims under sections 13-301 and 13-303. Accordingly, the Motion is denied as to such claims. 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. 2015) Court Description: MEMORANDUM OPINION. Before the error was discovered, Mr. Robinson appealed this offer as insufficient on April 10, 2014. See Stillmock, 385 F. App'x at 274 ("[T]here is no reasoned basis to conclude that the fact that an individual plaintiff can recover attorney's fees in addition to statutory damages of up to $1,000 will result in enforcement of [the Fair Credit Reporting Act] by individual actions of a scale comparable to the potential enforcement by way of class action."). Ass'n, 375 F.2d 648, 653 (4th Cir. 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." 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. 1024.41(h)(1). Md. 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. Id. Once an underwriter is assigned, that employee double-checks whether the application contains all required documentation and is complete. 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. When Nationstar received the application, it prevented late fees from being assessed and put a hold on any foreclosure proceedings. 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. 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." Code Ann., Com. However, Nationstar did not comply with all requirements of Regulation X, which became effective on January 10, 2014. Thorn v. Jefferson-Pilot Life Ins. 2018). 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." 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. Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act ("Regulation X"), 78 Fed. 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. The Final Approval Order, approving the Class-wide Settlement, was entered December 11, 2020. P. 23(a)(4); Ward v. Dixie Nat'l Life Ins. CFPB Director Kathleen Kraninger said in a statement. 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. "[A]n evaluation of the merits to determine the strength of plaintiffs' case is not part of a Rule 23 analysis." Id. 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. at 248-49. See Tagatz, 861 F.2d at 1042. 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. 1024.41(a). the same interest in establishing the liability of defendants." They have claimed $141,000 in interest; $6,147.12 in fees assessed by Nationstar; $2,275 in consulting fees; $50.58 in administrative costs; and lost time and labor of approximately 120 hours; as well as punitive and statutory damages. Many impacted consumers have already received refunds and more will be contacted by the settlement administrator in the coming weeks. The Court may rely only on facts supported in the record, not simply assertions in the pleadings. The relevant rule prohibits an attorney from "offer[ing] an inducement to a witness that is prohibited by law." 12 C.F.R. Maryland's Commissioner of Financial Regulation Announces Settlement Relevant factual and procedural background is set forth in the Court's prior Memorandum Opinion granting in part and denying in part Nationstar's partial Motion to Dismiss. Based on his experience and review of deposition transcripts of Nationstar employees, Oliver asserts that Nationstar has computerized data from which RESPA violations may be identified, not least because Nationstar must be able to demonstrate its compliance with RESPA to regulators. News Ask a Lawyer More Information PO Box 3560. Your Email Please enter your email. THEODORE D. CHUANG United States District Judge. That provision provides, in parallel, that a loan servicer which does not comply with Regulation X is liable "to the borrower." CFPB Takes Action Against Nationstar Mortgage for Flawed Mortgage Loan 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. Ass'n, No. At this stage of the proceedings, the Court must rely on facts in the record, and not assertions in the pleadings. 12 C.F.R. The settlement in the form of a consent judgment, filed in the U . 1024.41 Md. Sept. 9, 2019), there were multiple other claims at issue, for which Oliver's expert report seemed better suited to address. 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. Nationstar argues that summary judgment should be granted against Mrs. Robinson because she is not a "borrower" within the meaning of RESPA. 2014))). 1024.41(b)(1), (b)(2)(i)(B), and (c)(1)(ii) and Md. 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. 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. 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. 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. USCA4 Appeal: 21-1087 Doc: 38 Filed: 06/15/2021 Pg: 9 of 33 Wesleyan Coll. See supra parts I.B.1, I.B.3, I.C.1. See Lierboe v. State Farm Mut. 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. But see Ayres v. Ocwen Loan Servicing, LLC, 129 F. Supp. 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 . In Accrued Financial, the United States Court of Appeals for the Fourth Circuit held that where commercial real estate tenants assigned their potential claims against their landlords to a commercial real estate auditor under an arrangement through which the auditor would receive a percentage of any recovery in litigation, the assignments violated public policy because where the auditor's employees could testify in such litigation, the assignments "provide for supplying expert testimony for a contingent fee." The next day, Nationstar sent a letter noting that the August 25 application had been received and requesting additional information. TDC-14-3667 (D. Md. 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. Similarly, since Mr. Robinson has not suffered injury under these provisions, he may not bring those claims on behalf of the class. 1024.41(b)(2)(B), (c)(1)(ii); Md. 12 C.F.R. . 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. 3d 254, 274-75 (S.D.N.Y. See Robinson v. Nationstar Mortg. The first of these prerequisites is that the class must exist and be "readily identifiable" or "ascertainable" by the court through "objective criteria." Fed. 2605(f). ("Opp'n') 13, ECF No. These rights and optionsand the deadlines to exercise themare explained further on the Frequently Asked Questions page of this website and in the Notice. Aug. 19, 2015). 2003). The Robinsons own a business called Green Earth Services, which provides waste and recycling services to clients. 3d at 1014. 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. Thus, Mrs. Robinson is not "obligated" to pay the amount due on the Note and therefore is not a "borrower" for purposes of RESPA. In their Motion for Class Certification, the Robinsons seek certification of two classes. v. W.R. Grace & Co., 6 F.3d 177, 188 (4th Cir. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. All but $28.6 million of its. 2601-2617 (2012), specifically RESPA's implementing regulations known as "Regulation X," 12 C.F.R. Nationstar's claim that the above-described coding is not dispositive, because an underwriter could subsequently determine that more information was needed after all, is not persuasive. 1990) (citing Universal Athletic favorably for this proposition). Since the Court has already concluded that Nationstar is entitled to summary judgment on the Robinsons' claims under 12 C.F.R. For the requirements that hinge on the timing of a communication or response, Oliver's methodology consists of using Nationstar's data from the LSAMS and FileNet software applications relating to a sample of 400 loans to identify the dates when certain events occurredsuch as the filing of a loan modification application, when a loan modification application became complete, and the sending of an acknowledgment or decision letter to a borrowerand then counting the days between the dates to assess whether a RESPA timing requirement was satisfied. See id. Moreover, because borrowers often submit multiple loan modification applications, and because Nationstar's data is stored at the loan level, not at the application level, Nationstar claims that it is not possible to tell from the data alone, without reviewing the files, whether a status or code change is in response to a specific loan modification application. Summ. Wirtz v. Specialized Loan Servicing, LLC, 886 F.3d 713, 719-20 (8th Cir. Plaintiffs "must present specific evidence to establish a causal link between the [servicer's] violation and their injuries." P. 23(a)(2); Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). 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. 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. Anderson, 477 U.S. at 248. Regulation X's effective date reflected "an intent not to apply it to conduct occurring prior to that date." Id. Id. On May 5, 2014, Nationstar asked the Robinsons for additional information to evaluate the appeal, including documents to verify their income. 1024.41(f), (g), and (h), and Md. 09-08213, 2011 WL 11651320 (C.D. MCC JR 0003. 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. 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. See, e.g. "Mortgage servicers are entrusted with handling significant financial transactions for millions of Americans, including struggling homeowners. Id. Presently pending is Nationstar's Motion for Summary Judgment, Nationstar's Motion to Strike, and the Robinsons' Motion for Class Certification. In this photo illustration, the Nationstar Mortgage Holdings Inc. logo seen displayed on a smartphone. An "unfair or deceptive" trade practice includes a "false . A Division of NBC Universal. at *5. Fed. Nationstar also asserts that the Robinsons have not identified evidence sufficient to support their MCPA claims. 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. Ask to speak in court about the fairness of the Settlement. The Court will therefore deny the Motion for Summary Judgment as to this argument. 1024.41(b)(2)(i)(B) and Md. R. Civ. 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. A separate Order shall issue. 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. Id. Nationstar will need to enhance its policies and processes around how it handles consumer complaints, performs escrow analyses and conducts audits, for example. 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.
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