Accordingly, a loan servicer must comply with Regulation X as to the first loss mitigation application submitted after the effective date. In addition, Nationstar asserts that not all loan modification applications referred to an underwriter are complete. 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. These events will be represented by discrete data points in Nationstar's databases, such that these violations may be proved through that data. v. W.R. Grace & Co., 6 F.3d 177, 188 (4th Cir. 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. Congress enacted RESPA to protect consumers from "unnecessarily high settlement charges caused by certain abusive practices" in the real estate mortgage industry, and to ensure "that consumers throughout the Nation are provided with greater and more timely information on the nature and costs of the settlement process." See, e.g. In Frank, due to the state's community property laws, the mortgage was "a community debt," and after her husband died, the plaintiff "was therefore obligated to make the loan payments" because of her interest in the home. If more documents are required, then the same Remedy Star substatus and LSAMS code that denote missing documents are entered. 1024.1 to 1024.41 and known as "Regulation X," see 12 C.F.R. At this juncture, this allegation plausibly supports a finding of willful noncompliance. Since it is the plaintiff's burden to establish that the requirements of Rule 23 have been met and Mr. Robinson has failed to do so, the Motion for Class Certification will be denied as to any claims that Nationstar violated 12 C.F.R. See Stillmock v. Weis Markets, Inc., 385 F. App'x 267, 275 (4th Cir. In addition to the fines and restitution, Delaware Attorney General Kathleen Jennings said the settlements require Nationstar to adhere to increased "servicing standards." See Robinson v. Nationstar Mortg. Rather than rendering the testimony inadmissible, the fee arrangement is relevant to the expert's credibility. The Nationwide Class and the Maryland Subclass are ascertainable and satisfy the Rule 23(a) factors. These fees allegedly violated the Fair Debt Collection Practices Act and the Washington state Collection Agency Act. 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. He is joined by 49 other Attorneys General, the District of Columbia, and other state and federal agencies. 1984), and has upheld the certification of a class with as few as 18 members, Cypress v. Newport News Gen. & Nonsectarian Hosp. They have a home in Damascus, Maryland purchased by Demetrius Robinson ("Mr. Robinson"). 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. 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 that the company failed to honor mortgage forbearance agreements and unfairly foreclosed on homeowners. Filed by Janie Robinson. Sept. 9, 2019), there were multiple other claims at issue, for which Oliver's expert report seemed better suited to address. 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. Mot. Gunnells, 348 F.3d at 427-28. 2605(f)(2), "Rule 23 contains no suggestion that the necessity for individual damage determinations destroys commonality, typicality, or predominance, or otherwise forecloses class certification." Appellate Win Affirms $3 Million Settlement in Class Action against Nationstar Mortgage - Tycko & Zavareei LLP Contact Us We look forward to hearing from you. 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. 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. Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403 (1977))). Discovery Order, ECF No. 1024.41(i). Rules 19-303.4(b) (2018). See id. R. Evid. Code Ann., Com. Regulation X went into effect on January 10, 2014. 1024.41 . Those claims arose from Nationstar's alleged P. 23(a)(1). Your Email Please enter your email. 1024.41(b)(2)(B). Sep. 9, 2019). 10696, 10708 (Feb. 14, 2013) (codified at 12 C.F.R. 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. Similarly, since Mr. Robinson has not suffered injury under these provisions, he may not bring those claims on behalf of the class. Claim Your Cash Every Week! For a class action brought for violations of Regulation X, a servicer is liable for "actual damages to each of the borrowers in the class" and, upon a finding of a "pattern or practice" of noncompliance, statutory damages amounting to a maximum of $2,000 per class member up to a total of the lesser of $1 million or one percent of the servicer's net worth. After March 2014, Mrs. Robinson was primarily responsible for communicating with Nationstar and PaCE. In Baez v. Specialized Loan Servicing, LLC, 709 F. App'x 979 (11th Cir. Code Ann., Com. 2002), is misplaced. Compl. Id. 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. JA 130. 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. Id. Fed. If a borrower is experiencing issues or not getting the help needed, contact your state attorneys general. Wirtz v. Specialized Loan Servicing, LLC, 886 F.3d 713, 719-20 (8th Cir. Here, Mrs. Robinson signed the Deed but did not sign the Note. In addition to the fee paid to PaCE, the Robinsons also assert as damages $50.58 in administrative costs, specifically postage fees for sending information relating to their loan modification application to Nationstar, and 120 hours of time expended on the loan modification process. For purposes of ascertainability, the requirements of 12 C.F.R. In their memorandum in opposition to the Motion for Summary Judgment ("Opposition"), the Robinsons admit that they "do not have evidence that Nationstar dual tracked them" or began foreclosure proceedings while a loan modification application was pending. Co., 350 F.3d 1018, 1023 (9th Cir. 164. Messner v. Northshore Univ. Factors "pertinent" to the predominance and superiority requirements include the "class members' interests in individually controlling" the litigation, whether litigation on the matter has already been begun by other class members, whether concentrating the litigation in one forum is desirable or undesirable, and the potential difficulties managing the class action presents. Finally, the Court finds that Mr. Robinson will adequately represent the absent class members. which has the capacity, tendency, or effect of deceiving or misleading consumers." Moreover, although the court stated that an arrangement for providing expert testimony for a contingent fee would violate public policy, the court did not address the question of the admissibility of evidence at issue here. 2010). The Motions are fully briefed, and no hearing is necessary to resolve the issues. The Federal Rules of Evidence do not prohibit these kinds of arrangements. LLC, No. 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. Code Ann., Com. On February 10, 2022, the Court of Appeals issued a decision affirming the Final Approval Order. See Farber, 2017 WL 4347826 at 15; Billings, 170 F. Supp. Subscribe to our free newsletter right now. In February 2014, after their income had further decreased, the Robinsons ceased making payments on the mortgage loan. 2018); Renfroe v. Nationstar Mortg., LLC, 822 F.3d 1241, 1247 n.4 (11th Cir. During this period, in August 2013, the Robinsons retained a forensic loan auditor, Professional Compliance Examiners ("PaCE"), and paid it $2,275 to help them communicate with Nationstar. 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. 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. Make your practice more effective and efficient with Casetexts legal research suite. Nelson, 2017 WL 1167230, at *3 (collecting cases). Robinson v. Nationstar Mortgage, LLC Complaint with jury demand against Nationstar Mortgage, LLC. 2003). 2605(f)(1). Code Ann., Com. 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." . Law 13-316(c), the Court will grant class certification as to those class members and claims. loan" did not have standing to bring a RESPA claim); Nelson v. Nationstar Mortg. 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. LLCNo. "[A] trial court should consider the specific factors identified in Daubert where they are reasonable measures of the reliability of expert testimony." It follows that only borrowers may bring a claim that a loan servicer has violated Regulation X. Nationstar correctly notes that the Robinsons have not identified a false or misleading statement or representation by Nationstar in the record. Law 13-316(c) are triggered upon the submission of a loss mitigation application, while 12 C.F.R. "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. 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. 3d 712, 728 (S.D. 120. Wesleyan Coll. at 248-49. When considering whether expert testimony is reliable or should be excluded, the court considers the following factors: "When an expert's report or testimony is 'critical to class certification,'" the district court "must make a conclusive ruling on any challenge to that expert's qualifications or submissions before it may rule on a motion for class certification." 1024.41(f), (g), and (h); and (4) there is no evidence of actual damages from any RESPA violation. While Mr. Robinson signed the promissory note ("the Note"), the deed of trust ("the Deed"), and the balloon payment rider for the 2007 loan, Tamara Robinson ("Mrs. Robinson") signed only the Deed and balloon payment rider and did not sign the Note. 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. From January 2012 to December 2016, the CFPB and 50 state attorneys general claim Nationstar, which is now doing business asMr. Cooper, engaged in a number of unlawful practices in handling mortgages following the Great Recession. 09-08213, 2011 WL 11651320 (C.D. Fla. 2009), aff'd, 398 F. App'x 467, 471 (11th Cir. Once an underwriter is assigned, that employee double-checks whether the application contains all required documentation and is complete. 2d 1360, 1366 (S.D. Law 13-301 and 13-303, because the Robinsons do not have standing to bring those claims. FCRA). Part 1024). 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. P. 23(a)(2); Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). 28, 2017). 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. Reg. 1024.41(a). . The ruling serves as a reminder that Florida remains one of the top states for both mortgage fraud and lender errors. 877-683-9363. 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. 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. Gym, Recreational & Athletic Equip. These rights and optionsand the deadlines to exercise themare explained further on the Frequently Asked Questions page of this website and in the Notice. 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. Thorn v. Jefferson-Pilot Life Ins. Finally, where Nationstar has offered no specific argument in its brief, beyond those addressed above, to refute Oliver's proffered analysis for identifying RESPA violations arising from the failure to notify borrowers of their appeal rights or the failure to exercise diligence in requesting documents based on repeated requests for the same documents, 12 C.F.R. 2d 754, 768-69 (D. Md. Fed. Proof of these claims requires a showing of the dates that an application was received, an acknowledgment letter was sent, an application became complete, Nationstar sent a decision letter to the borrower, and a foreclosure sale is scheduled. 8:2014cv03667 - Document 18 (D. Md. The Class Action Administrator would then begin distribution of the settlement funds. 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. That provision provides, in parallel, that a loan servicer which does not comply with Regulation X is liable "to the borrower." MCC JR 318, 530-531. . Similarly, though the precise nature of the fees imposed was not specified, it is reasonable to infer that some were attributable to delays linked to RESPA violations. As of November 22, about 2.8 million homeowners were in a forbearance plan, according to the latest research from the Mortgage Bankers Association. 16-0117, 2017 WL 4347826, at *15 (D. Md. Since Mrs. Robinson may not bring a claim under Regulation X, she may not be a named class representative. Fed. Id. Finally, the Court notes that a decision to certify a class is based on whether or not a putative class satisfies the Rule 23 factors, not on a preliminary assessment of the underlying merits of the claim. Code Ann., Com. Md. Law 13-316(c). When those scripts did not produce data that allowed the Robinsons to conduct the sampling, the Magistrate Judge ordered Nationstar on April 3, 2018 to run certain "structural scripts" on two of its four databases. Particularly where a class may be certified even if individualized damages calculations would be necessary, the incomplete nature of the damages analysis does not provide a basis for striking Oliver's expert testimony. Furthermore, to the extent that the Robinsons' claim is that Nationstar falsely stated that it would evaluate the Robinsons for all available loss mitigation plans, the Robinsons point only to statements in letters that the Robinsons "may" be eligible for certain non-HAMP loan modification programs. Although each class member must individually show that they suffered "actual damages" under 12 U.S.C. Joint Record ("MCC JR") 0907. R. Civ. A servicer that fails to comply with Regulation X is liable for actual damages and, upon a finding of a "pattern or practice" of non-compliance by the servicer, up to $2,000 in statutory damages. Ass'n, No. Moreover, the possibility that some members of the class as defined by the Robinsons have not suffered any injury cognizable under RESPA or MCPA does not preclude certifying the class. 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. See 12 C.F.R. This abandoned high school was converted into a 31-unit apartment building, number of unlawful practices in handling mortgages following the Great Recession. Neither the rule nor the comment, however, state whether Maryland is one such jurisdiction. Because all of the Rule 23(a) and (b)(3) requirements are met as to a class asserting violations of 12 C.F.R. 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. Id. R. Civ. If the initial application is not complete, a different Remedy Star substatus notation and LSAMS code are entered, and a letter is created and sent to the borrower asking for the required documents. The CFPB estimates about 40,000 borrowers were harmed by Nationstar's allegedly unfair and deceptive practices, according to a statement released Monday. Thus, based on his report and experience, Oliver concludes that Nationstar "failed to comply" with Regulation X and that it is possible to "identify violations" of Regulation X "using the methodologies" he described, without the necessity of a file-by-file review. This assertion mischaracterizes the burden of proof in a civil case. 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. 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. See 12 C.F.R. The proposed settlement with the CFPB requires Nationstar to pay $73 million in restitution to affected borrowers, as well as a $1.5 million civil penalty to the agency. Mot. Id. 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). Because Oliver analyzed proprietary databases and data specifically disclosed for this litigation pursuant to a protective order, such that Oliver's peers lack access to the same information, Oliver's expert testimony is not of the type that ordinarily would be subject to peer review, and it would be unfair to require "general acceptance within a relevant scientific community." Summ. Class Certif. . Subsequent Loss Mitigation Application. . If you were contacted on your cell phone by a company via an . 1024.41(i). J. See Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 178 (1974) ("In determining the propriety of a class action, the question is not whether the plaintiff or plaintiffs have stated a cause of action or will prevail on the merits, but rather whether the requirements of Rule 23 are met."). After several customers of Green Earth Services canceled its services, the Robinsons sought loss mitigation in the form of a loan modification from Nationstar. 1024.41 (2019), and the Maryland Consumer Protection Act ("MCPA"), Md. . 2605(f), is common question of law and fact that Mr. Robinson and the class members would all be required prove in their individual cases in order to qualify for statutory damages. 2010) (holding that a plaintiff who "was not a borrower or otherwise obligated on the . Since the Rule 23(a) factors are satisfied, the Court will now consider whether the Rule 23(b)(3) predominance and superiority considerations are met. Campbell v. Nationstar Mortg., 611 F. App'x 288, 297-98 (6th Cir. Actual damages may include late fees; denial of credit or access to the full amount of a credit line; out-of-pocket expenses incurred in dealing with a RESPA violation, such as expenses for preparing and copying correspondence; and lost time and inconvenience, including time spent away from employment while preparing correspondence "to the extent it resulted in actual pecuniary loss." Law 13-316(c). 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. Id. . See Lierboe v. State Farm Mut. "There are going to be a lot of homeowners who need a home loan modification or other assistance," Raoul says. Jennings' office said that these new standards are more robust than existing law and will be in place for three years starting in January 2021. 1024.41(c)(1)(i). . Feb. 14, 2017) (holding that the plaintiff sufficiently pleaded damages under the MCPA where she alleged that the defendant's failures to respond "resulted in the continual assessment of accruing interest, fees and costs on the mortgage account," as well as "stress, physical sickness, headaches, sleep deprivation, worry, and pecuniary expenses"). Specifically, the loan servicer failed to honor borrowers' loan modification agreements. Individual damages would be below the cost of litigation even if each class member could establish that Nationstar's conduct consisted of a pattern or practice of violating Regulation X, because the statute limits such damages to $2,000 per borrower. From this approach, Oliver concluded that for approximately 60 percent of the sampled loans, Nationstar failed to comply with the requirement that it inform the borrower of loss mitigation application determination within 30 days of receiving a complete application. 1024.41, a regulation of RESPA that outlines loss mitigation procedures. In Washington v. Am. cause[d] damages retroactively" and "transmogrifie[d]" the costs that predate the RESPA violation into damages. Distribution of funds to Class Members, however, could not occur because a member of the Class filed an objection to the Settlement and a subsequent appeal to the U.S. Court of Appeals for the Fourth Circuit. 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. 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. 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." Code Ann., Com. USCA4 Appeal: 21-1087 Doc: 38 Filed: 06/15/2021 Pg: 9 of 33 uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results." Md. 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.

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