The relevant rule prohibits an attorney from "offer[ing] an inducement to a witness that is prohibited by law." As a result, on January 29, 2018, the Magistrate Judge granted the Robinsons' Motion to Compel in which the Robinsons had sought to have the Court order Nationstar to accept and run scripts created by the Robinsons' expert to extract the relevant data from Nationstar's databases on the sample of loans from which they could test their methodology for identifying members of the proposed classes. 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. 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. J. However, Nationstar did not comply with all requirements of Regulation X, which became effective on January 10, 2014. Mr. Robinson's counsel is experienced in complex civil litigation and class action litigation. The company has already paid about $57.5 million in restitution to affected consumers, according to the CFPB. An "unfair or deceptive" trade practice includes a "false . This is not the first time Nationstar has been the subject of federal and state investigations. Finally, a loan servicer "is only required to comply with the requirements" of section 1024.41 "for a single complete loss mitigation application for a borrower's mortgage loan account." 2605(f)(2) is not fatal to the predominance inquiry. Since there is no genuine issue of material fact as to whether Nationstar violated subsection (h), summary judgment will be entered for Nationstar on that claim. 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. Mich. 2016), at least one district court has held that loan servicers need not comply with Regulation X if the borrower had previously submitted a loss mitigation application before the January 10, 2014 effective date, see Trionfo v. Bank of America, N.A., No. It does not mount any persuasive attack on Oliver's "principles and methodology," Westberry, 178 F.3d at 261, which largely consisted of counting the number of days between events and reviewing files for a particular loan to determine whether they contained certain standard content. 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. They do not seek damages in the Amended Complaint for emotional distress or include such a claim in their itemized list of damages submitted in discovery. Law 13-301 and 303. In assessing this element, "numbers alone are not controlling" and a district court should consider "all of the circumstances of the case." (kw2s, Deputy Clerk) Download PDF Search this Case Google Scholar Google Books Legal Blogs Google Web Bing Web Google News Google News Archive Yahoo! He is joined by 49 other Attorneys General, the District of Columbia, and other state and federal agencies. Nationstar's Motion for Summary Judgment will be granted as to Tamara Robinson. EQT Prod. 1972). 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. See, e.g., Ward v. Dixie Nat. That notice must be provided within 30 days of receiving the complete loss mitigation application. 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. Tagatz, 861 F.2d at 1042; cf. 3d 254, 274-75 (S.D.N.Y. R. Civ. Finally, the named plaintiff must "fairly and adequately protect the interests of class" without a conflict of interest with the absent class members. On February 10, 2022, the Court of Appeals issued a decision affirming the Final Approval Order. ORDER Scheduling Settlement Conference for Wednesday, October 26, 2016 at 10:30 a.m. 2015) Court Description: MEMORANDUM OPINION. Am. 1024.41(b)(2)(i)(B) and Md. Law 13-316(c). James Robinson v. National Student Clearinghouse Toggle navigation Home Commonly Asked Questions Documents The Court approved the settlement at the July 7, 2020 Fairness Hearing. 8:2014cv03667 - Document 18 (D. Md. R. Civ. Rules 19-303.4(b) (2018). McLean II, 398 F. App'x at 471. Indeed, Nationstar does not seriously contest the commonality prong. Co v. Adair, 764 F.3d 347, 359-60 (4th Cir. See 12 C.F.R. Subsequent to the Court's approval, one of the objectors to the settlement filed an appeal. Id. Between July 2010 and November 2013, the Robinsons submitted and Nationstar denied three applications for a loan modification under the Home Affordable Modification Program ("HAMP"). If the initial application is complete, the substatus in Remedy Star is changed to refer the application to an underwriter for review, and an additional code is added in LSAMS. 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. The Class Action Administrator would then begin distribution of the settlement funds. The CFPB estimates about 40,000 borrowers were harmed by Nationstar's allegedly unfair and deceptive practices, according to a statement released Monday. 12 C.F.R. Plaintiffs "must present specific evidence to establish a causal link between the [servicer's] violation and their injuries." Compl. 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. 2010). Mr. Robinson then submitted another loan modification application on August 25, 2014. 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 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." After this missed payment, Nationstar assessed a late fee. Fed. 1024.41(c)(1)(ii), which requires a servicer to respond to a completed loan modification application; or Md. . The Court does not find such a prohibition in the Maryland Attorneys' Rules of Professional Conduct. While the Nationstar employee who conducts the initial processing of an application may refer it to an underwriter based on its facial completeness, the underwriter makes the final determination of whether the application is complete and is responsible for obtaining any additional required documentation. See id. 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. MCC JR 530. This assertion mischaracterizes the burden of proof in a civil case. Nationstar sent Mr. Robinson two letters denying his loan modification application on July 17, 2014 and September 9, 2014, but there is no evidence in the record that the Robinsons submitted an appeal to either of those letters. 218. In Washington v. Am. 1024.41, a regulation of RESPA that outlines loss mitigation procedures. 17-0982, 2018 WL 4111938, at *5-6 (M.D. Mar. Md. Id. 15-3960, 2017 WL 623465, at *8 (D. Md. 877-683-9363. Appellate Win Affirms $3 Million Settlement in Class Action against Nationstar Mortgage - Tycko & Zavareei LLP Contact Us We look forward to hearing from you. 2015) (holding that Regulation X did not apply to loss mitigation applications submitted before the effective date). 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. 2d 1360, 1366 (S.D. 12 U.S.C. v. DEMETRIUS ROBINSON; TAMARA ROBINSON, Plaintiffs - Appellees, v. . 2003). Tagatz v. Marquette Univ., 861 F.2d 1040, 1042 (7th Cir. or misleading oral or written statement . "We will be watching the mortgage interest industry to ensure they are treating homeowners fairly and fulfilling their obligations.". Nationstar's Motion will be denied as to this claim. 2d 754, 768-69 (D. Md. Those claims arose from Nationstar's alleged In the case of Tony Robinson and Debra Robinson vs Nationstar Mortgage, LLC, the appeals court ruled that the lender did not actually have the right to foreclose on the property. Where the PaCE consulting fee was a one-time fee to advise the Robinsons in their interactions with Nationstar paid in August 2013, several months before they first submitted the March 2014 loan modification application, this cost was incurred "whether or not [Nationstar] complied with its obligations." 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. Nationstar's failings resulted in "substantial consumer harm," CFPB Director Kathleen Kraninger said in a statement. 1024.41(a). For the claims that rely on the timing of a response, Oliver and the Robinsons propose using changes in the Remedy Star substatus or LSAMS codes and documents stored in FileNet to identify the date a loan modification application was received or marked as complete, to identify the date a response was sent, and to count the number of days between events. 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. HARRISBURG Attorney General Josh Shapiro, as part of a multistate effort, today announced that his office obtained an $86.3 million settlement from Nationstar Mortgage, the country's fourth-largest mortgage servicer. Code Ann., Com. See id. 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. 3d 1011, 1015 (W.D. Code Ann., Com. Nationstar also seeks summary judgment on the Robinsons' claims under the MCPA, which include claims of misleading statements in connection with the collection of consumer debts, in violation of section 13-301(1), (3) and section 13-303(4)-(5) of the MCPA, and claims that Nationstar did not respond to consumer inquiries within 15 days, in violation of section 13-316(c) of the MCPA. Mot. 2605(f). 1024.41(c)(1)(i). Sept. 29, 2021). 16-0117, 2017 WL 4347826, at *15 (D. Md. The Robinsons also claim as damages interest overcharges of approximately $141,000. "[N]amed class representatives [must] demonstrate standing through a 'requisite case or controversy between themselves personally and defendants,' not merely allege that 'injury has been suffered by other, unidentified members of the class to which they belong and which they purport to represent.'" at 152. 2601 et seq. Like the class members, to prove his case, Mr. Robinson will have to show that Nationstar failed to timely and appropriately respond to his loan modification applications by pointing to the dates of his submissions and the dates and contents of Nationstar's responses. Summ. 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. 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. 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. 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. 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. The servicer "is liable for any economic damages caused by the violation." 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. The Nationwide Class and the Maryland Subclass are ascertainable and satisfy the Rule 23(a) factors. Signed by Judge Theodore D. Chuang on 8/18/2015. A class action may be maintained under Rule 23(b)(3) if common questions of law or fact "predominate over any questions affecting only individual members" and a "class action is superior to other available methods for fairly and efficiently adjudicating the controversy." The settlement in the form of a consent judgment, filed in the U . Sept. 9, 2019), there were multiple other claims at issue, for which Oliver's expert report seemed better suited to address. If the named plaintiff satisfies all of the Rule 23(a) requirements and the Rule 23(b)(3) requirements, then class certification is appropriate. Corp. ("McLean II"), 398 F. App'x 467, 471 (11th Cir. 2018); Renfroe v. Nationstar Mortg., LLC, 822 F.3d 1241, 1247 n.4 (11th Cir. 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. P. 23(b)(3). 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. Life Ins. 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. 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. 12 U.S.C. Id. But see Ayres v. Ocwen Loan Servicing, LLC, 129 F. Supp. 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 Robinsons, however, have not identified any evidence that Nationstar did not intend to, and did not, conduct such evaluations. 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. "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.". 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. 2005))). While every class member will have to establish damages, that calculation will not be "particularly complex," as it will require identifying administrative costs and fees that would not have occurred but for the RESPA violation. Part 1024). . Rules Prof'l Conduct 3.4 cmt. These rights and optionsand the deadlines to exercise themare explained further on the Frequently Asked Questions page of this website and in the Notice. Code Ann., Com. . 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. Hickerson, 882 F.3d at 480 (quoting Cooper, 259 F.3d at 199). Nationstar also asserts that the Robinsons have not identified evidence sufficient to support their MCPA claims. 2013)). See Torres v. Mercer Canyons Inc., 835 F.3d 1125, 1137 (9th Cir. Law 13-301 and 13-303, because the Robinsons do not have standing to bring those claims. 1024.41(b)(2)(B). Corp. ("McLean I"), 595 F. Supp. 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. 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." 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"). Joint Record ("MCC JR") 0907. ("MCC") 2, ECF No. Therefore, Nationstar was required to comply with section 1024.41 in processing it. 2605(f). 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."). 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 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 code is entered in Remedy Star when the letter is sent. 2006). Thus, the Court concludes that common computerized analysis can largely answer the question of whether Nationstar violated these RESPA provisions with respect to individual borrowers. Law 13-303(4)-(5), 13-408. v. Nationstar Mortgage LLC, Case No. Nationstar correctly notes that the Robinsons have not identified a false or misleading statement or representation by Nationstar in the record. 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. Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. The Class is represented by Rafey S. Balabanian of Edelson PC. 1994) (noting that a single common issue is sufficient to meet the commonality requirement). . 2601-2617 (2012), specifically RESPA's implementing regulations known as "Regulation X," 12 C.F.R. 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. 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. If a class is ascertainable, it must then satisfy all four elements of Rule 23(a): numerosity, commonality, typicality, and adequacy. 2601(a). To satisfy the numerosity requirement, the proposed class must be so numerous that "joinder of all members is impracticable." All Rights Reserved. Ward, 595 F.3d at 180 (quoting Gunnells, 348 F.3d at 430). A complete loss mitigation application is "an application in connection with which a servicer has received all the information that the servicer requires from a borrower in evaluating applications for the loss mitigation options available to the borrower." 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. After an additional period of expert discovery relating to the class certification motion, discovery closed on December 30, 2018. 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. A separate Order shall issue. 2003). Cent. 125. While the date that Nationstar's systems came into compliance, is unknown, Nationstar's systematic noncompliance presents common questions of law and fact for all class members. A dispute of material fact is only "genuine" if sufficient evidence favoring the nonmoving party exists for the trier of fact to return a verdict for that party. Although this data was not provided to Oliver, there is no reason it could not be produced and used to make determinations on the timeliness of decisions on loss mitigation applications. 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). Id. Wirtz v. Specialized Loan Servicing, LLC, 886 F.3d 713, 719-20 (8th Cir. 2605(f)(1)(A); see 12 C.F.R. at 248-49. 2010) (considering consistency of results that provide finality to the defendant as favoring a finding of superiority). Code Ann., Com. The Robinsons' Motion for Class Certification will be GRANTED IN PART and DENIED IN PART. Cf. 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. 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. 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.