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. McLean v. GMAC Mortg. 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. 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 "Nationwide Class" is composed of "[a]ll persons in the United States that submitted a loss mitigation application to Nationstar after January 10, 2014, and through the date of the Court's certification order." 2605(f)(1)(A); see 12 C.F.R. 1024.41(a). The Robinsons' expert had written the scripts using data dictionaries and without accessing the databases. 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. If the named plaintiff satisfies all of the Rule 23(a) requirements and the Rule 23(b)(3) requirements, then class certification is appropriate. 1024.41(c)(1)(i). 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. Ins. Nationstar also asserts that the Robinsons have not identified evidence sufficient to support their MCPA claims. Whether an application is complete depends on the requirements of the investor who holds the loan. 2d at 1366. See MCC JR0529-31. 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"). 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. 12 U.S.C. The settlement in the form of a consent judgment, filed in the U . 2007)), aff'd sub nom. 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. He is joined by 49 other Attorneys General, the District of Columbia, and other state and federal agencies. The company has already paid about $57.5 million in restitution to affected consumers, according to the CFPB. It is the plaintiffs who bear the burden of proving their claims. R. Civ. See Farber, 2017 WL 4347826 at 15; Billings, 170 F. Supp. See 12 C.F.R. As for typicality, the named plaintiff must be "typical" of the class, such that that the class representative's claim and defenses are "typical of the claims or defenses of the class" in that prosecution of the claim will "simultaneously tend to advance the interests of the absent class members." In 2017, the CFPB fined Nationstar $1.75 million for failing to report accurate data about its mortgage transactions. On May 5, 2014, Nationstar asked the Robinsons for additional information to evaluate the appeal, including documents to verify their income. 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. 12 C.F.R. 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." Code Ann., Com. A class action allows representative parties to prosecute not only their own claims, but also the claims of other individuals which present similar issues. Regulation X went into effect on January 10, 2014. "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.". v. DEMETRIUS ROBINSON; TAMARA ROBINSON, Plaintiffs - Appellees, v. . Because of the need to protect the rights of absent plaintiffs to assert different claims and of defendants to assert facts and defenses specific to individual class members, courts must conduct a "rigorous analysis" of whether a proposed class action meets the requirements of Federal Rule of Civil Procedure 23 before certifying a class. Opp'n Mot. that it is improper to pay an expert witness a contingent fee." These letters are based on standard Nationstar templates, and the code reflects the type of letter sent. ("Opp'n') 13, ECF No. Notably, Oliver's analysis did not consider foreclosure information because the data produced did not include dates of foreclosure sales. The Robinsons also claim as damages interest overcharges of approximately $141,000. 15-3960, 2017 WL 623465, at *8 (D. Md. 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] . Law 13-101 to 13-411 (West 2015). More Information See Stillmock v. Weis Markets, Inc., 385 F. App'x 267, 275 (4th Cir. Id. Subscribe to our free newsletter right now. Under subsections (f) and (g), a loan servicer is not permitted to begin foreclosure proceedings or move for foreclosure judgment if "a borrower submits a complete loss mitigation application" except in certain circumstances. 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. Id. 2601-2617 (2012), specifically RESPA's implementing regulations known as "Regulation X," 12 C.F.R. In analyzing this question, a court compares the class representative's claims and defenses to those of the absent class members, considers the facts needed to prove the class representative's claims, and assesses the extent to which those facts would also prove the claims of the absent class members. Because Oliver's methodology is reliable within the meaning of Federal Rule of Civil Procedure 702 and Daubert, Nationstar's Motion to Strike will be denied. See id. Once an underwriter is assigned, that employee double-checks whether the application contains all required documentation and is complete. . 2010) (holding that a plaintiff who "was not a borrower or otherwise obligated on the . 1024.41(f), (g), and (h), and Md. Cal. Furthermore, Nationstar's argument that the Robinsons are not typical largely recycles the same arguments made in the Motion for Summary Judgment. 1967). When Nationstar received the application, it prevented late fees from being assessed and put a hold on any foreclosure proceedings. Class certification will be granted, with Demetrius Robinson as the named plaintiff, as to both the Nationwide Class and the Maryland Class for the claims under 12 C.F.R. 1024.41(i). . A Division of NBC Universal. Compl. Code Ann., Com. 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. When combined with the state settlements, Nationstar is on the hook to pay a total of $91 million overall: $85 million to harmed consumers and $6 million in civil penalties. On November 21, 2014, the Robinsons filed suit against Nationstar on behalf of themselves and a class of similarly situated individuals nationwide. 2013); Poindexter v. Teubert, 462 F.2d 1096, 1097 (4th Cir. 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. 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. . For purposes of ascertainability, the requirements of 12 C.F.R. Fed. 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. 2605(f). This abandoned high school was converted into a 31-unit apartment building, number of unlawful practices in handling mortgages following the Great Recession. Portland, OR 97208-3560. at 300. The fact that Oliver's methodology has not been subjected to peer review and that he has not published any articles about it does not invalidate it. 12 U.S.C. 1988) (distinguishing between a rule of professional conduct and admissibility of evidence); cf. Code Ann., Com. After an additional period of expert discovery relating to the class certification motion, discovery closed on December 30, 2018. 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. 702, 703. A plaintiff has the burden to show that all of the necessary prerequisites for a class action have been met. P. 23(a)(3); Deiter v. Microsoft Corp., 436 F.3d 461, 466-67 (4th Cir. Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act ("Regulation X"), 78 Fed. Specifically, the application itself would have to be reviewed to determine when it was stamped as received by Nationstar. Hickerson, 882 F.3d at 480 (quoting Cooper, 259 F.3d at 199). 2014))). 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. 1024.41(c)(1)(ii), which requires a servicer to respond to a completed loan modification application; or Md. 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. The Robinsons own a business called Green Earth Services, which provides waste and recycling services to clients. 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 . Nationstar denies all allegations of wrongdoing and no judgment or determination of wrongdoing has been made. A servicer that fails to comply with Regulation X is liable for "any actual damages to the borrower as a result of the failure" to comply. Robinson, 2015 WL 4994491, at *4 (citing Marchese v. JPMorgan Chase Bank, N.A., 917 F. Supp. May 31, 2016), the plaintiff had signed the deed of trust but not the promissory note but was nevertheless deemed to have standing because she had owned the home with a right of survivorship with her deceased husband, who had signed the note. 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. 1024.41(b)(1), (b)(2)(i)(B), and (c)(1)(ii) and Md. 2004). Robinson v. Nationstar Mortgage, LLC Complaint with jury demand against Nationstar Mortgage, LLC. The Class is represented by Rafey S. Balabanian of Edelson PC. 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." 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. Sept. 2, 2015). Messner v. Northshore Univ. See 12 C.F.R. Id. Code Ann., Com. 1024.41(a). Because there are, at a minimum, disputed issues of fact as to what fees, administrative costs, and interest constitute damages, the Court will deny the motion for summary judgment on the issue of actual damages. 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. Cent. at 358. or other representation . Indeed, Mr. Robinson testified that Mrs. Robinson did not sign the Note because she did not purchase the property with him. 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. 2605(f)(1)(B), a borrower cannot recover these additional damages "without first recovering actual damages." LLCNo. As of November 22, about 2.8 million homeowners were in a forbearance plan, according to the latest research from the Mortgage Bankers Association. 2605(f)(2) is not fatal to the predominance inquiry. MCC JR 530. From January 2014 to the present, the Robinsons have not pursued other loss mitigation options, such as a short sale. Md. 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. 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. Rather than striking the testimony, the Court may need to consider permitting supplemental discovery to correct for the lack of relevant data not previously made available to Oliver. See Krakauer v. Dish Network, L.L.C., 925 F.3d 643, 658 (4th Cir. The Magistrate Judge ordered Nationstar to run those scripts and return the electronic data to the Robinsons. If the settlements are approved by the D.C. district court, Nationstar will be required to immediately set aside about $15.6 million to pay borrowers it has not yet remediated. P. 23(a)(1). 2d 452, 467 (D. Md. Accordingly, the Motion is denied as to such claims. Law 13 . Actual damages may also include "non-pecuniary damages, such as emotional distress and pain and suffering." Nationstar's Motion to Strike will be DENIED. Amchem Prods. Rules Prof'l Conduct 3.4 cmt. Because such information is stored electronically and based on objective criteria, the members of the class will be ascertainable without significant administrative burden. Furthermore, Oliver states that since Nationstar employees used templates to communicate with borrowers, he could determine whether there were violations of certain RESPA provisions based on entries showing that Nationstar employees used templates that did not comply with RESPA. Nationstar also argues that Oliver's report should be stricken as unreliable under the Federal Rules of Evidence and Daubert. TDC-14-3667, 2019 WL 4261696 (D. Md. Fed. WASHINGTON, D.C. The Consumer Financial Protection Bureau (CFPB) today ordered Nationstar Mortgage LLC to pay a $1.75 million civil penalty for violating the Home Mortgage Disclosure Act (HMDA) by consistently failing to report accurate data about mortgage transactions for 2012 through 2014. 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. 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. HealthSystem, 669 F.3d 802, 812 (7th Cir. 09-08213, 2011 WL 11651320 (C.D. 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. 2006). . or misleading oral or written statement . Tenn. Aug. 28, 2018) (holding that a spouse who signed a deed of trust stating that a person who did not sign the promissory note was not obligated on the security instrument, but did not sign the promissory note, was not a borrower under RESPA). Sept. 9, 2019), there were multiple other claims at issue, for which Oliver's expert report seemed better suited to address.
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