As of November 22, about 2.8 million homeowners were in a forbearance plan, according to the latest research from the Mortgage Bankers Association. At this stage of the proceedings, the Court must rely on facts in the record, and not assertions in the pleadings. 1024.41(c)(1)(i) and (d), because the Robinsons made no showing that the Rule 23 requirements were met. This assertion mischaracterizes the burden of proof in a civil case. Id. Sept. 9, 2019), there were multiple other claims at issue, for which Oliver's expert report seemed better suited to address. For example, Nationstar's own internal procedures reveal that when a loss mitigation application is received, a processor reviews it to determine if all required information and documents have been received, and enters one code, specifically "code HMPC" in LSAMS signifying "Financial Application Complete," and a different code, specifically "code HMPA," signifying "Financial Application Incomplete." 19-303.4 cmt.3. 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). Sept. 29, 2017); Billings v. Seterus, Inc., 170 F. Supp. Where a contingency fee arrangement for expert witnesses is not expressly prohibited by the Maryland Rules of Professional Conduct, the Court declines to find that the fee arrangement here constituted an ethical violation. 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. "[A] trial court should consider the specific factors identified in Daubert where they are reasonable measures of the reliability of expert testimony." While class members would not be eligible for statutory damages unless actual damages are shown, see 12 U.S.C. In addition, Nationstar asserts that not all loan modification applications referred to an underwriter are complete. 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. 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. 1024.41(a). Mar. . While several district courts have concluded that loss mitigation applications submitted before Regulation X's effective date do not count as the single application for which a loan servicer must comply with Regulation X, see, e.g., Farber v. Brock & Scott, LLC, No. 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. If more documents are required, then the same Remedy Star substatus and LSAMS code that denote missing documents are entered. In the Amended Complaint, the Robinsons claim that Nationstar's representations that it offered many loss mitigation plans and "would evaluate" borrowers "for eligibility for all these loss mitigation plans" were false. Nationstar also allegedly foreclosed on borrowers with pending forbearance applications after promising not to do so and failed to properly handle escrow payments and accounting for homeowners who were in Chapter 13 bankruptcy proceedings. In the samples . (2000) (reflecting that the prior version of the rules of professional conduct prohibited an attorney from "acquiesc[ing] in the payment of compensation to a witness contingent on the content of his testimony or the outcome of the case"). 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." 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. . R. Civ. 303 0 obj <> endobj 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. 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). See Keen, 2018 WL 4111938, at *5-6. Similarly, since Mr. Robinson has not suffered injury under these provisions, he may not bring those claims on behalf of the class. "); cf. Code Ann., Com. at 983 (quoting 12 U.S.C. at 300. Nationstar Mortgage settles $2.75 million for Pennsylvania mortgage The Robinsons also claim as damages interest overcharges of approximately $141,000. 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. Ass'n, 375 F.2d 648, 653 (4th Cir. See Robinson v. Nationstar Mortg. That claim will be subject to common proof, namely sampling and analysis of loan files along the lines suggested by Oliver. Oliver's expert report focuses on the use of Nationstar's internal databases to determine whether Nationstar has systematically failed to comply with various requirements of Regulation X. If the named plaintiff satisfies all of the Rule 23(a) requirements and the Rule 23(b)(3) requirements, then class certification is appropriate. CFPB V. Nationstar - Home The Nationwide Class and the Maryland Subclass are ascertainable and satisfy the Rule 23(a) factors. Nationstar further argues that summary judgment must be entered in its favor on the Robinsons' claims under 12 C.F.R. Stewart v. Bierman, 859 F. Supp. 2015). Code Ann., Com. 16-0307, 2017 WL 1167230, at *3 (E.D.N.C. Commonality requires that a class have "questions of law or fact common to the class" which are capable of classwide resolution, such that the determination of the truth or falsity of the common issue "will resolve an issue that is central to the validity of each one of the claims in one stroke." See 12 C.F.R. 1024.41(b)(2)(B), which requires that an acknowledgment letter be sent within five days of receipt of a loan modification application; or 12 C.F.R. Fed. 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. 2015) Court Description: MEMORANDUM OPINION. 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. Summ. At the time, Nationstar had not completed the process of updating its systems to conform to those requirements. CFPB Takes Action Against Nationstar Mortgage for Flawed Mortgage Loan The Robinsons' Motion for Class Certification will be GRANTED IN PART and DENIED IN PART. 2d 873, 883 (D. Md. 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. 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." 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. If you want a reissue with no changes to the check, simply email, phone, or write us at: : info@NationstarConsentOrder.com. In order of priority, the parties proposed that the $3,000,000 settlement fund pay for administrative expenses up to $300,000, attorneys' fees, a class representative award, and . Several states also fined Nationstar in 2018 over failing to have proper procedures in place and "unfair and deceptive" mortgage modification policies. (quoting 7AA Charles Allan Wright et al., Federal Practice and Procedure 1778 (3d ed. Opp'n Mot. 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 argues that summary judgment should be granted against Mrs. Robinson because she is not a "borrower" within the meaning of RESPA. 2010). That's one reason why the settlement, particularly the provisions requiring Nationstar to adhere to enhanced standards, is crucial. The Robinsons allege that Nationstar has assessed $256 per month in late fees, interest, and other fees due to the delinquency, and that they have spent considerable time and effort pursuing the loss mitigation process, time which they otherwise would have devoted to their struggling small business. 2605(f)(1)(A)). On February 16, 2017, the Court referred the case to United States Magistrate Judge Charles B. 1024.41(b)(1), which requires reasonable diligence in obtaining documents and information to complete a loss mitigation application; and Md. Compl. 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. 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 Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349, 356-57 (3d Cir. Nationstar argues that it should be granted summary judgment on all of the RESPA claims because Nationstar was required to comply with Regulation X only as to a borrower's first loss mitigation application, and the Robinsons' March 7, 2014 application was not their first loan modification application. A fact is "material" if it "might affect the outcome of the suit under the governing law." 12 U.S.C. He asserted that the amount of fees was calculated based on Nationstar's statements, but he could not specify the nature of the fees. . 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. The regulation is silent on whether a loss mitigation application submitted before January 10, 2014 could qualify as the "single complete loss mitigation application." 15-3960, 2017 WL 623465, at *8 (D. Md. Nationstar's reliance on Accrued Financial Services v. Prime Retail, Inc., 298 F.3d 291 (4th Cir. On July 17, 2014, Nationstar informed Mr. Robinson by letter that he did not qualify for a HAMP modification and that since the March 14 loan modification offer had not been accepted, it was withdrawn. See McGraw, 646 F.2d at 176. 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. In Frank v. J.P. Morgan Chase Bank, N.A., No. 1024.41(b)(2)(i)(B), which requires that an acknowledgment letter be sent within five days of receipt of a loss mitigation application; 12 C.F.R. 2010). Life Ins. R. Civ. PDF Order Granting Motion for Final Approval - Robinson v Nationstar Id. Some of the alleged damages are not supported in law or in fact. 2012). %PDF-1.6 % This argument runs contrary to the plain language of Nationstar's own procedures, which describe the application as "complete" based on the processor's determination, leading to the referral of the complete package to an underwriter. The Robinsons do not address this argument in their Opposition. The company has already paid about $57.5 million in restitution to affected consumers, according to the CFPB. 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. Class Cert. 164. 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. 2019) (noting that the purpose of certifying a class "is not to identify every class member at the time of certification, but to define a class in such a way as to ensure that there will be some administratively feasible [way] for the court to determine whether a particular individual is a member at some point" (internal citation omitted) (quoting EQT Production Co. v. Adair, 764 F.3d 347, 358 (4th Cir. A borrower may enforce violations of these provisions through a private cause of action pursuant to 12 U.S.C. 09-08213, 2011 WL 11651320 (C.D. "We will be watching the mortgage interest industry to ensure they are treating homeowners fairly and fulfilling their obligations.". 702, 703. In Baez v. Specialized Loan Servicing, LLC, 709 F. App'x 979 (11th Cir. Robinson v. Nationstar Mortg. LLC - Casetext 218. Since Mrs. Robinson may not bring a claim under Regulation X, she may not be a named class representative. J. at 300. If the named plaintiff satisfies each of these requirements under Rule 23(a), the Court must still find that the proposed class action fits into one of the categories of class action under Rule 23(b) in order to certify the class. 1024.41(i). Robinson et al v. Nationstar Mortgage LLC, No. 8:2014cv03667 - Justia Law In their Motion for Class Certification, the Robinsons seek certification of two classes. 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. R. Civ. v. Nationstar Mortgage LLC Nationstar Call Settlement Administrator PO Box 3560 Fla. 2009), aff'd, 398 F. App'x 467, 471 (11th Cir. See id. 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. . 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. 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. Additional facts relevant to the pending motions are set forth below. 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. 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. Universal Athletic Sales Co. v. Am. 1024.41(c)(1)(ii), which requires a servicer to respond to a completed loan modification application; or Md. Discovery Order, ECF No. See Tagatz, 861 F.2d at 1042. Law 13-301 and 303. 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. In a victory for borrowers, the Fourth Circuit issued an opinion on Robinson v. Nationstar Mortgage LLC, affirming approval of the settlement.