robinson v nationstar settlement

. 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. Nationstar filed a notice of settlement and a joint motion to proceed before a magistrate . 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. Since Mrs. Robinson may not bring a claim under Regulation X, she may not be a named class representative. To view the settlement agreement and consent order, please visit the CSBS's website. Since Regulation X explicitly does not require a loan servicer to provide a loan modification, the Robinsons' claim that they suffered damages because they did not receive a loan modification is not cognizable under the statute. The Court does not find such a prohibition in the Maryland Attorneys' Rules of Professional Conduct. Order at 2, ECF No. Law 13-316(c) are triggered upon the submission of a loss mitigation application, while 12 C.F.R. J. 2012) (citing Lloyd v. Gen. Motors Corp., 916 A.2d 257, 277 (Md. 1024.41(c)(1)(ii), which requires a servicer to respond to a completed loan modification application; or Md. Gariety v. Grant Thornton, LLP, 368 F.3d 356, 366 (4th Cir. The distinction is crucial. 12 U.S.C. The commonality requirement is also met. Nationstar has no process for standardizing file names. . See id. Id. 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). Finally, the Court finds that Mr. Robinson will adequately represent the absent class members. v. DEMETRIUS ROBINSON; TAMARA ROBINSON, Plaintiffs - Appellees, v. . RESPA's implementing regulations, codified at 12 C.F.R. The Robinsons assert, and Nationstar does not argue otherwise, that litigation regarding Regulation X is not proceeding against Nationstar in another forum. 218. See id. "There are going to be a lot of homeowners who need a home loan modification or other assistance," Raoul says. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). A separate Order shall issue. Regulation X's effective date reflected "an intent not to apply it to conduct occurring prior to that date." Wirtz v. Specialized Loan Servicing, LLC, 886 F.3d 713, 719-20 (8th Cir. 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." Md. uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results." LLC, No. 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. See 12 C.F.R. 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). See supra parts I.B.1, I.B.3, I.C.1. 1024.41(f), (g), and (h), and Md. Nationstar's Motion will be denied as to this claim. 10696, 10708 (Feb. 14, 2013) (codified at 12 C.F.R. at 300. Universal Athletic Sales Co. v. Am. See, e.g., Linderman v. U.S. Bank Nat'l Ass'n, 887 F.3d 319, 321 (7th Cir. MCC JR 318, 530-531. 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. "Mortgage servicers are entrusted with handling significant financial transactions for millions of Americans, including struggling homeowners. 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. The regulation is silent on whether a loss mitigation application submitted before January 10, 2014 could qualify as the "single complete loss mitigation application." . The lawsuit alleges, however, that Nationstar has not made interest payments to the plaintiffs, nor provided any record that interest was accruing and due to the homeowners, at any time during or after December 1, 2018 to March 22, 2019 or May 1, 2020 through the present. It is the plaintiffs who bear the burden of proving their claims. "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. P. 23(b)(3). 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." 1024.41(c)(1)(ii), which requires a servicer to respond to a loan modification application within 30 days of receipt of a complete loss mitigation application and provide notice of appeal rights; 12 C.F.R. A fact is "material" if it "might affect the outcome of the suit under the governing law." Nationstar correctly notes that the Robinsons have not identified a false or misleading statement or representation by Nationstar in the record. Code Ann., Com. R. Civ. The Borrower Payment Amount shall be used: (1) for payments to borrowers who submit claims and are in either or both of the Service Transfer and Property Preservation Populations set forth below; and (2) for reasonable costs and expenses of the Settlement Administrator, including taxes and fees for tax counsel. 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. Co., 350 F.3d 1018, 1023 (9th Cir. 2d at 1366. at 248-49. The servicer "is liable for any economic damages caused by the violation." Nationstar's criticism that Oliver failed to use the correct data field to identify the date when a loss mitigation application was complete, and failed to consider the timing of application relative to the date of scheduled foreclosure sale, ring hollow because Nationstar provided to Oliver only limited data fields, which did not contain clear field names or definitions. 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. Home Loans, No. That's one reason why the settlement, particularly the provisions requiring Nationstar to adhere to enhanced standards, is crucial. Id. Florida Appeals Court Reverses Mortgage Foreclosure - Pike & Lustig, LLP At least one court has found a similar expert report by Oliver to meet the Daubert standard. Law 13-301 and 303. 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. Va., Inc., 543 F.2d 1075, 1080 (4th Cir. Nationstar to Pay $110 Million to Settle Borrower Claims But see Sutton v. CitiMortgage, Inc., 228 F. Supp. Fed. 2d 452, 467 (D. Md. According to Oliver, to determine that certain disclosures or specific information were conveyed to borrowers, the "objectid" field used in FileNet can be used to identify the type of letter sent. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. 1024.41(f), (g), and (h), and Md. Courts have wide discretion to certify a class based on their familiarity with the issues and potential difficulties arising in class action litigation. Furthermore, determining whether statutory damages are available will require no individualized consideration, because the pattern-or-practice claim "would be based solely on" Nationstar's conduct and can be established through sampling. Gunnells v. Healthplan Serv., Inc., 348 F.3d 417, 458 (4th Cir. AG Shapiro Secures $2.75 Million for Pennsylvania Mortgage Loan At the time, Nationstar had not completed the process of updating its systems to conform to those requirements. After an additional period of expert discovery relating to the class certification motion, discovery closed on December 30, 2018. 1024.41(h)(1), (4). 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." Law 13-101 to 13-411 (West 2015). 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. 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. After they became delinquent on their loan, the Robinsons submitted another loan modification application to Nationstar on March 7, 2014. 1988) (distinguishing between a rule of professional conduct and admissibility of evidence); cf. 14-3667, 2015 WL 4994491, at *1-2 (D. Md. Thus, the Court concludes that, while Nationstar may have defenses as to some borrowers, the common proof that establishes the asserted violations, as well as the common question of whether the Robinsons can prove a pattern-or-practice violation by Nationstar, will predominate over the individual issues as to these claims. Code Ann., Com. 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 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. A Division of NBC Universal. Law 13 . 2d 452, 468 (D. Md. Law 13-316(c), which requires a response to a loan modification application within 15 days. 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] . 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. 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. 09-08213, 2011 WL 11651320 (C.D. According to Oliver, if he used incorrect data, that was a result of the limited data fields and definitions provided to him. Id. Filed by Janie Robinson. In Washington v. Am. 222. 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." For example, in EQT, the court concluded that a proposed class of all individuals who owned an interest in a gas estate was not ascertainable because the actual owners could be determined only through an individualized review of land records. Id. R. Civ. 2010) (holding that a plaintiff who "was not a borrower or otherwise obligated on the . Instead, the Robinsons assert that Nationstar has not affirmatively proven that it conducted such reviews. 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. Subsequent to the Court's approval, one of the objectors to the settlement filed an appeal. 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. In 2017, the CFPB fined Nationstar $1.75 million for failing to report accurate data about its mortgage transactions. Docket for Robinson v. Nationstar Mortgage LLC, 8:14-cv-03667 Brought to you by the RECAP Initiative and Free Law Project, a non-profit dedicated to creating high quality open legal information. Class Cert. 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. See Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349, 356-57 (3d Cir. 1024.41(c)(1)(i). Joint Record ("MSJ JR") 0102. The fee arrangement will be considered as an issue potentially affecting the credibility, rather than the admissibility, of the expert testimony. 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. PDF Motion for Fees - Robinson v Nationstar - Home Nationstar denies all allegations of wrongdoing and no judgment or determination of wrongdoing has been made. "If a borrower's complete loss mitigation application is denied for any trial or permanent loan modification option available to the borrower," the servicer must state in the required notice to the borrower "the specific reason or reasons for the servicer's determination for each such trial or permanent loan modification and, if applicable, that the borrower was not evaluated on other criteria." 2003). 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. 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. Furthermore, the Robinsons have made a sufficient showing that a central computerized analysis of Nationstar data would substantially, if not completely, resolve questions of whether RESPA violations occurred. Likewise, the articulated concern that Nationstar would not be required to respond to loss mitigation applications filed within a certain number of days of a foreclosure sale, can be addressed through the provision of data relating to the dates of scheduled foreclosure sales. 17-0982, 2018 WL 4111938, at *5-6 (M.D. For example, it was undisputed that on May 30, 2014, Mr. Robinson, in response to Nationstar's requests for additional information, resubmitted the same information sent with his March 2014 loan modification application. 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. 1024.41(a). Code Ann., Com. Life Ins. 1024.41(i). Nationstar Call Settlement Administrator. 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. 8:2014cv03667 - Document 18 (D. Md. 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. 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. 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. The Motion will be granted as to all of Tamara Robinson's claims and as to Demetrius Robinson's claims under 12 C.F.R. 1024.41(f), (g). See Torres v. Mercer Canyons Inc., 835 F.3d 1125, 1137 (9th 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. Id. Sep. 9, 2019). The "Maryland Subclass" consists of "[a]ll persons in the State of Maryland that submitted a loss mitigation application to Nationstar after January 10, 2014, and through the date of the Court's certification order." 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. Instead, he analyzed certain data fields that were returned by the scripts written by a different expert. Some courts have held that administrative costs that predate the alleged RESPA violation cannot constitute "actual damages." Sept. 29, 2017); Billings v. Seterus, Inc., 170 F. Supp. . 10696, 10708, provides that "[a] servicer is only required to comply with the requirements of this section for a single complete loss mitigation application for a borrower's mortgage loan account." In its complaint, filed in federal district court in the District of Columbia, the Bureau alleges that Nationstar engaged in unfair and deceptive acts and practices in violation of the Consumer Financial Protection Act of 2010, violated the Real Estate Settlement Procedures Act (RESPA), and violated the Homeowner's Protection Act of 1998 (HPA). 1987) (holding, in the context of an informant who is paid a contingent fee, that the fee should be treated "as a credibility factor"). Reg. Where it is now apparent, in hindsight, that Nationstar was permitted to withhold relevant and necessary data in the discovery process, it is unsurprising that Nationstar employees would then review loan files, with their complete data, and identify problems. 2013). Although she has worked as a bookkeeper for various companies, she was not employed between March and September 2014. Nationstar argues that summary judgment should be entered on the Robinsons' MCPA claim under section 13-316 because the Robinsons have not shown that they submitted a complaint or inquiry that triggers a duty to respond. Regulation X went into effect on January 10, 2014. 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. The Magistrate Judge ordered Nationstar to run those scripts and return the electronic data to the Robinsons. Several states also fined Nationstar in 2018 over failing to have proper procedures in place and "unfair and deceptive" mortgage modification policies. 19-303.4 cmt.3. Notably, although a borrower may recover up to $2,000 in statutory damages upon a showing of a "pattern or practice of non-compliance with the requirements" of Regulation X, 12 U.S.C. 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. 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."). 12 C.F.R. If the named plaintiff satisfies all of the Rule 23(a) requirements and the Rule 23(b)(3) requirements, then class certification is appropriate. USCA4 Appeal: 21-1087 Doc: 38 Filed: 06/15/2021 Pg: 9 of 33 Part 1024). R. Evid. He is joined by 49 other Attorneys General, the District of Columbia, and other state and federal agencies. Plaintiffs "must present specific evidence to establish a causal link between the [servicer's] violation and their injuries." 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. 26-1. 2d 1360, 1366 (S.D. CFPB Takes Action Against Nationstar Mortgage for Flawed Mortgage Loan In this photo illustration, the Nationstar Mortgage Holdings Inc. logo seen displayed on a smartphone. 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. Here, Mrs. Robinson signed the Deed but did not sign the Note. Under Count I, the Robinsons allege a violation of 12 C.F.R. News Ask a Lawyer Indeed, Nationstar does not seriously contest the commonality prong. 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. 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. Filing fee paid $ 402, Receipt number AOHNDC-10680087. v. Nationstar Mortgage LLC. After March 2014, Mrs. Robinson was primarily responsible for communicating with Nationstar and PaCE. While class members would not be eligible for statutory damages unless actual damages are shown, see 12 U.S.C. Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 344 (4th Cir. 2006). 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. Although each class member must individually show that they suffered "actual damages" under 12 U.S.C. 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. DEMETRIUS ROBINSON and TAMARA ROBINSON, Plaintiffs, v. NATIONSTAR MORTGAGE LLC, Defendant. 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. Corp. ("McLean I"), 595 F. Supp. The denial letters stated that the loan's principal balance exceeded the limit under HAMP. Id. Id. 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"). 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. Cal. 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. Many impacted consumers have already received refunds and more will be contacted by the settlement administrator in the coming weeks. See Md. 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. Id. Id. See 12 C.F.R. On February 16, 2017, the Court referred the case to United States Magistrate Judge Charles B. ("Opp'n') 13, ECF No. 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. . PDF United States District Court Middle District of Florida Tampa Division . Where the cost of litigation as compared to the potential recovery gives class members little incentive to bring suit, and there is little reason to individually control the litigation, a class action is a superior method to vindicate the rights of class members. . 2010). Sept. 9, 2019), there were multiple other claims at issue, for which Oliver's expert report seemed better suited to address. Aug. 19, 2015). 3d at 1014. 2605(f)(2) is not fatal to the predominance inquiry. CFPB Director Kathleen Kraninger said in a statement. 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. Code Ann., Com. Robinson, 2015 WL 4994491, at *4 (citing Marchese v. JPMorgan Chase Bank, N.A., 917 F. Supp. Therefore, Nationstar was required to comply with section 1024.41 in processing it. Id. 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. 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. that it is improper to pay an expert witness a contingent fee." Id. The relevant rule prohibits an attorney from "offer[ing] an inducement to a witness that is prohibited by law." The Robinsons have not made any mortgage payments since January 2014 and have not been assessed any late fees since February 2014. 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. Ass'n, 375 F.2d 648, 653 (4th Cir. Co v. Adair, 764 F.3d 347, 359-60 (4th Cir. Id. is generally unproblematic as the non-injured parties can just be sorted out at the remedies phase of the suit."). 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.