Nationstar broke that trust by engaging in unfair and deceptive practices," Kraninger added. The Complaint asserts two claims. 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). 125. When Nationstar received the application, it prevented late fees from being assessed and put a hold on any foreclosure proceedings. 19-303.4 cmt.3. Bouchat v. Balt. "); see also 1 William Rubenstein et al., Newberg on Class Actions 2:3 (5th ed. See 12 C.F.R. The cases cited by the Robinsons do not alter the Court's conclusion. (quoting East Tex. Corp. ("McLean II"), 398 F. App'x 467, 471 (11th Cir. 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. But see Sutton v. CitiMortgage, Inc., 228 F. Supp. The Robinsons' expert had written the scripts using data dictionaries and without accessing the databases. . On July 16, 2018, the Court affirmed the Magistrate Judge's ruling and required Nationstar to produce all outstanding "records subject to discovery orders." On November 21, 2014, the Robinsons filed suit against Nationstar on behalf of themselves and a class of similarly situated individuals nationwide. Discovery Order, ECF No. 2601 et seq. Regulation X, which became effective on January 10, 2014, 78 Fed. 1024.41(i). Nationstar's reliance on Accrued Financial Services v. Prime Retail, Inc., 298 F.3d 291 (4th Cir. See id. (2012), and the Maryland Consumer Protection Act ("MCPA"), Md. 1024.41(f), (g), and (h), and Md. at 248-49. 2002), is misplaced. 14-3667, 2015 WL 4994491, at *1-2 (D. Md. . 12 C.F.R. 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. 2018); Renfroe v. Nationstar Mortg., LLC, 822 F.3d 1241, 1247 n.4 (11th Cir. PO Box 3560. 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. See Tagatz, 861 F.2d at 1042. Nationstar's Motion to Strike will be DENIED. 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] . 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. Joint Record ("MSJ JR") 0102. 2015). Ass'n, No. Although similar to Rule 23(a)'s commonality requirement, the test for predominance under Rule 23(b)(3) is "far more demanding" and "tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation." 1024.41(f), (g), and (h) and Md. 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. Code Ann., Com. 3d 249, 266 (D. Md. While Mr. Robinson sought to reduce his monthly mortgage payment in applying for a loan modification, his deposition testimony reflects that he understands that the present lawsuit contends that Nationstar did not process the Robinsons' loan modification application correctly. Tagatz v. Marquette Univ., 861 F.2d 1040, 1042 (7th Cir. When each event occurseither the mailing of a letter or the changing of a code or substatusthe date is recorded in the databases. . Nationstar also argues that Oliver's report should be stricken as unreliable under the Federal Rules of Evidence and Daubert. R. Civ. 12 U.S.C. See Tyson Foods v. Bouaphakeo, 136 S. Ct. 1036, 1045 (2016) ("When 'one or more of the central issues in the action are common to the class and can be said to predominate, the action may be considered proper under Rule 23(b)(3) even though other important matters will have to be tried separately, such as damages or some affirmative defense peculiar to some individual class members.'" 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 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. Part 1024). If you are a member of the Settlement Class, you must submit a completed Claim Form to receive a payment. 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. 15-0925, 2015 WL 5165415, at *4 (D. Md. 2605(f). Fed. 2010). See 12 C.F.R. FCRA). P. 23(a)(4); Ward v. Dixie Nat'l Life Ins. All but $28.6 million of its. 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. See Keen, 2018 WL 4111938, at *5-6. 1988) (distinguishing between a rule of professional conduct and admissibility of evidence); cf. Finally, the Court finds that common issues of law and fact predominate. Id. (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"). . 2011) ("[T]he possibility that a well-defined class will nonetheless encompass some class members who have suffered no injury . 16-0117, 2017 WL 4347826, at *15 (D. Md. 2004). Nationstar correctly notes that the Robinsons have not identified a false or misleading statement or representation by Nationstar in the record. Nov. 12, 2011), the court held that a plaintiff who signed a deed of trust on a property and was a joint tenant with her son, but did not sign the promissory note, had constitutional standing to bring a RESPA claim because she stood to be injured if a default on her son's loan led to the loss of her equitable interest in the property. Regulation X's effective date reflected "an intent not to apply it to conduct occurring prior to that date." 2001) (striking expert testimony because of a contingent fee arrangement), aff'd, 43 F. App'x 547 (4th Cir. 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. Summ. Since Mr. Robinson has the same goal as the other class members of establishing that Nationstar violated Regulation X with respect to his loan, he will adequately protect their interests. Regulation X went into effect on January 10, 2014. 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. 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. P. 23(b)(3). 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." She alleges Nationstar was sent multiple disputes by both Experian and Equifax with documentation showing the debt was forgiven, yet Nationstar persisted in reporting the debt as valid. See, e.g., Ward v. Dixie Nat. The plaintiff's claim "cannot be so different from the claims of absent class members that their claims will not be advanced by" proof of the plaintiff's own individual claim. Northern District of Ohio, ohnd-1:2021-cv-00452 of 0 An error occurred while loading the PDF. Therefore, the Court will grant in part and deny in part the Motion for Class Certification. See Stillmock v. Weis Markets, Inc., 385 F. App'x 267, 275 (4th Cir. 13-316(e)(1). Where the results of such an analysis would apply to any individual claim, it would be highly inefficient and wasteful to require duplicative analysis in each such case. 2013)). 2016) ("[F]ortuitous non-injury to a subset of class members does not necessarily defeat certification of the entire class, particularly as the district court is well situated to winnow out those non-injured members at the damages phase of the litigation, or to refine the class definition. Johnson, 374 F. App'x at 873; Keen v. Ocwen Loan Servicing, LLC, No. Moreover, the conflict must not be "merely speculative or hypothetical." Specifically, the loan servicer failed to honor borrowers' loan modification agreements. Tagatz, 861 F.2d at 1042; cf. Code Ann., Com. 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. 2010) (considering consistency of results that provide finality to the defendant as favoring a finding of superiority). 1024.41(c)(1)(i)-(ii), (g). 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. Law 13-316(e), for the reasons stated above, see supra part I.B.4, the Robinsons have provided sufficient evidence to create a genuine issue of material fact whether they have suffered economic damages, in the form of administrative costs, fees, and interest. Every mortgage has a unique loan number that can be used to identify the borrower and the loan in each of the four databases. 2605(f)(1)(A)). 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. Under Count I, the Robinsons allege a violation of 12 C.F.R. Delaware Attorney General Kathleen Jennings said the settlements, Several states also fined Nationstar in 2018, Kwame Raoul, attorney general of Illinois, latest research from the Mortgage Bankers Association. DEMETRIUS ROBINSON and TAMARA ROBINSON, Plaintiffs, v. NATIONSTAR MORTGAGE LLC, Defendant. 2601-2617 (2012), specifically RESPA's implementing regulations known as "Regulation X," 12 C.F.R. 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. At this stage of the proceedings, the Court must rely on facts in the record, and not assertions in the pleadings. 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. 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. 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. 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. 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." R. Evid. The Court will address the varying claims in turn. Corp., 546 F.2d 530, 538-39 (3d Cir. 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. 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 such statements in no way promise approval, the Robinsons appear to claim that such statements are false or misleading because Nationstar never intended to, and did not, evaluate the Robinsons for the various loss mitigation options. R. Civ. Amchem Prods. Some of the alleged damages are not supported in law or in fact. If more documents are required, then the same Remedy Star substatus and LSAMS code that denote missing documents are entered. 2016) (dicta). Since the Court already considered and ruled on these issues, see supra part I.B, it will not revisit those arguments here. 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. 3d 254, 274-75 (S.D.N.Y. Lembach v. Bierman, 528 F. App'x 297 (4th Cir. 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."). which has the capacity, tendency, or effect of deceiving or misleading consumers." That claim will be subject to common proof, namely sampling and analysis of loan files along the lines suggested by Oliver. R. Civ. Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act ("Regulation X"), 78 Fed. 2010) (holding that a plaintiff who "was not a borrower or otherwise obligated on the . 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. 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. 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. Law 13 . 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. 2013); Poindexter v. Teubert, 462 F.2d 1096, 1097 (4th Cir. 1024.41(b)(2)(i)(B) and Md. at 300. This abandoned high school was converted into a 31-unit apartment building, number of unlawful practices in handling mortgages following the Great Recession. You will receive no benefits from the Settlement, but will retain any rights you currently have to sue Nationstar about the same claims in this case. 2601-2617 (2012), specifically RESPA's implementing regulations known as "Regulation X," 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. Thorn v. Jefferson-Pilot Life Ins. Id. 15-3960, 2017 WL 623465, at *8 (D. Md. 1976). Am. Notably, Oliver's analysis did not consider foreclosure information because the data produced did not include dates of foreclosure sales. 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. THEODORE D. CHUANG United States District Judge. Before the error was discovered, Mr. Robinson appealed this offer as insufficient on April 10, 2014. Although each class member must individually show that they suffered "actual damages" under 12 U.S.C. 1024.1, prescribe additional duties and responsibilities of mortgage servicers under RESPA. MCC JR 0003. 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." 2012). McLean I, 595 F. Supp. A code is also added to LSAMS to put a hold on foreclosure proceedings. Where the deed of trust explicitly states that Mrs. Robinson is not obligated on the loan, the Court finds that she is not a borrower under RESPA and cannot bring the claim against Nationstar under Regulation X. In assessing the Motion, the Court views the facts in the light most favorable to the nonmoving party, with all justifiable inferences drawn in its favor. Co, 445 F.3d 311, 318 (4th Cir. The fact that each borrower must individually show damages under 12 U.S.C. Nationstar further argues that summary judgment must be entered in its favor on the Robinsons' claims under 12 C.F.R. 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). 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. The Class Action Administrator would then begin distribution of the settlement funds. . The Nationwide Class and the Maryland Subclass are ascertainable and satisfy the Rule 23(a) factors. Class litigation would also promote consistent results on the common question whether Nationstar engaged in a pattern or practice of violating Regulation X and would provide Nationstar with finality and closure on that issue. On May 5, 2014, Nationstar asked the Robinsons for additional information to evaluate the appeal, including documents to verify their income. 1024.41(h)(1). . Portland, OR 97208-3560. uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results." Deiter, 436 F.3d at 466-67. Auto. The Robinsons appealed the Magistrate Judge's ruling because it did not require Nationstar to run a structural script for a third database. Filed by Janie Robinson. Rules 19-303.4(b) (2018). Gym, Recreational & Athletic Equip. v. Windsor, 521 U.S. 591, 623-24 (1997). Nationstar asserts that Oliver's testimony should be stricken because this fee arrangement includes an unethical contingency fee. . Id. 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. The relevant rule prohibits an attorney from "offer[ing] an inducement to a witness that is prohibited by law." After they became delinquent on their loan, the Robinsons submitted another loan modification application to Nationstar on March 7, 2014. Plaintiffs "must present specific evidence to establish a causal link between the [servicer's] violation and their injuries." 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. Law 13-301 and 13-303, because the Robinsons do not have standing to bring those claims. Co., 595 F.3d 164, 179-80 (4th Cir. R. Civ. After an additional period of expert discovery relating to the class certification motion, discovery closed on December 30, 2018. From January 2014 to the present, the Robinsons have not pursued other loss mitigation options, such as a short sale. Filing fee paid $ 402, Receipt number AOHNDC-10680087. 1987) (holding, in the context of an informant who is paid a contingent fee, that the fee should be treated "as a credibility factor"). Several states also fined Nationstar in 2018 over failing to have proper procedures in place and "unfair and deceptive" mortgage modification policies. P. 23(a)(2); Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). McAdams v. Nationstar Mortg. On June 16, 2017, the Magistrate Judge bifurcated discovery to focus initially on the merits of the Robinsons' individual claim and the question of class certification, ordered Nationstar to disclose electronic records so that the Robinsons could sample Nationstar's data for purposes of a motion for class certification, and limited the discovery of such records to a sample of 400 loans from the period from January 10, 2014 to June 30, 2014 and "to areas which inform" the Court's decision on class certification, namely whether Nationstar was in compliance with Regulation X. Mot. Eligible consumers will be contacted by Nationstar or the settlement administrator about refunds under the settlement. R. Civ. Indeed, since previous versions of the Maryland rule expressly stated that contingency fee arrangements for experts were forbidden, but that explicit language was removed, it is reasonable to conclude that the amendment changed the rule in Maryland to no longer bar contingency fee arrangements. The Final Approval Order, approving the Class-wide Settlement, was entered December 11, 2020. News Ask a Lawyer 1972). 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. Stewart v. Bierman, 859 F. Supp. at *2. 877-683-9363. The economic challenges and burdens that homeowners currently face are similar to the ones experienced following the Great Recession. Md. In Robinson v. Nationstar Mortgage LLC, No. A code is entered in Remedy Star when the letter is sent. 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.
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