Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act ("Regulation X"), 78 Fed. In their memorandum in opposition to the Motion for Summary Judgment ("Opposition"), the Robinsons admit that they "do not have evidence that Nationstar dual tracked them" or began foreclosure proceedings while a loan modification application was pending. Co v. Adair, 764 F.3d 347, 359-60 (4th Cir. 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. Nationstar's Motion will be denied as to this claim. He asserts that damages to borrowers can be calculated based on entries in LSAMS and other data showing that fees were assessed, and that it would be possible to identify which fees would not have been assessed but for a RESPA violation. ("MCC") 2, ECF No. 2013); Poindexter v. Teubert, 462 F.2d 1096, 1097 (4th Cir. Law 13-101 to 13-411 (West 2015). "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.". (quoting East Tex. StubHub, Apple, other class action settlement checks in the mail Old Navy, Nissan, Equifax, other class action settlement payments in the mail Postmates, 1-800 Contacts, other settlement checks on the way Id. . Law 13-316(c), which requires a response to a mortgage servicing complaint or inquiry within 15 days. 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. Thorn v. Jefferson-Pilot Life Ins. Through both a declaration by a Nationstar Vice President of Default Servicing, Brandon Anderson, and an expert report by Stuart D. Gurrea, Nationstar contests Oliver's analysis and endeavors to establish that the only way to identify RESPA violations using Nationstar's data is through a file-by-file review. Robinson v. Nationstar Mortg. LLC - Casetext A code is entered in Remedy Star when the letter is sent. These letters are based on standard Nationstar templates, and the code reflects the type of letter sent. See 12 C.F.R. 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. 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. 12 U.S.C. For the foregoing reasons, Nationstar's Motion for Summary Judgment will be GRANTED IN PART and DENIED IN PART. 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. 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. Mot. 1024.41(a). Nationstar also asserts that the Robinsons have not identified evidence sufficient to support their MCPA claims. Fed. 1024.41(c)(1)(ii), which requires a servicer to respond to a completed loan modification application; or Md. 1024.41 (2019), and the Maryland Consumer Protection Act ("MCPA"), Md. Id. . 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. 2013). 2605(f). Cent. In support of this argument, Nationstar contends that the ethical rules for attorneys prohibit contingency fee arrangements with expert witnesses. He was retained by the Robinsons under an arrangement through which he is to be paid a flat fee of $125,000: $62,500 up front, with an additional $62,500 to be paid if a class is certified in this case. 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. Indeed, Mr. Robinson testified that Mrs. Robinson did not sign the Note because she did not purchase the property with him. 0 A magistrate granted preliminary approval. The servicer "is liable for any economic damages caused by the violation." 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. For example, since default fees are often paid by sources other than the borrower, such as in a short sale or refinancing, Nationstar challenges Oliver's assessment that fees identified through LSAMS can be deemed to constitute damages from RESPA violations, because the software does not reflect who paid the fee. Instead, he analyzed certain data fields that were returned by the scripts written by a different expert. 1024.41, a regulation of RESPA that outlines loss mitigation procedures. ; 78 Fed. Rather than rendering the testimony inadmissible, the fee arrangement is relevant to the expert's credibility. Deiter, 436 F.3d at 466-67. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). 1994) (noting that a single common issue is sufficient to meet the commonality requirement). Sept. 9, 2019), there were multiple other claims at issue, for which Oliver's expert report seemed better suited to address. 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. Gariety v. Grant Thornton, LLP, 368 F.3d 356, 366 (4th Cir. 2605(f). 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. See Robinson v. Nationstar Mortg. Nationstar further argues that summary judgment must be entered in its favor on the Robinsons' claims under 12 C.F.R. Potentially eligible class members for all of these provisions can be identified through the LSAMS and Remedy data that marks that an application was received, identified as complete, and denied. 2012). The next day, Nationstar sent a letter noting that the August 25 application had been received and requesting additional information. 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. Call Us Today (202) 973-0900Your Call is Confidential. Law 13-301 and 303. Code Ann., Com. Reg. In approving such a modification, Nationstar made a mistake: the underwriter working on the Robinsons' loan had erroneously double-counted their income. The public policy interest at issue was one against "stirring up litigation or promoting litigating for the benefit of the promoter rather than for the benefit of the litigant or the public," an interest not implicated in the same manner by the fee arrangement with the particular expert witness in this case. A separate Order shall issue. Universal Athletic Sales Co. v. Am. 2016) (dicta). 2d 873, 883 (D. Md. Nationstar admits that in March 2014, two months after the implementation date of Regulation X, it had not yet updated its systems to comply with the regulation. Co., 350 F.3d 1018, 1023 (9th Cir. HARRISBURG, Pa. (WHTM) Attorney General Josh Shapiro announced Monday, that his office obtained an $86.3 million settlement from Nationstar Mortgage, the country's fourth-largest mortgage . See Md. The Robinsons do not address this argument in their Opposition. Messner v. Northshore Univ. A borrower may enforce violations of these provisions through a private cause of action pursuant to 12 U.S.C. 2. Mrs. Robinson was the primary point of contact for the Robinsons in interacting with Nationstar. 2010). First, Nationstar correctly notes that Mr. Robinson, in his Motion, and Oliver, in his expert report, do not put forward any evidence establishing that the necessary prerequisites for a class action have been met with respect to the claim that Nationstar did not evaluate borrowers "for all loss mitigation options available to the borrower," in violation of 12 C.F.R. "Mortgage servicers are entrusted with handling significant financial transactions for millions of Americans, including struggling homeowners. 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. Nationstar insists that its customers agreed to receive phone calls from the mortgage loan provider, however it agreed to pay $12.1 million to avoid ongoing litigation. That provision provides, in parallel, that a loan servicer which does not comply with Regulation X is liable "to the borrower." 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. Mortgage servicers seek government aid as forebearance requests soar, 6 signs you have too much debtand how to pay it off, These states have the highest minimum wage in 2023, Taylor Swift avoided an FTX lawsuit by asking a simple question, Will student loan forgiveness pass the Supreme Court? 19-303.4 cmt.3. Nationstar Mortgage TCPA Class Action Lawsuit Settlement Accordingly, Nationstar did not send the Robinsons an acknowledgment letter within five days stating that it had received the application, as required by Regulation X. 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. Id. The company has already paid about $57.5 million in restitution to affected consumers, according to the CFPB. However, Nationstar did not comply with all requirements of Regulation X, which became effective on January 10, 2014. . Fed. Mar. . 1024.41(i). J. Likewise, Oliver's expert report provides no analysis on how Nationstar's databases allow for a systematic determination whether Nationstar failed to inform borrowers of the specific reasons for the servicer's decision to deny each loan modification option, in violation of 12 C.F.R. Campbell v. Nationstar Mortg., 611 F. App'x 288, 297-98 (6th Cir. Since neither party contends that Oliver's testimony and report are not "critical," the Court must address the Daubert challenge before reaching the question of class certification. Id. While Mrs. Robinson stated that she was conducting bookkeeping for Green Earth Services during the relevant time frame, she testified that her work was less than six hours per week, and the Robinsons have not shown that her time spent communicating with Nationstar "resulted in actual pecuniary loss" to Mr. Robinson or the business. 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. 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. "); see also 1 William Rubenstein et al., Newberg on Class Actions 2:3 (5th ed. 1024.41(f), (g). 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. Nationstar has no process for standardizing file names. Auto. 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. . Wesleyan Coll. 1024.41(b)(1), (b)(2)(i)(B), and (c)(1)(ii) and Md. 13-316(e)(1). Nationstar asserts that Oliver's testimony should be stricken because this fee arrangement includes an unethical contingency fee. That's one reason why the settlement, particularly the provisions requiring Nationstar to adhere to enhanced standards, is crucial. 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." Rules 19-303.4(b) (2018). Reg. A Division of NBC Universal. SETTLEMENT CONFERENCE ORDER by District Judge Ronald A. On November 21, 2014, the Robinsons filed suit against Nationstar on behalf of themselves and a class of similarly situated individuals nationwide. The entry under "objected" acts as a unique identifier for an electronic file, but it does not contain information about the file's substance and could in fact contain multiple submissions or documents relating to one borrower. Please check back in late January for updates. 10696, 10708 (Feb. 14, 2013) (codified at 12 C.F.R. Fed. is generally unproblematic as the non-injured parties can just be sorted out at the remedies phase of the suit."). That is not so here. 702. 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." "There are going to be a lot of homeowners who need a home loan modification or other assistance," Raoul says. See MCC JR0529-31. See supra parts I.B.1, I.B.3, I.C.1. P. 23(a)(2); Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). Nationstar broke that trust by engaging in unfair and deceptive practices," Kraninger added. LLC, No. 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. Finally, while Nationstar presented arguments for why the Robinsons have not shown damages as to most of the asserted categories, it did not advance any argument for why the interest damages claimed by the Robinsons were not attributable to Nationstar's Regulation X violations and thus is not entitled to summary judgment on that issue. Ballard v. Blue Shield of S.W. 2605(f)(1)(A); see 12 C.F.R. 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 Federal Rules of Evidence do not prohibit these kinds of arrangements. McAdams v. Nationstar Mortgage, LLC, No. 21-1087 (4th Cir. 2022) 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. at 151. 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. Id. Id. After an additional period of expert discovery relating to the class certification motion, discovery closed on December 30, 2018. EQT Prod. 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." 16-0117, 2017 WL 4347826, at *15 (D. Md. at 983. Instead, the Robinsons assert that Nationstar has not affirmatively proven that it conducted such reviews. 15-05811, 2016 WL 3055901 (N.D. Cal. The Motion will be otherwise denied. 14-3667, 2015 WL 4994491, at *1-2 (D. Md. R. Civ. A class action is a superior means for "fairly and efficiently adjudicating" whether Nationstar has violated Regulation X and section 3-316(c) of the MCPA. The trial court granted the motion over the Robinsons' objection, noting in its order that Nationstar had now waived its claim for attorney feesthe claim that had been the sole impediment to a final judgment being entered after the trial court granted Nationstar's request to reopen the evidence after entry of the initial final judgment. 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.
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