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. LLC, No. While the Nationstar employee who conducts the initial processing of an application may refer it to an underwriter based on its facial completeness, the underwriter makes the final determination of whether the application is complete and is responsible for obtaining any additional required documentation. Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403 (1977))). If the named plaintiff satisfies all of the Rule 23(a) requirements and the Rule 23(b)(3) requirements, then class certification is appropriate. Thus, Mrs. Robinson is not "obligated" to pay the amount due on the Note and therefore is not a "borrower" for purposes of RESPA. 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 Presently pending is Nationstar's Motion for Summary Judgment, Nationstar's Motion to Strike, and the Robinsons' Motion for Class Certification. 28, 2017). After March 2014, Mrs. Robinson was primarily responsible for communicating with Nationstar and PaCE. 2013). 12 U.S.C. According to Nationstar's Underwriting Workflow Procedures, which sets forth the steps followed to review loans for modifications, when a borrower submits a loan modification application, a code is entered into LSAMS and updates the loan's substatus in Remedy Star. 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. Law 13-316(c), which requires a response to a mortgage servicing complaint or inquiry within 15 days. 1972). Nationstar has no process for standardizing file names. RECITALS 2001) (striking expert testimony because of a contingent fee arrangement), aff'd, 43 F. App'x 547 (4th Cir. Therefore, Nationstar was required to comply with section 1024.41 in processing it. Code Ann., Com. Cf. Claimants will receive their payments via check. The Robinsons' Motion for Class Certification will be GRANTED IN PART and DENIED IN PART. 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. Here, even though the Robinsons' March 7, 2014 loss mitigation application was not the Robinsons' first such application, it was their first submitted after the effective date of Regulation X. 8:2014cv03667 - Document 18 (D. Md. In this photo illustration, the Nationstar Mortgage Holdings Inc. logo seen displayed on a smartphone. 2605(f)(1)(B), a borrower cannot recover these additional damages "without first recovering actual damages." Finally, the Court notes that a decision to certify a class is based on whether or not a putative class satisfies the Rule 23 factors, not on a preliminary assessment of the underlying merits of the claim. . 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. "); cf. 1024.41(a). Particularly where a class may be certified even if individualized damages calculations would be necessary, the incomplete nature of the damages analysis does not provide a basis for striking Oliver's expert testimony. 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. Case No. JA 130. 2605(f)(2). An "unfair or deceptive" trade practice includes a "false . Actual damages may also include "non-pecuniary damages, such as emotional distress and pain and suffering." 1024.41(b)(2)(B). Corp., 546 F.2d 530, 538-39 (3d Cir. 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. The comments to that rule state that the "common law rule in most jurisdictions is . 2010). Ins. Ass'n, No. Corp. ("McLean II"), 398 F. App'x 467, 471 (11th Cir. The settlement in the form of a consent judgment, filed in the U.S. District Court for the District of Columbia, resolves allegations that Nationstar, which does business as "Mr. Cooper," violated consumer protection laws. TDC-14-3667 (D. Md. A Division of NBC Universal. Local R. 105.6. 1 Nationstar later conceded that at the time the Robinsons submitted their application, it had not yet updated its systems to comply with Section 1024.41. See Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 178 (1974) ("In determining the propriety of a class action, the question is not whether the plaintiff or plaintiffs have stated a cause of action or will prevail on the merits, but rather whether the requirements of Rule 23 are met."). 10696, 10836. 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. 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. Nationstar's Motion to Strike will be DENIED. McLean v. GMAC Mortg. Id. At least one court has found a similar expert report by Oliver to meet the Daubert standard. Ohio 2014). The Robinsons complied. Thus, based on his report and experience, Oliver concludes that Nationstar "failed to comply" with Regulation X and that it is possible to "identify violations" of Regulation X "using the methodologies" he described, without the necessity of a file-by-file review. 1024.41(b)(2)(i)(B) and Md. While it is not necessary to identify every class member at the time of certification for a class to be "ascertainable," a class cannot be certified if its membership must be determined through "individualized fact-finding or mini-trials." 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. Courts have held that a person who did not sign the promissory note is not a "borrower" for the purposes of RESPA because that individual has not "assumed the loan." R. Evid. 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. Lembach v. Bierman, 528 F. App'x 297 (4th Cir. 16-0307, 2017 WL 1167230, at *3 (E.D.N.C. 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. To satisfy the numerosity requirement, the proposed class must be so numerous that "joinder of all members is impracticable." Id. Furthermore, Nationstar's argument that the Robinsons are not typical largely recycles the same arguments made in the Motion for Summary Judgment. 1024.41. 09-08213, 2011 WL 11651320 (C.D. 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. 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. 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. 3d at 1014. Some of the alleged damages are not supported in law or in fact. 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. Every mortgage has a unique loan number that can be used to identify the borrower and the loan in each of the four databases. A plaintiff has the burden to show that all of the necessary prerequisites for a class action have been met. Law 13-316(c) are triggered upon the submission of a loss mitigation application, while 12 C.F.R. HealthSystem, 669 F.3d 802, 812 (7th Cir. Signed by Judge James L Graham on 11/15/12. Life Ins. 1024.41(b)(1). R. Evid. . In Accrued Financial, the United States Court of Appeals for the Fourth Circuit held that where commercial real estate tenants assigned their potential claims against their landlords to a commercial real estate auditor under an arrangement through which the auditor would receive a percentage of any recovery in litigation, the assignments violated public policy because where the auditor's employees could testify in such litigation, the assignments "provide for supplying expert testimony for a contingent fee." "[A] trial court should consider the specific factors identified in Daubert where they are reasonable measures of the reliability of expert testimony." At a minimum, the question of when a loss mitigation application is "complete" under RESPA within the workflow of Nationstarwhether at the time of the processor's designation of the file as complete or at a later stageis a significant unresolved question of law and fact that would be common to all RESPA claims against Nationstar. Specifically, the application itself would have to be reviewed to determine when it was stamped as received by Nationstar. 26-1. Moreover, Nationstar cites no authority for the proposition that a loss mitigation application would not be deemed "complete" for purposes of RESPA upon such a formal designation, and any rule that would deem such an application incomplete in the event that an underwriter subsequently decided to ask for additional material would be entirely unworkable. 2017), the United States Court of Appeals for the Eleventh Circuit held that postage costs incurred by the plaintiff to send the "initial request for information is not a cost to the borrower 'as a result of the failure' to comply with a RESPA obligation," because a violation has not occurred and will not "necessarily occur" at the time the plaintiff paid the postage. 19-303.4 cmt.3. Where the Robinsons, after discovery, cannot point to evidence that Nationstar did not even consider or evaluate the Robinsons for loss mitigation options, they have not established the existence of a genuine issue of material fact on the issue of false or misleading statements. hbbd```b``63@$urD29 NIL5 "#>9$ 0 3 The Robinsons have not made any mortgage payments since January 2014 and have not been assessed any late fees since February 2014. 1994) (noting that a single common issue is sufficient to meet the commonality requirement). QSF Settlement Administrator. See MCC JR0529-31. Rather, the Court finds, based on the reasoning of Tagatz and Universal Athletic Sales, that the potential violation of an ethical rule does not itself make Oliver's testimony inadmissible. A dispute of material fact is only "genuine" if sufficient evidence favoring the nonmoving party exists for the trier of fact to return a verdict for that party. 1987) (holding, in the context of an informant who is paid a contingent fee, that the fee should be treated "as a credibility factor"). See, e.g., Linderman v. U.S. Bank Nat'l Ass'n, 887 F.3d 319, 321 (7th Cir. Similarly, since Mr. Robinson has not suffered injury under these provisions, he may not bring those claims on behalf of the class. 2016) (dicta). 2d 754, 768-69 (D. Md. Code Ann., Com. which has the capacity, tendency, or effect of deceiving or misleading consumers." 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. 1024.41(i). SETTLEMENT CONFERENCE ORDER by District Judge Ronald A. Section 13-316(c) governs "mortgage servicing" and, among other requirements, provides that a "servicer shall designate a contact to whom mortgagors may direct complaints and inquiries" and that the "contact shall respond in writing to each written complaint or inquiry within 15 days if requested." Several states also fined Nationstar in 2018 over failing to have proper procedures in place and "unfair and deceptive" mortgage modification policies. A code is also added to LSAMS to put a hold on foreclosure proceedings. 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. 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. Class Members included all U.S. consumers who received a robocall on their cell phone from Nationstar between October 2015 and March 2016. In Robinson v. Nationstar Mortgage LLC, No. Fed. 1976) (holding that while it may be unethical for a lawyer to testify on behalf of a client as an expert, "it does not necessarily follow that any alleged professional misconduct" would require exclusion of the testimony because the rules of professional conduct do "not delineate rules of evidence"); United States v. Fogel, 901 F.2d 23, 26 (4th Cir. ("MCC") 2, ECF No. As of November 22, about 2.8 million homeowners were in a forbearance plan, according to the latest research from the Mortgage Bankers Association. Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act ("Regulation X"), 78 Fed. Because Nationstar employees used standard templates to communicate with borrowers, Oliver concluded that Regulation X violations can be identified through the existence of noncompliant templates and the dates that those templates were in use. 325 0 obj <>stream See McGraw, 646 F.2d at 176. Indeed, Nationstar does not seriously contest the commonality prong. Id. endstream endobj 304 0 obj <. 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." 12) is GRANTED with respect to Count V and Count III against Nationstar; it is DENIED with respect to Counts I, II, and VI, and Count III against NSM. 1024.41(f), (g), and (h) because there is no evidence in the record that Nationstar violated those provisions. 218. Instead, the Robinsons assert that Nationstar has not affirmatively proven that it conducted such reviews. 3d 712, 728 (S.D. 12 C.F.R. The MCPA prohibits the use of an "unfair or deceptive trade practice" in the "[t]he extension of consumer credit" or "[t]he collection of consumer debts" and provides for a private right of action. Gunnells, 348 F.3d at 429 ("[T]he need for individualized proof of damages alone will not defeat class certification."). at 300. The distinction is crucial. Since the Court has already concluded that Nationstar is entitled to summary judgment on the Robinsons' claims under 12 C.F.R. Although based on imperfect data, Oliver's expert report reveals that such analysis can substantially address whether Nationstar violated 12 C.F.R. Id. 3d 249, 266 (D. Md. Tagatz, 861 F.2d at 1042; cf. Finally, the Court finds that Mr. Robinson will adequately represent the absent class members. Robinson v. Nationstar Mortgage, LLC 1:2021cv00452 | US District Court for the Northern District of Ohio | Justia Log In Sign Up Find a Lawyer Ask a Lawyer Research the Law Law Schools Laws & Regs Newsletters Marketing Solutions Justia Dockets & Filings Sixth Circuit Ohio Northern District Robinson v. Nationstar Mortgage, LLC Robinson v. Order, ECF No. If a borrower is experiencing issues or not getting the help needed, contact your state attorneys general. 1024.41(c)(1)(i). 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. cause[d] damages retroactively" and "transmogrifie[d]" the costs that predate the RESPA violation into damages. Specifically, the loan servicer failed to honor borrowers' loan modification agreements. . On August 26, 2014, Nationstar mailed another letter acknowledging Prior to distributing Settlement Shares, the Settlement Administrator will attempt to update . Moreover, even if the fee arrangement violated the ethical rules for attorneys, "it does not follow that evidence obtained in violation of the rule is inadmissible." Fed. 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. 2010) (holding that a plaintiff who "was not a borrower or otherwise obligated on the . : 1-855-914-4649 (Toll-Free) / 1-855-535-1813 (TTY) Nationstar, d/b/a Mr. Cooper, Consent Order. Where the PaCE consulting fee was a one-time fee to advise the Robinsons in their interactions with Nationstar paid in August 2013, several months before they first submitted the March 2014 loan modification application, this cost was incurred "whether or not [Nationstar] complied with its obligations." v. Nationstar Mortgage LLC Nationstar Call Settlement Administrator PO Box 3560 Portland, OR 97208-3560 877-683-9363 Class Counsel Rafey S. Balabanian EDELSON PC Defense Counsel Abraham J. Colman Raymond Y. Kim REED SMITH LLP See Farber, 2017 WL 4347826 at 15; Billings, 170 F. Supp. The Robinsons, however, have not identified any evidence that Nationstar did not intend to, and did not, conduct such evaluations. See Wirtz, 886 F.3d at 719-20. Law 13-301 and 13-303, because the Robinsons do not have standing to bring those claims. 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."). 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. See Krakauer v. Dish Network, L.L.C., 925 F.3d 643, 658 (4th Cir. In December 2020, Nationstar (d/b/a Mr. Cooper) reached a settlement with the CFPB, the State Attorneys General, and certain state mortgage regulators to resolve old regulatory matters. or other representation . 164. As to the third denial on November 7, 2013, Nationstar informed the Robinsons that the loan modification application was denied because the mortgage loan was not in default. 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. "There are going to be a lot of homeowners who need a home loan modification or other assistance," Raoul says. The Magistrate Judge ordered Nationstar to run those scripts and return the electronic data to the Robinsons. 2605(f)(1)(A)). Finally, a loan servicer "is only required to comply with the requirements" of section 1024.41 "for a single complete loss mitigation application for a borrower's mortgage loan account." Finally, the named plaintiff must "fairly and adequately protect the interests of class" without a conflict of interest with the absent class members. 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. Wesleyan Coll. Moreover, whether Nationstar engaged in a "pattern or practice" of Regulation X violations, within the meaning of 12 U.S.C. Finally, the Court finds that common issues of law and fact predominate. 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." 2010). even after that settlement was reached. 1024.41(h)(1), (4). The Motions are fully briefed, and no hearing is necessary to resolve the issues. Fla. 2009), aff'd, 398 F. App'x 467, 471 (11th Cir. State attorneys general are here for homeowners, Raoul adds. Campbell v. Nationstar Mortg., 611 F. App'x 288, 297-98 (6th Cir. 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. A complete loss mitigation application is "an application in connection with which a servicer has received all the information that the servicer requires from a borrower in evaluating applications for the loss mitigation options available to the borrower." Fed. P. 23(a)(2); Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). Fed. Cent. If the initial application is not complete, a different Remedy Star substatus notation and LSAMS code are entered, and a letter is created and sent to the borrower asking for the required documents. Because of the manner in which class discovery was conducted, see supra part II.A, Oliver did not have access to all of Nationstar's data fields for the representative sample of loans. They have a home in Damascus, Maryland purchased by Demetrius Robinson ("Mr. Robinson"). The Court will therefore deny the Motion for Summary Judgment as to this argument. Settlement Pool $12,100,000 Settlement Website Nationstar Class Action Settlement Deadline 04/11/2016 Contact Wright et al. Id. 315 0 obj <>/Filter/FlateDecode/ID[<55C1F5748AC7BD4BA7D3FF89F6EDC6DB>]/Index[303 23]/Info 302 0 R/Length 79/Prev 236518/Root 304 0 R/Size 326/Type/XRef/W[1 3 1]>>stream Current Outline Item. Code Ann., Com. See 12 C.F.R. 0 303 0 obj <> endobj 15-05811, 2016 WL 3055901 (N.D. Cal. 2012) (citing Lloyd v. Gen. Motors Corp., 916 A.2d 257, 277 (Md. A separate Order shall issue. 1024.41(a). P. 23(a)(4); Ward v. Dixie Nat'l Life Ins. See 12 C.F.R. (quoting East Tex. Robinson v. Nationstar Mortgage, LLC. On August 20, 2014, when Mrs. Robinson called to check on the status of the application, a Nationstar representative told her that the paperwork had gone to the wrong loss mitigation division and that the Robinsons needed to submit their application again. Gariety v. Grant Thornton, LLP, 368 F.3d 356, 366 (4th Cir. Mot. . 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. .
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