Id. Corp. ("McLean I"), 595 F. Supp. 2605(f), caused by the violation, which likely consist of administrative fees and costs, the individual recovery available for each class member would likely be low, far below the cost of litigating the claims themselves. . 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. 2605(f). 1024.41(d). P. 23(b)(3). This abandoned high school was converted into a 31-unit apartment building, number of unlawful practices in handling mortgages following the Great Recession. Nationstar has no process for standardizing file names. The Robinsons' designated expert, Geoffrey Oliver, has offered a methodology for identifying class members and when their rights under RESPA and the MCPA have been violated. 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. Here, Mrs. Robinson signed the Deed but did not sign the Note. For example, Nationstar's own internal procedures reveal that when a loss mitigation application is received, a processor reviews it to determine if all required information and documents have been received, and enters one code, specifically "code HMPC" in LSAMS signifying "Financial Application Complete," and a different code, specifically "code HMPA," signifying "Financial Application Incomplete." Nationstar Mortgage Robocall Class Action Settlement Checks Mailed 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. Appellate Win Affirms $3 Million Settlement in Class Action against Nationstar Mortgage - Tycko & Zavareei LLP Contact Us We look forward to hearing from you. Law 13-316(c), the Court will grant class certification as to those class members and claims. While Demetrius Robinson did appeal Nationstar's March 15, 2014 offer of an in-house modification, the requirements of subsection (h) were not triggered because the offer was not a denial of a loan modification application. 877-683-9363. Tagatz, 861 F.2d at 1042; cf. 2002) (affirming without addressing the propriety of the striking of the expert testimony). Nationstar further argues that the Robinsons cannot show that they suffered economic damages as a result of the violation of section 13-316. Code Ann., Com. 1024.41(h)(1), (4). "); see also 1 William Rubenstein et al., Newberg on Class Actions 2:3 (5th ed. 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. 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. After an additional period of expert discovery relating to the class certification motion, discovery closed on December 30, 2018. R. Civ. 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. (kw2s, Deputy Clerk) Download PDF Search this Case Google Scholar Google Books Legal Blogs Google Web Bing Web Google News Google News Archive Yahoo! 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. 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." Code Ann., Com. Date: September 9, 2019, Civil Action No. "Mortgage servicers are entrusted with handling significant financial transactions for millions of Americans, including struggling homeowners. United States v. Valona, 834 F.2d 1334, 1344 (7th Cir. That's one reason why the settlement, particularly the provisions requiring Nationstar to adhere to enhanced standards, is crucial. Reg. 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. 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." 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. Accordingly, the Motion is denied as to such claims. Fed. Although the parties have not offered specific details on the nature and timing of those costs and fees, it is reasonable to infer that at least some portion of them were incurred after they submitted their March 7, 2014 loan modification application and after Nationstar had violated Regulation X. "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. THEODORE D. CHUANG United States District Judge. In the case of Tony Robinson and Debra Robinson vs Nationstar Mortgage, LLC, the appeals court ruled that the lender did not actually have the right to foreclose on the property. See id. Questions? 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. While the particulars of Mr. Robinson's application process will not necessarily prove that Nationstar mishandled the applications of other individual class members, these facts fairly encompass the types of claims that would be brought by the members of the class. On July 16, 2018, the Court affirmed the Magistrate Judge's ruling and required Nationstar to produce all outstanding "records subject to discovery orders." 2605(f). 12 C.F.R. Fed. 12 U.S.C. The Fourth Circuit has stated that 74 members is "well within the range appropriate for class certification," Brady v. Thurston Motor Lines, 726 F.2d 136, 145 (4th Cir. Bouchat, 346 F.3d at 522. 12 C.F.R. 1024.41(f), (g), and (h) because there is no evidence in the record that Nationstar violated those provisions. Between July 2010 and November 2013, the Robinsons submitted and Nationstar denied three applications for a loan modification under the Home Affordable Modification Program ("HAMP"). Nationstar correctly notes that the Robinsons have not identified a false or misleading statement or representation by Nationstar in the record. 1993) (quoting Blum v. Yaretsky, 457 U.S. 991, 1001 n.13 (1982)). P. 23(b)(3). After attempts to modify their loan failed, the Robinsons filed a Class Action Complaint against Defendant Nationstar Mortgage, LLC ("Nationstar") for alleged violations of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. 1024.41(c)(1)(ii), which requires a servicer to respond to a completed loan modification application; or Md. 2005))). 1024.41(c)(1)(i). 1024.41(f), (g), and (h), and Mr. Robinson's MCPA claim under sections 13-301 and 13-303. The company has already paid about $57.5 million in restitution to affected consumers, according to the CFPB. Regulation X, which became effective on January 10, 2014, 78 Fed. Courts have wide discretion to certify a class based on their familiarity with the issues and potential difficulties arising in class action litigation. 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. Since the Rule 23(a) factors are satisfied, the Court will now consider whether the Rule 23(b)(3) predominance and superiority considerations are met. Cal. The fact that Oliver's methodology has not been subjected to peer review and that he has not published any articles about it does not invalidate it. 1024.41(b)(1). 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. . The Complaint asserts two claims. Wright et al. 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"). 3d at 1014. It is the plaintiffs who bear the burden of proving their claims. Ass'n, No. The Robinsons have not made any mortgage payments since January 2014 and have not been assessed any late fees since February 2014. On February 16, 2017, the Court referred the case to United States Magistrate Judge Charles B. Gariety v. Grant Thornton, LLP, 368 F.3d 356, 366 (4th Cir. Code Ann., Com. Although based on imperfect data, Oliver's expert report reveals that such analysis can substantially address whether Nationstar violated 12 C.F.R. In February 2014, after their income had further decreased, the Robinsons ceased making payments on the mortgage loan. Nationstar argues that summary judgment should be granted against Mrs. Robinson because she is not a "borrower" within the meaning of RESPA. at *5. Joint Record ("MCC JR") 0907. 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. Id. The Robinsons' expert had written the scripts using data dictionaries and without accessing the databases. Id. 2605(f). 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. Appellate Win Affirms $3 Million Settlement in Class Action against 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. 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. 1024.41, a regulation of RESPA that outlines loss mitigation procedures. Accordingly, a loan servicer must comply with Regulation X as to the first loss mitigation application submitted after the effective date. Before the error was discovered, Mr. Robinson appealed this offer as insufficient on April 10, 2014. Subscribe to our free newsletter right now. Nationstar also asserts that the Robinsons have not identified evidence sufficient to support their MCPA claims. On November 21, 2014, the Robinsons filed suit against Nationstar on behalf of themselves and a class of similarly situated individuals nationwide. 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. 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. 1024.41(h)(1). See Keen, 2018 WL 4111938, at *5-6. The Robinsons assert, and Nationstar does not argue otherwise, that litigation regarding Regulation X is not proceeding against Nationstar in another forum. Class Certif. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). AG Shapiro Secures $2.75 Million for Pennsylvania Mortgage Loan Nationstar Mortgage LLC v. Demetrius Robinson 2010). This assertion mischaracterizes the burden of proof in a civil case. 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. "[A]n evaluation of the merits to determine the strength of plaintiffs' case is not part of a Rule 23 analysis." 12 U.S.C. 20-cv, -2202, 2021 WL 4462909, at *1 (S.D. Fed. FCRA). 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. 2. After they became delinquent on their loan, the Robinsons submitted another loan modification application to Nationstar on March 7, 2014. 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. 2605(f)(1)(B), a borrower cannot recover these additional damages "without first recovering actual damages." Id. The Federal Rules of Evidence do not prohibit these kinds of arrangements. 1994) (noting that a single common issue is sufficient to meet the commonality requirement). 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. 2018). 15-0925, 2015 WL 5165415, at *4 (D. Md. Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403 (1977))). Id. 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. at 983. Commonality requires that a class have "questions of law or fact common to the class" which are capable of classwide resolution, such that the determination of the truth or falsity of the common issue "will resolve an issue that is central to the validity of each one of the claims in one stroke." Id. Some of the alleged damages are not supported in law or in fact. 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. 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). Code Ann., Com. Eligible consumers will be contacted by Nationstar or the settlement administrator about refunds under the settlement. Id. However, Nationstar did not comply with all requirements of Regulation X, which became effective on January 10, 2014. Based on the language of Regulation X, the Court finds that a loss mitigation application submitted before the effective date does not count as the single application subject to the regulation. 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. Regulation X went into effect on January 10, 2014. PDF In the United States Court of Appeals for the Fourth Circuit 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. Summary judgment will therefore be entered for Nationstar on the claims that Nationstar violated subsections (f) and (g). Compl. The ruling serves as a reminder that Florida remains one of the top states for both mortgage fraud and lender errors. Baez, 709 F. App'x at 983. 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. 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." loan" did not have standing to bring a RESPA claim); Nelson v. Nationstar Mortg. To prepare his expert report, Oliver reviewed a randomly selected sample of 400 loans serviced by Nationstar in which a loan modification application was submitted. PDF United States District Court Middle District of Florida Tampa Division