2010). If the loan servicer denies a loan modification application where the complete application was received more than 90 days before a foreclosure sale, the servicer must allow the borrower to appeal and must respond to the appeal within 30 days of receiving it by stating in writing whether the appeal was granted and a loan modification will be offered. Cf. 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. Nationstar's reliance on Accrued Financial Services v. Prime Retail, Inc., 298 F.3d 291 (4th Cir. The Robinsons assert that they have suffered damages in the lost opportunity to have their mortgage loan modified and to pursue other loss mitigation options; in the fees, late fees, and interest that Nationstar has assessed since they became delinquent on their loan; in the lost "time and effort" which they expended in "pursuing the loss mitigation process with Nationstar" rather than trying to improve their business; and in administrative costs, including "postage, travel expenses, photocopying, scanning, and facsimile expenses." 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. Cal. Mr. Robinson's counsel is experienced in complex civil litigation and class action litigation. "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." That provision provides, in parallel, that a loan servicer which does not comply with Regulation X is liable "to the borrower." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). 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. 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. Maryland's Commissioner of Financial Regulation Announces Settlement 1998). Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403 (1977))). R. Civ. . at *2. PDF Motion for Fees - Robinson v Nationstar - Home 120. Some of the alleged damages are not supported in law or in fact. 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. 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. 10696, 10708 (Feb. 14, 2013) (codified at 12 C.F.R. Anderson, 477 U.S. at 248. The denial letters stated that the loan's principal balance exceeded the limit under HAMP. The data derived from scripts written by another expert, Abraham J. Wyner, without the benefit of seeing the databases, a process necessitated by Nationstar's unwillingness or inability to produce the relevant data. Specifically, if a loss mitigation application is received "45 days or more before a foreclosure sale," the loan servicer must provide a notice to the borrower "in writing within 5 days" of receiving it in which the servicer acknowledges receipt of the application and states whether the "application is either complete or incomplete." . Corp. ("McLean II"), 398 F. App'x 467, 471 (11th Cir. 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. 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." Finally, where Nationstar has offered no specific argument in its brief, beyond those addressed above, to refute Oliver's proffered analysis for identifying RESPA violations arising from the failure to notify borrowers of their appeal rights or the failure to exercise diligence in requesting documents based on repeated requests for the same documents, 12 C.F.R. Moreover, whether Nationstar engaged in a "pattern or practice" of Regulation X violations, within the meaning of 12 U.S.C. 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. 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. Nationstar also asserts that the Robinsons have not identified evidence sufficient to support their MCPA claims. v. Windsor, 521 U.S. 591, 623-24 (1997). 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. 1024.41 (2019), and the Maryland Consumer Protection Act ("MCPA"), Md. 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. Md. Amchem Prods. Nationstar Mortgage Convenience Fee Class Action Settlement 1024.41(i). 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). 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." 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. Once an underwriter is assigned, that employee double-checks whether the application contains all required documentation and is complete. P. 23(a)(2); Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). Id. 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." On July 16, 2018, the Court affirmed the Magistrate Judge's ruling and required Nationstar to produce all outstanding "records subject to discovery orders." Gym, Recreational & Athletic Equip. There is no reason to conclude that individual class members have any particular interest in individually controlling the litigation through separate actions, or that this Court is an undesirable forum to host this litigation, since Nationstar services loans in this district, is subject to jurisdiction here, and has presented no argument that Maryland is an inconvenient forum. 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." 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. Corp. ("McLean I"), 595 F. Supp. 1024.41(d). 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. McLean II, 398 F. App'x at 471. UNITED STATES DISTRICT COURT DISTRICT OF MARYLAND. The Court does not find such a prohibition in the Maryland Attorneys' Rules of Professional Conduct. "We will be watching the mortgage interest industry to ensure they are treating homeowners fairly and fulfilling their obligations.". at 300. Consumer Financial Protection Bureau and Multiple States Enter into 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. . Finally, the Court finds that common issues of law and fact predominate. 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. Once the documents are received, the Remedy Star substatus and LSAMS code are changed again to mark the application complete. 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. Nationstar asserts that Oliver's testimony should be stricken because this fee arrangement includes an unethical contingency fee. 2601-2617 (2012), specifically RESPA's implementing regulations known as "Regulation X," 12 C.F.R. McLean v. GMAC Mortg. Every mortgage has a unique loan number that can be used to identify the borrower and the loan in each of the four databases. 2010). Nationstar ultimately became the servicer of the Robinsons' loan. 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." 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. See 12 C.F.R. 15-0925, 2015 WL 5165415, at *4 (D. Md. The Final Approval Order, approving the Class-wide Settlement, was entered December 11, 2020. See Broussard, 155 F.3d at 344. As for the claims of errors in Oliver's analysis, although this criticism is couched as his "misunderstanding the nature of Nationstar's various databases," Nationstar largely challenges Oliver's failure to use particular data fields, some which were never made available to him. 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 13-316(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. Life Ins. that it is improper to pay an expert witness a contingent fee." 12 C.F.R. 2605(f)(1). This Court previously held that a loan modification application can be an inquiry under the MCPA that triggers a duty to respond, and that in the case of the Robinsons, the loan modification application that was "submitted at the request of Nationstar[] necessarily seeks a response." All but $28.6 million of its. Robinson v. Nationstar Mortg. LLC, Civil Action No. TDC-14-3667 These letters are based on standard Nationstar templates, and the code reflects the type of letter sent. Va., Inc., 543 F.2d 1075, 1080 (4th Cir. The Class Action Administrator would then begin distribution of the settlement funds. Claim Your Cash Every Week! Robinson et al v. Nationstar Mortgage LLC - law360.com From this methodology, Oliver concluded that Nationstar failed to inform borrowers of their appeal rights in 39 percent of the sampled loans and failed to exercise reasonable diligence by improperly requested the same documentation already provided in 18 percent of the loans. 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. . 14-3667, 2015 WL 4994491, at *1-2 (D. Md. . "[N]amed class representatives [must] demonstrate standing through a 'requisite case or controversy between themselves personally and defendants,' not merely allege that 'injury has been suffered by other, unidentified members of the class to which they belong and which they purport to represent.'" Cent. . Jennings' office said that these new standards are more robust than existing law and will be in place for three years starting in January 2021. Law 13-101 to 13-411 (West 2015). 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. Robinson v. Nationstar Mortgage, LLC Complaint with jury demand against Nationstar Mortgage, LLC. 1024.41(f), (g). At different stages in the processing of a loan modification application, Nationstar employees enter certain codes into certain databases, and certain information can be stored and accessed through those applications. It follows that only borrowers may bring a claim that a loan servicer has violated Regulation X. 1024.41(h)(1), (4). . 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. In approving such a modification, Nationstar made a mistake: the underwriter working on the Robinsons' loan had erroneously double-counted their income. 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. On November 21, 2014, the Robinsons filed suit against Nationstar on behalf of themselves and a class of similarly situated individuals nationwide. Gunnells, 348 F.3d at 424 (quoting Amchem, 521 U.S. at 615). The comments to that rule state that the "common law rule in most jurisdictions is . 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. Subsequent to the Court's approval, one of the objectors to the settlement filed an appeal. Wirtz v. Specialized Loan Servicing, LLC, 886 F.3d 713, 719-20 (8th Cir. According to Oliver, if he used incorrect data, that was a result of the limited data fields and definitions provided to him. They have claimed $141,000 in interest; $6,147.12 in fees assessed by Nationstar; $2,275 in consulting fees; $50.58 in administrative costs; and lost time and labor of approximately 120 hours; as well as punitive and statutory damages. 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." R. Civ. 3d at 1014. 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. 1024.41(h)(1), (4). 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. The Robinsons also claim as damages interest overcharges of approximately $141,000. 12 C.F.R. 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. 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. Mich. 2016), at least one district court has held that loan servicers need not comply with Regulation X if the borrower had previously submitted a loss mitigation application before the January 10, 2014 effective date, see Trionfo v. Bank of America, N.A., No. These events will be represented by discrete data points in Nationstar's databases, such that these violations may be proved through that data. See MCC JR0529-31. To view the settlement agreement and consent order, please visit the CSBS's website. In Frank v. J.P. Morgan Chase Bank, N.A., No. 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. Although section 13-316 provides a remedy only for economic damages arising from a mortgage servicer's failure to respond to an inquiry, see Md. Since the Court already considered and ruled on these issues, see supra part I.B, it will not revisit those arguments here. Fed. 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. 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 2605(f)(1)(B), a borrower cannot recover these additional damages "without first recovering actual damages." And given that the class includes all borrowers who have submitted an application since January 10, 2014, joinder of all members is eminently impractical. 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. 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. 19-303.4 cmt.3. . DEMETRIUS ROBINSON and TAMARA ROBINSON, Plaintiffs, v. NATIONSTAR MORTGAGE LLC, Defendant. In addition to the fines and restitution, Delaware Attorney General Kathleen Jennings said the settlements require Nationstar to adhere to increased "servicing standards." In Baez v. Specialized Loan Servicing, LLC, 709 F. App'x 979 (11th Cir. Nationstar Call Settlement Administrator. More Information See 12 C.F.R. Home Loans, No. A class action allows representative parties to prosecute not only their own claims, but also the claims of other individuals which present similar issues. See Robinson v. Nationstar Mortg. 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. Regulation X, which became effective on January 10, 2014, 78 Fed. But, Nationstar is correct that Owens-Benniefield may Md. Id. Any additional updates will be posted here. 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. If more documents are required, then the same Remedy Star substatus and LSAMS code that denote missing documents are entered. Ward, 595 F.3d at 180 (quoting Gunnells, 348 F.3d at 430). Nationstar broke that trust by engaging in unfair and deceptive practices," Kraninger added. Id. 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. The Robinsons, however, have not identified any evidence that Nationstar did not intend to, and did not, conduct such evaluations. 12 U.S.C. Portland, OR 97208-3560. 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. Id. 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. 2605(f). Universal Athletic Sales Co. v. Am. at 983 (quoting 12 U.S.C. Code Ann., Com. 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. Certification will also be denied as to the claim under 12 C.F.R. 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." 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. 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. See Stillmock v. Weis Markets, Inc., 385 F. App'x 267, 275 (4th Cir. Nationstar Mortgage LLC v. Demetrius Robinson 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. In its Motion to Strike, Nationstar moves to strike the report of the Robinsons' expert witness, Geoffrey Oliver, on the grounds that (1) Oliver was hired pursuant to an ethically improper contingency fee agreement; and (2) his testimony does not meet the requirements of Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). 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. 143. 2605(f)(2); Wirtz, 886 F.3d at 719-20, that the individualized damages inquiry would need to precede the award of statutory damages based on a finding of a pattern-or-practice of RESPA violations is a distinction without a difference: whether individual damages are shown before or after the pattern-or-practice liability, the common issues of liability predominate over the individualized questions of damages. First, as a threshold matter, the Court notes that in ruling on Nationstar's Motion for Summary Judgment, it will grant judgment in favor of Nationstar as to Mrs. Robinson's claims, Mr. Robinson's RESPA claims under 12 C.F.R. 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. 222. 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 to its customers mortgage servicing complaints. Since Mrs. Robinson may not bring a claim under Regulation X, she may not be a named class representative. 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. THEODORE D. CHUANG United States District Judge.