See Broussard, 155 F.3d at 344. Sept. 9, 2019), there were multiple other claims at issue, for which Oliver's expert report seemed better suited to address. If more documents are required, then the same Remedy Star substatus and LSAMS code that denote missing documents are entered. In 2017, the CFPB fined Nationstar $1.75 million for failing to report accurate data about its mortgage transactions. That claim will be subject to common proof, namely sampling and analysis of loan files along the lines suggested by Oliver. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. at 359-60. Ass'n, 375 F.2d 648, 653 (4th Cir. In Baez v. Specialized Loan Servicing, LLC, 709 F. App'x 979 (11th 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. 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. 222. Co v. Adair, 764 F.3d 347, 359-60 (4th Cir. 2605(f). He is joined by 49 other Attorneys General, the District of Columbia, and other state and federal agencies. From January 2014 to the present, the Robinsons have not pursued other loss mitigation options, such as a short sale. 2010) (considering consistency of results that provide finality to the defendant as favoring a finding of superiority). Thus, the nature of the proof of whether there has been a pattern or practice of RESPA violations provides substantial support for a finding of predominance. Nationstar broke that trust by engaging in unfair and deceptive practices," Kraninger added. Fed. Nationstar Call Settlement Administrator. When each event occurseither the mailing of a letter or the changing of a code or substatusthe date is recorded in the databases. 1024.41(c)(1)(ii), which requires a servicer to respond to a completed loan modification application; or Md. At least one court has found a similar expert report by Oliver to meet the Daubert standard. 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. Furthermore, Nationstar's argument that the Robinsons are not typical largely recycles the same arguments made in the Motion for Summary Judgment. The commonality requirement is also met. 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. A code is entered in Remedy Star when the letter is sent. Although based on imperfect data, Oliver's expert report reveals that such analysis can substantially address whether Nationstar violated 12 C.F.R. Every mortgage has a unique loan number that can be used to identify the borrower and the loan in each of the four databases. uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results." 1024.41(b)(1). . 2010). See Johnson v. Ocwen Loan Servicing, 374 F. App'x 868, 873 (11th Cir. Bouchat v. Balt. 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. Therefore, Nationstar was required to comply with section 1024.41 in processing it. McAdams v. Nationstar Mortg. 1024.41(d). 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. Once the documents are received, the Remedy Star substatus and LSAMS code are changed again to mark the application complete. (quoting East Tex. In February 2014, after their income had further decreased, the Robinsons ceased making payments on the mortgage loan. 8:2014cv03667 - Document 18 (D. Md. 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. The Magistrate Judge ordered Nationstar to run those scripts and return the electronic data to the Robinsons. The Court may rely only on facts supported in the record, not simply assertions in the pleadings. State attorneys general are here for homeowners, Raoul adds. 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. 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." 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(b)(2)(i)(B) and Md. Robinson, 2015 WL 4994491, at *4 (citing Marchese v. JPMorgan Chase Bank, N.A., 917 F. Supp. Here, Mrs. Robinson signed the Deed but did not sign the Note. Joint Record ("MSJ JR") 0102. The comments to that rule state that the "common law rule in most jurisdictions is . 1024.41(i). Fed. 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. The Court will not revisit this determination. 1024.41(h)(1). Cal. 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." Under the terms of the Settlement, if nothing else occurs in the litigation, then the Settlement will become effective 95 days from the date of that decision by the Court of Appeals. 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. 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. R. Civ. These events will be represented by discrete data points in Nationstar's databases, such that these violations may be proved through that data. The settlement in the form of a consent judgment, filed in the U . See Robinson v. Nationstar Mortg. According to Oliver, if he used incorrect data, that was a result of the limited data fields and definitions provided to him. 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. As a result, the Robinsons' claim that Nationstar violated certain Regulation X procedures with respect to their loan modification application and those of the class members. If the named plaintiff satisfies each of these requirements under Rule 23(a), the Court must still find that the proposed class action fits into one of the categories of class action under Rule 23(b) in order to certify the class. 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. "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.". Any additional updates will be posted here. 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. Ins. 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. FCRA). 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. Oliver is the Chief Executive Officer of Hilltop Advisors LLC, a financial services consulting, compliance audit, and accounting advisory firm, and has extensive experience conducting compliance reviews for mortgage servicers, including for compliance with loss mitigation procedures. 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.'" 1024.41(f), (g), and (h), and Md. The Robinsons' expert had written the scripts using data dictionaries and without accessing the databases. The denial letters stated that the loan's principal balance exceeded the limit under HAMP. When considering whether expert testimony is reliable or should be excluded, the court considers the following factors: "When an expert's report or testimony is 'critical to class certification,'" the district court "must make a conclusive ruling on any challenge to that expert's qualifications or submissions before it may rule on a motion for class certification." 1024.41(i). Ask to speak in court about the fairness of the Settlement. 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. Nationstar ultimately became the servicer of the Robinsons' loan. 1994) (noting that a single common issue is sufficient to meet the commonality requirement). Universal Athletic Sales Co. v. Am. 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. Fed. (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"). Likewise, although Mrs. Robinson expended time corresponding with Nationstar, she was not working for pay at the same time, and the Robinsons have not provided evidence to quantify the loss to Mr. Robinson, the only viable plaintiff here. Certification will not be granted as to the claims under 12 C.F.R. Va., Inc., 543 F.2d 1075, 1080 (4th Cir. 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 Co, 445 F.3d 311, 318 (4th Cir. 19-303.4 cmt.3. Summ. 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. The Court agrees that costs, including administrative costs, "incurred whether or not the servicer complied with its obligations" are not actual damages "caused by, or 'a result of,'" the RESPA violation, whether or not they occurred before or after the violation. On March 8, 2014, Nationstar sent to Mr. Robinson a letter stating that he was ineligible for a HAMP modification, but on March 15, 2014, it sent a different letter offering a loan modification under which Mr. Robinson would receive a reduced interest rate for two years. Id. To view the settlement agreement and consent order, please visit the CSBS's website. See Tagatz, 861 F.2d at 1042. 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." 2601 et seq. 2d at 1366. Specifically, the application itself would have to be reviewed to determine when it was stamped as received by Nationstar. 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. 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. In contrast, the Court finds that there is a genuine issue of material fact whether the administrative costs and fees incurred by the Robinsons resulted from Nationstar's RESPA violations. Individual damages would be below the cost of litigation even if each class member could establish that Nationstar's conduct consisted of a pattern or practice of violating Regulation X, because the statute limits such damages to $2,000 per borrower. News Ask a Lawyer . 2d 1360, 1366 (S.D. But see Ayres v. Ocwen Loan Servicing, LLC, 129 F. Supp. Accordingly, a loan servicer must comply with Regulation X as to the first loss mitigation application submitted after the effective date. 2014). J. that it is improper to pay an expert witness a contingent fee." Tagatz v. Marquette Univ., 861 F.2d 1040, 1042 (7th Cir. 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 13-101 to 13-411 (West 2015). 1024.41(c)(1)(i). Nationstar will need to enhance its policies and processes around how it handles consumer complaints, performs escrow analyses and conducts audits, for example. 2605(f)(2) is not fatal to the predominance inquiry. Rather than striking the testimony, the Court may need to consider permitting supplemental discovery to correct for the lack of relevant data not previously made available to Oliver. Law 13-316(c) are triggered upon the submission of a loss mitigation application, while 12 C.F.R. Law 13-316(c), which requires a response to a loan modification application within 15 days. While the date that Nationstar's systems came into compliance, is unknown, Nationstar's systematic noncompliance presents common questions of law and fact for all class members. If the initial application is complete, the substatus in Remedy Star is changed to refer the application to an underwriter for review, and an additional code is added in LSAMS. 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. DEMETRIUS ROBINSON and TAMARA ROBINSON, Plaintiffs, v. NATIONSTAR MORTGAGE LLC, Defendant. at *5. Nationstar also argues that Oliver's report should be stricken as unreliable under the Federal Rules of Evidence and Daubert. 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." Co., 595 F.3d 164, 179-80 (4th Cir. Nationstar filed a notice of settlement and a joint motion to proceed before a magistrate . Nationstar asserts that Oliver's testimony should be stricken because this fee arrangement includes an unethical contingency fee. 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. 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] . Id. WASHINGTON, D.C. 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. Since the MCPA and Regulation X allow recovery only of "economic damages," Md. 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. Local R. 105.6. 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. 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. Rules 19-303.4(b) (2018). MCC JR 318, 530-531. Discovery Order, ECF No. Cf. A Division of NBC Universal. A fact is "material" if it "might affect the outcome of the suit under the governing law." Code Ann., Com. Id. Thus, Mrs. Robinson is not "obligated" to pay the amount due on the Note and therefore is not a "borrower" for purposes of RESPA. As a result, on January 29, 2018, the Magistrate Judge granted the Robinsons' Motion to Compel in which the Robinsons had sought to have the Court order Nationstar to accept and run scripts created by the Robinsons' expert to extract the relevant data from Nationstar's databases on the sample of loans from which they could test their methodology for identifying members of the proposed classes. A conflict of interest will not defeat the adequacy requirement when "all class members share common objectives[,] the same factual and legal positions, and . When Nationstar received the application, it prevented late fees from being assessed and put a hold on any foreclosure proceedings. Specifically, the loan servicer failed to honor borrowers' loan modification agreements. Under Federal Rule of Civil Procedure 56(a), the Court grants summary judgment if the moving party demonstrates that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law.