Reg. According to Oliver, if he used incorrect data, that was a result of the limited data fields and definitions provided to him. At this juncture, this allegation plausibly supports a finding of willful noncompliance. 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. 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." "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. Nationstar has no process for standardizing file names. Id. 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. Although she has worked as a bookkeeper for various companies, she was not employed between March and September 2014. That notice must be provided within 30 days of receiving the complete loss mitigation application. Nationstar's failings resulted in "substantial consumer harm," CFPB Director Kathleen Kraninger said in a statement. Robinson et al v. Nationstar Mortgage LLC, No. Rules 19-303.4(b) (2018). Law 13-316(c), the Court will grant class certification as to those class members and claims. 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. The relevant rule prohibits an attorney from "offer[ing] an inducement to a witness that is prohibited by law." 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." ("Opp'n') 13, ECF No. In 2017, the CFPB fined Nationstar $1.75 million for failing to report accurate data about its mortgage transactions. Fed. at *2. 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] . 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. These fees allegedly violated the Fair Debt Collection Practices Act and the Washington state Collection Agency Act. Co., 595 F.3d 164, 179 (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 to its customers mortgage servicing complaints. 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." Some courts have held that administrative costs that predate the alleged RESPA violation cannot constitute "actual damages." Robinson v. Nationstar Mortgage, LLC Complaint with jury demand against Nationstar Mortgage, LLC. Indeed, since previous versions of the Maryland rule expressly stated that contingency fee arrangements for experts were forbidden, but that explicit language was removed, it is reasonable to conclude that the amendment changed the rule in Maryland to no longer bar contingency fee arrangements. . On July 16, 2018, the Court affirmed the Magistrate Judge's ruling and required Nationstar to produce all outstanding "records subject to discovery orders." The Nationwide Class and the Maryland Subclass are ascertainable and satisfy the Rule 23(a) factors. Nationstar sent Mr. Robinson two letters denying his loan modification application on July 17, 2014 and September 9, 2014, but there is no evidence in the record that the Robinsons submitted an appeal to either of those letters. All Rights Reserved. State attorneys general are here for homeowners, Raoul adds. R. Civ. To satisfy the numerosity requirement, the proposed class must be so numerous that "joinder of all members is impracticable." 2001) (striking expert testimony because of a contingent fee arrangement), aff'd, 43 F. App'x 547 (4th Cir. Robinson, 2015 WL 4994491, at *4 (citing Marchese v. JPMorgan Chase Bank, N.A., 917 F. Supp. The Court will not revisit this determination. Finally, to the extent that Oliver did not execute his stated methodology for identifying damages, that limitation is again based in part on Nationstar's failure to make relevant data available to him. 13-316(e)(1). Your Email Please enter your email. In Robinson v. Nationstar Mortgage LLC, No. 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. 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. "); see also 1 William Rubenstein et al., Newberg on Class Actions 2:3 (5th ed. Because of the need to protect the rights of absent plaintiffs to assert different claims and of defendants to assert facts and defenses specific to individual class members, courts must conduct a "rigorous analysis" of whether a proposed class action meets the requirements of Federal Rule of Civil Procedure 23 before certifying a class. . Fed. 1024.41(f), (g), and (h); and (4) there is no evidence of actual damages from any RESPA violation. Nationstar also does not argue that the class is not numerous, as there approximately 33,855 members who submitted loss mitigation applications from January 10, 2014 to March 30, 2014. This abandoned high school was converted into a 31-unit apartment building, number of unlawful practices in handling mortgages following the Great Recession. R. Civ. Bouchat v. Balt. 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. MCC JR 0003. On September 9, 2014, Nationstar sent Mr. Robinson a letter denying the loan modification application and stating that it could not offer him any modification because his income was not high enough to cover the mortgage payments under any modification option. 2605(f)(2). Before the error was discovered, Mr. Robinson appealed this offer as insufficient on April 10, 2014. 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. 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." See Stillmock v. Weis Markets, Inc., 385 F. App'x 267, 275 (4th Cir. 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. Home Loans, No. 2605(f)(1). 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. See Johnson v. Ocwen Loan Servicing, 374 F. App'x 868, 873 (11th Cir. You will not receive a payment if you fail to timely submit a completed Claim Form, and you will give up your right to bring your own lawsuit against the Defendant about the claims in this case. A servicer that fails to comply with Regulation X is liable for "any actual damages to the borrower as a result of the failure" to comply. Law 13-316(c) are triggered upon the submission of a loss mitigation application, while 12 C.F.R. The Robinsons have not made any mortgage payments since January 2014 and have not been assessed any late fees since February 2014. Id. Where the Robinsons may be able to show that they have suffered actual damages, their claim for statutory damages, upon a showing that Nationstar has engaged in a pattern or practice of violating Regulation X, remains viable. Nationstar ultimately became the servicer of the Robinsons' loan. 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. Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 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. v. W.R. Grace & Co., 6 F.3d 177, 188 (4th Cir. See Tagatz, 861 F.2d at 1042. A plaintiff has the burden to show that all of the necessary prerequisites for a class action have been met. 1967). In addition to the fines and restitution, Delaware Attorney General Kathleen Jennings said the settlements require Nationstar to adhere to increased "servicing standards." Where such statements in no way promise approval, the Robinsons appear to claim that such statements are false or misleading because Nationstar never intended to, and did not, evaluate the Robinsons for the various loss mitigation options. 2005))). Am. 2605(f). 10696, 10836. 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. . 20-cv, -2202, 2021 WL 4462909, at *1 (S.D. See 12 C.F.R. (kw2s, Deputy Clerk) Download PDF Search this Case Google Scholar Google Books Legal Blogs Google Web Bing Web Google News Google News Archive Yahoo! During this period, in August 2013, the Robinsons retained a forensic loan auditor, Professional Compliance Examiners ("PaCE"), and paid it $2,275 to help them communicate with Nationstar. Since the Court has already concluded that Nationstar is entitled to summary judgment on the Robinsons' claims under 12 C.F.R. Since the MCPA and Regulation X allow recovery only of "economic damages," Md. The next day, Nationstar sent a letter noting that the August 25 application had been received and requesting additional information. Lembach v. Bierman, 528 F. App'x 297 (4th Cir. Id. Law 13-301(1). 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. Nationstar will need to enhance its policies and processes around how it handles consumer complaints, performs escrow analyses and conducts audits, for example. 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. 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. For the foregoing reasons, Nationstar's Motion for Summary Judgment will be GRANTED IN PART and DENIED IN PART. 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. 2015). Anderson, 477 U.S. at 248. Local R. 105.6. 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." 2003). Thus, the Court concludes that, while Nationstar may have defenses as to some borrowers, the common proof that establishes the asserted violations, as well as the common question of whether the Robinsons can prove a pattern-or-practice violation by Nationstar, will predominate over the individual issues as to these claims. Law 13-316(c). A class action allows representative parties to prosecute not only their own claims, but also the claims of other individuals which present similar issues. Tagatz, 861 F.2d at 1042; cf. Mrs. Robinson was the primary point of contact for the Robinsons in interacting with Nationstar. For a class action brought for violations of Regulation X, a servicer is liable for "actual damages to each of the borrowers in the class" and, upon a finding of a "pattern or practice" of noncompliance, statutory damages amounting to a maximum of $2,000 per class member up to a total of the lesser of $1 million or one percent of the servicer's net worth. . 10696, 10708, provides that "[a] servicer is only required to comply with the requirements of this section for a single complete loss mitigation application for a borrower's mortgage loan account." HARRISBURG Attorney General Josh Shapiro, as part of a multistate effort, today announced that his office obtained an $86.3 million settlement from Nationstar Mortgage, the country's fourth-largest mortgage servicer. Thus, a loan servicer could not have complied with Regulation X for a loss mitigation application submitted before January 10, 2014 because there was no regulation in effect with which to comply. While class members would not be eligible for statutory damages unless actual damages are shown, see 12 U.S.C. Therefore, the Court will grant in part and deny in part the Motion for Class Certification. Those claims arose from Nationstar's alleged Class Cert. uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results." 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. That claim will be subject to common proof, namely sampling and analysis of loan files along the lines suggested by Oliver. If you were contacted on your cell phone by a company via an . A "borrower" may enforce the provisions of Regulation X pursuant to 12 U.S.C. Law 13-301 and 303. 1024.41(b)(1), (b)(2)(i)(B), and (c)(1)(ii) and Md. Some of the alleged damages are not supported in law or in fact. Since Mrs. Robinson may not bring a claim under Regulation X, she may not be a named class representative. 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. The Robinsons' Motion for Class Certification will be GRANTED IN PART and DENIED IN PART. which has the capacity, tendency, or effect of deceiving or misleading consumers." Finally, the Court finds that common issues of law and fact predominate. Once an underwriter is assigned, that employee double-checks whether the application contains all required documentation and is complete. Id. 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. 12 U.S.C. Corp. ("McLean II"), 398 F. App'x 467, 471 (11th Cir. Id. P. 23(a)(2); Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). 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." All but $28.6 million of its. Fed. 1024.41(c)(1)(i). 2013); Poindexter v. Teubert, 462 F.2d 1096, 1097 (4th Cir. 12 C.F.R. Nationstar also asserts that the Robinsons have not identified evidence sufficient to support their MCPA claims. 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. 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. 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. at 983 (quoting 12 U.S.C. Nationstar argues that summary judgment should be granted against Mrs. Robinson because she is not a "borrower" within the meaning of RESPA. Subsequent Loss Mitigation Application. The Robinsons assert that they have paid a total of $6,147.12 in unspecified fees to Nationstar. 2601 et seq. 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. Ass'n, No. Furthermore, to the extent that the Robinsons' claim is that Nationstar falsely stated that it would evaluate the Robinsons for all available loss mitigation plans, the Robinsons point only to statements in letters that the Robinsons "may" be eligible for certain non-HAMP loan modification programs. 2605(f)(2) is not fatal to the predominance inquiry. Order at 2, ECF No. A code is also added to LSAMS to put a hold on foreclosure proceedings. Id. See 12 C.F.R. Amchem Prods. Cent. See 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. An "unfair or deceptive" trade practice includes a "false . TDC-14-3667 (D. Md. 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. 1024.41 (2019), and the Maryland Consumer Protection Act ("MCPA"), Md.
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