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." 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. See 12 C.F.R. Stewart v. Bierman, 859 F. Supp. See Krakauer v. Dish Network, L.L.C., 925 F.3d 643, 658 (4th Cir. Universal Athletic Sales Co. v. Am. Opp'n Mot. 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. The one-time consulting fee was paid in August 2013 to PaCE, a forensic loan auditor, to advise the Robinsons on how to communicate with Nationstar and to handle their loan. That provision provides, in parallel, that a loan servicer which does not comply with Regulation X is liable "to the borrower." uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results." From January 2014 to the present, the Robinsons have not pursued other loss mitigation options, such as a short sale. 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. Law 13-316(c), which requires a response to a mortgage servicing complaint or inquiry within 15 days. Baez, 709 F. App'x at 983. Code Ann., Com. 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. Nationstar filed a notice of settlement and a joint motion to proceed before a magistrate . 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. Nationstar's Motion to Strike will be DENIED. 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. 2004). Law 13-316(c). 702, 703. PDF NATIONSTAR MORTGAGE LLC, D/B/A MR. COOPER, Defendant. . Moreover, whether Nationstar engaged in a "pattern or practice" of Regulation X violations, within the meaning of 12 U.S.C. 1024.41(f), (g), and (h), and Md. 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. 15-3960, 2017 WL 623465, at *8 (D. Md. 1024.41(d). According to Oliver, if he used incorrect data, that was a result of the limited data fields and definitions provided to him. 1024.41(h)(1), (4). at 300. Anderson, 477 U.S. at 248. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). The fee arrangement will be considered as an issue potentially affecting the credibility, rather than the admissibility, of the expert testimony. 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. 15-0925, 2015 WL 5165415, at *4 (D. Md. 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. Code Ann., Com. 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. McLean II, 398 F. App'x at 471. See id. 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." 2014). Co., 350 F.3d 1018, 1023 (9th Cir. See 12 C.F.R. Code Ann., Com. If the named plaintiff satisfies all of the Rule 23(a) requirements and the Rule 23(b)(3) requirements, then class certification is appropriate. Ask to speak in court about the fairness of the Settlement. Signed by Judge Theodore D. Chuang on 8/18/2015. That is not so here. 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. (kw2s, Deputy Clerk) Download PDF Search this Case Google Scholar Google Books Legal Blogs Google Web Bing Web Google News Google News Archive Yahoo! 1024.41(c)(1)(i). 2010). . See 12 C.F.R. Filing fee paid $ 402, Receipt number AOHNDC-10680087. Am. Md. 10696, 10708 (Feb. 14, 2013) (codified at 12 C.F.R. 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. (quoting 7AA Charles Allan Wright et al., Federal Practice and Procedure 1778 (3d ed. R. Civ. The cases cited by the Robinsons do not alter the Court's conclusion. 1024.41(b)(2)(B). Nationstar ultimately became the servicer of the Robinsons' loan. 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. 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. 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. 125. For example, in EQT, the court concluded that a proposed class of all individuals who owned an interest in a gas estate was not ascertainable because the actual owners could be determined only through an individualized review of land records. Indeed, Nationstar does not seriously contest the commonality prong. TDC-14-3667, 2019 WL 4261696 (D. Md. 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. See id. See MCC JR0529-31. It follows that only borrowers may bring a claim that a loan servicer has violated Regulation X. The Robinsons own a business called Green Earth Services, which provides waste and recycling services to clients. 1988) (distinguishing between a rule of professional conduct and admissibility of evidence); cf. Mortgage servicers seek government aid as forebearance requests soar, How this 39-year-old earns $26,000 a year in California. 2005))). PDF PUBLISHED - United States Court of Appeals for the Fourth Circuit 1024.41(a). Regulation X went into effect on January 10, 2014. Like the class members, to prove his case, Mr. Robinson will have to show that Nationstar failed to timely and appropriately respond to his loan modification applications by pointing to the dates of his submissions and the dates and contents of Nationstar's responses. the same interest in establishing the liability of defendants." See Wirtz, 886 F.3d at 719-20. Neither the rule nor the comment, however, state whether Maryland is one such jurisdiction. 2007)), aff'd sub nom. The proposed settlement with the CFPB requires Nationstar to pay $73 million in restitution to affected borrowers, as well as a $1.5 million civil penalty to the agency. Mrs. Robinson was the primary point of contact for the Robinsons in interacting with Nationstar. 2003). At the time, Nationstar had not completed the process of updating its systems to conform to those requirements. Robinson et al v. Nationstar Mortgage LLC, No. 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). 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. After several customers of Green Earth Services canceled its services, the Robinsons sought loss mitigation in the form of a loan modification from Nationstar. 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. 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. 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. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. The comments to that rule state that the "common law rule in most jurisdictions is . The economic challenges and burdens that homeowners currently face are similar to the ones experienced following the Great Recession. Indeed, Mr. Robinson testified that Mrs. Robinson did not sign the Note because she did not purchase the property with him. An 85-year Harvard study found the No. at 300. Your Email Please enter your email. 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. 1024.41(c)(1)(i)-(ii), (g). 2010). 19-303.4 cmt.3. It will be otherwise denied. ; 78 Fed. 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. Finally, the Court finds that Mr. Robinson will adequately represent the absent class members. See Tagatz, 861 F.2d at 1042. When each event occurseither the mailing of a letter or the changing of a code or substatusthe date is recorded in the databases. MCC JR 0003. at 151. Many impacted consumers have already received refunds and more will be contacted by the settlement administrator in the coming weeks. Although the Robinsons contend that they would have pursued other loss mitigation options in the absence of the RESPA violations, they have not identified any such options in a way that would permit a calculation of damages associated with any lost opportunity. at 359-60. Although this data was not provided to Oliver, there is no reason it could not be produced and used to make determinations on the timeliness of decisions on loss mitigation applications. Robinson v. Nationstar Mortg. LLC | 2015 WL 4994491 | D. Md. | Judgment Instead, the Robinsons assert that Nationstar has not affirmatively proven that it conducted such reviews. 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. . Code Ann., Com. In Frank v. J.P. Morgan Chase Bank, N.A., No. 2605(f). 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. 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." A conflict of interest will not defeat the adequacy requirement when "all class members share common objectives[,] the same factual and legal positions, and . Nationstar Mortgage agreed to settle an action commenced by the Consumer Financial Protection Bureau for $91 million to resolve allegations surrounding mortgage servicing misconduct and deceptive practices that resulted in financial harm to borrowers. EQT Prod. 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. Finally, while Nationstar presented arguments for why the Robinsons have not shown damages as to most of the asserted categories, it did not advance any argument for why the interest damages claimed by the Robinsons were not attributable to Nationstar's Regulation X violations and thus is not entitled to summary judgment on that issue. DEMETRIUS ROBINSON and TAMARA ROBINSON, Plaintiffs, v. NATIONSTAR MORTGAGE LLC, Defendant. Under Count I, the Robinsons allege a violation of 12 C.F.R. A fact is "material" if it "might affect the outcome of the suit under the governing law." Joint Record ("MSJ JR") 0102. Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. A class action allows representative parties to prosecute not only their own claims, but also the claims of other individuals which present similar issues. TDC-14-3667 (D. Md. 1024.41(f), (g). Auto. Robinson v. Nationstar Mortg. LLC, Civil Action No. TDC-14-3667 Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403 (1977))). 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. Accordingly, Nationstar's Motion for Summary Judgment will be granted as to the MCPA claims under sections 13-301 and 13-303. 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. . 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." In the Amended Complaint, the Robinsons claim that Nationstar's representations that it offered many loss mitigation plans and "would evaluate" borrowers "for eligibility for all these loss mitigation plans" were false. 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. Write to the Court if you do not like the Settlement. 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. 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." See Torres v. Mercer Canyons Inc., 835 F.3d 1125, 1137 (9th Cir. at *2. 26-1. Code Ann., Com. Fed. Moreover, the conflict must not be "merely speculative or hypothetical." Id. Nationstar claims that manual review of each file would take about 60 to 90 minutes per file. Nationstar's Motion will be denied as to this claim. "[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.'" It is the plaintiffs who bear the burden of proving their claims. 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." See supra parts I.B.1, I.B.3, I.C.1. at 983. After an additional period of expert discovery relating to the class certification motion, discovery closed on December 30, 2018. Md. 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. Corp., 546 F.2d 530, 538-39 (3d Cir. 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." Wesleyan Coll. Id. Nationstar argues that summary judgment should be granted against Mrs. Robinson because she is not a "borrower" within the meaning of RESPA. Consumer Financial Protection Bureau and Multiple States Enter into 12 C.F.R. 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. That's one reason why the settlement, particularly the provisions requiring Nationstar to adhere to enhanced standards, is crucial. 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. Ward, 595 F.3d at 180 (quoting Gunnells, 348 F.3d at 430). The CFPB estimates about 40,000 borrowers were harmed by Nationstar's allegedly unfair and deceptive practices, according to a statement released Monday. 2d 873, 883 (D. Md. . 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. FCRA). Nationstar said in a statement that its settlements were based on "loan-servicing practices" that the company used between 2010 and 2015 and has since discontinued. A $3.8 million settlement has been reached in a Nationstar convenience fee class action lawsuit, which claimed that the mortgage lender wrongfully charged convenience fees to their consumers when making payments on past due accounts. THEODORE D. CHUANG United States District Judge. . 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. Appellate Win Affirms $3 Million Settlement in Class Action against Nationstar Mortgage - Tycko & Zavareei LLP Contact Us We look forward to hearing from you. On February 16, 2017, the Court referred the case to United States Magistrate Judge Charles B. The ruling serves as a reminder that Florida remains one of the top states for both mortgage fraud and lender errors. 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. In analyzing this question, a court compares the class representative's claims and defenses to those of the absent class members, considers the facts needed to prove the class representative's claims, and assesses the extent to which those facts would also prove the claims of the absent class members. 2d 452, 468 (D. Md. "[A]n evaluation of the merits to determine the strength of plaintiffs' case is not part of a Rule 23 analysis." 2013)). CFPB Takes Action Against Nationstar Mortgage for Flawed Mortgage Loan 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. Lembach v. Bierman, 528 F. App'x 297 (4th Cir. 2018); Renfroe v. Nationstar Mortg., LLC, 822 F.3d 1241, 1247 n.4 (11th Cir. The Court may rely only on facts supported in the record, not simply assertions in the pleadings. The court, however, did not explain how in the absence of any obligation to pay back to the Note, the plaintiff qualified as a "borrower" under the RESPA statute. 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. Signed by Magistrate Judge Jillyn K Schulze on 9/9/2016 . . 2011) ("[T]he possibility that a well-defined class will nonetheless encompass some class members who have suffered no injury . Id. 1024.41(c)(1)(i). Mot. 222. See McGraw, 646 F.2d at 176. 15-05811, 2016 WL 3055901 (N.D. Cal. After March 2014, Mrs. Robinson was primarily responsible for communicating with Nationstar and PaCE. ("Opp'n') 13, ECF No. P. 23(b)(3). Code Ann., Com. Reg. 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] . 2d 1360, 1366 (S.D. 1024.41(b)(1), (b)(2)(i)(B), and (c)(1)(ii) and Md. Subscribe to our free newsletter right now. As of November 22, about 2.8 million homeowners were in a forbearance plan, according to the latest research from the Mortgage Bankers Association. Law 13-101 to 13-411 (West 2015). 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." 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. Notably, Oliver's analysis did not consider foreclosure information because the data produced did not include dates of foreclosure sales. 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." or misleading oral or written statement . 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. Law 13-301 and 303. Those claims arose from Nationstar's alleged Fed. Gariety v. Grant Thornton, LLP, 368 F.3d 356, 366 (4th Cir. 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. 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. Life Ins. Finally, the named plaintiff must "fairly and adequately protect the interests of class" without a conflict of interest with the absent class members. 2015) (holding that Regulation X did not apply to loss mitigation applications submitted before the effective date).
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