robinson v nationstar settlement

Wesleyan Coll. 12 U.S.C. The Deed specifies that a person who signs it but "does not execute the note" is a co-signer of the Deed in order to mortgage and convey that person's interest in the Property under the terms of the Deed, but "is not personally obligated to pay the sums secured by this Security Instrument," and her consent is not required to alter the terms of the Deed or the Note. P. 23(a)(1). Robinson v. Nationstar Mortgage, LLC Complaint with jury demand against Nationstar Mortgage, LLC. . Nationstar ultimately became the servicer of the Robinsons' loan. Fla. 2009), aff'd, 398 F. App'x 467, 471 (11th Cir. 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. 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. 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. 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." 1024.41. 2014))). For the claims that rely on the timing of a response, Oliver and the Robinsons propose using changes in the Remedy Star substatus or LSAMS codes and documents stored in FileNet to identify the date a loan modification application was received or marked as complete, to identify the date a response was sent, and to count the number of days between events. . Nationstar filed a notice of settlement and a joint motion to proceed before a magistrate . Tagatz, 861 F.2d at 1042; cf. That notice must be provided within 30 days of receiving the complete loss mitigation application. 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. These rights and optionsand the deadlines to exercise themare explained further on the Frequently Asked Questions page of this website and in the Notice. Home Loans, No. Campbell v. Nationstar Mortg., 611 F. App'x 288, 297-98 (6th Cir. Therefore, the Court will grant in part and deny in part the Motion for Class Certification. Id. Law 13-316(e)(1), and "actual damages," 12 U.S.C. 3d 254, 274-75 (S.D.N.Y. 1024.41(f), (g), and (h); and (4) there is no evidence of actual damages from any RESPA violation. Code Ann., Com. Therefore, Nationstar was required to comply with section 1024.41 in processing it. 1024.41(i). 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. JA 130. Ballard v. Blue Shield of S.W. 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." May 31, 2016), the plaintiff had signed the deed of trust but not the promissory note but was nevertheless deemed to have standing because she had owned the home with a right of survivorship with her deceased husband, who had signed the note. 2013). While class members would not be eligible for statutory damages unless actual damages are shown, see 12 U.S.C. Make your practice more effective and efficient with Casetexts legal research suite. 3d at 1014. 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. Mot. Reg. In assessing this element, "numbers alone are not controlling" and a district court should consider "all of the circumstances of the case." 2605(f). which has the capacity, tendency, or effect of deceiving or misleading consumers." Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 344 (4th Cir. Reg. Certification will not be granted as to the claims under 12 C.F.R. Accordingly, Nationstar did not send the Robinsons an acknowledgment letter within five days stating that it had received the application, as required by Regulation X. Nationstar asserts that Oliver's testimony should be stricken because this fee arrangement includes an unethical contingency fee. Here, Mrs. Robinson signed the Deed but did not sign the Note. From January 2012 to December 2016, the CFPB and 50 state attorneys general claim Nationstar, which is now doing business asMr. Cooper, engaged in a number of unlawful practices in handling mortgages following the Great Recession. 2011) ("[T]he possibility that a well-defined class will nonetheless encompass some class members who have suffered no injury . 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)(1). Class Cert. at 300. The Class Action Administrator would then begin distribution of the settlement funds. Where the results of such an analysis would apply to any individual claim, it would be highly inefficient and wasteful to require duplicative analysis in each such case. A separate Order shall issue. Nationstar will need to enhance its policies and processes around how it handles consumer complaints, performs escrow analyses and conducts audits, for example. 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. . That claim will be subject to common proof, namely sampling and analysis of loan files along the lines suggested by Oliver. 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). In approving such a modification, Nationstar made a mistake: the underwriter working on the Robinsons' loan had erroneously double-counted their income. Accordingly, a loan servicer must comply with Regulation X as to the first loss mitigation application submitted after the effective date. See, e.g., Ward v. Dixie Nat. Summary judgment will therefore be entered for Nationstar on the claims that Nationstar violated subsections (f) and (g). "[A] trial court should consider the specific factors identified in Daubert where they are reasonable measures of the reliability of expert testimony." But see Ayres v. Ocwen Loan Servicing, LLC, 129 F. Supp. Messner v. Northshore Univ. Id. 2013); Poindexter v. Teubert, 462 F.2d 1096, 1097 (4th Cir. Thorn v. Jefferson-Pilot Life Ins. The use of a class action is primarily justified on the grounds of efficiency, because it advances judicial economy to resolve common issues affecting all class members in a single action. 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. Compl. Before relating the facts relevant to the Motion for Class Certification, the Court will highlight the relevant procedural history affecting the record before the Court. See id. 2d 452, 468 (D. Md. Gunnells, 348 F.3d at 427-28. Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. Although she has worked as a bookkeeper for various companies, she was not employed between March and September 2014. 1987) (holding, in the context of an informant who is paid a contingent fee, that the fee should be treated "as a credibility factor"). The Class is represented by Rafey S. Balabanian of Edelson PC. Since the Court already considered and ruled on these issues, see supra part I.B, it will not revisit those arguments here. He asserted that the amount of fees was calculated based on Nationstar's statements, but he could not specify the nature of the fees. Instead, the Robinsons assert that Nationstar has not affirmatively proven that it conducted such reviews. 14-3667, 2015 WL 4994491, at *1-2 (D. Md. However, the burden is on the plaintiffs to show that other class members exist and that their joinder is impracticable; a court may not rely on mere speculation that numerosity has been satisfied. Nationstar correctly notes that the Robinsons have not identified a false or misleading statement or representation by Nationstar in the record. See Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349, 356-57 (3d Cir. . Rather than rendering the testimony inadmissible, the fee arrangement is relevant to the expert's credibility. Code Ann., Com. Cal. 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. 2605(f). Nationstar Call Settlement Administrator. 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. Once an underwriter is assigned, that employee double-checks whether the application contains all required documentation and is complete. Code Ann., Com. Id. Because of the manner in which class discovery was conducted, see supra part II.A, Oliver did not have access to all of Nationstar's data fields for the representative sample of loans. 2012). In this photo illustration, the Nationstar Mortgage Holdings Inc. logo seen displayed on a smartphone. 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. Hickerson, 882 F.3d at 480 (quoting Cooper, 259 F.3d at 199). R. Civ. Nationstar broke that trust by engaging in unfair and deceptive practices," Kraninger added. 3d 249, 266 (D. Md. The Robinsons assert, and Nationstar does not argue otherwise, that litigation regarding Regulation X is not proceeding against Nationstar in another forum. Law 13-301 and 13-303, because the Robinsons do not have standing to bring those claims. Nationstar denies all allegations of wrongdoing and no judgment or determination of wrongdoing has been made. Ass'n, 375 F.2d 648, 653 (4th Cir. 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. 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. 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"). "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." During this time and up until September 25, 2017, Nationstar had not begun any foreclosure proceedings on the Robinsons' home. According to Oliver, if he used incorrect data, that was a result of the limited data fields and definitions provided to him. McAdams v. Nationstar Mortg. Id. Law 13-316(c), the Court will grant class certification as to those class members and claims. Law 13-303(4)-(5), 13-408. Any additional updates will be posted here. 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. Factors "pertinent" to the predominance and superiority requirements include the "class members' interests in individually controlling" the litigation, whether litigation on the matter has already been begun by other class members, whether concentrating the litigation in one forum is desirable or undesirable, and the potential difficulties managing the class action presents. Questions? 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. The Robinsons, however, have not identified any evidence that Nationstar did not intend to, and did not, conduct such evaluations. 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. If the application is denied, a notice to that effect is sent to the borrower. the same interest in establishing the liability of defendants." Similarly, since Mr. Robinson has not suffered injury under these provisions, he may not bring those claims on behalf of the class. Wright et al. HealthSystem, 669 F.3d 802, 812 (7th Cir. In its complaint, filed in federal district court in the District of Columbia, the Bureau alleges that Nationstar engaged in unfair and deceptive acts and practices in violation of the Consumer Financial Protection Act of 2010, violated the Real Estate Settlement Procedures Act (RESPA), and violated the Homeowner's Protection Act of 1998 (HPA). Because Oliver's methodology is reliable within the meaning of Federal Rule of Civil Procedure 702 and Daubert, Nationstar's Motion to Strike will be denied. Code Ann., Com. 17-0982, 2018 WL 4111938, at *5-6 (M.D. LLC, No. 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. 2601-2617 (2012), specifically RESPA's implementing regulations known as "Regulation X," 12 C.F.R. A class action allows representative parties to prosecute not only their own claims, but also the claims of other individuals which present similar issues. The Court will not revisit this determination. As of November 22, about 2.8 million homeowners were in a forbearance plan, according to the latest research from the Mortgage Bankers Association. 12 C.F.R. Feb. 14, 2017) (holding that the plaintiff sufficiently pleaded damages under the MCPA where she alleged that the defendant's failures to respond "resulted in the continual assessment of accruing interest, fees and costs on the mortgage account," as well as "stress, physical sickness, headaches, sleep deprivation, worry, and pecuniary expenses"). Lembach v. Bierman, 528 F. App'x 297 (4th Cir. See Stillmock, 385 F. App'x at 274 ("[T]here is no reasoned basis to conclude that the fact that an individual plaintiff can recover attorney's fees in addition to statutory damages of up to $1,000 will result in enforcement of [the Fair Credit Reporting Act] by individual actions of a scale comparable to the potential enforcement by way of class action."). 1984), and has upheld the certification of a class with as few as 18 members, Cypress v. Newport News Gen. & Nonsectarian Hosp. 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. After this missed payment, Nationstar assessed a late fee. 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. Id. Eligible consumers will be contacted by Nationstar or the settlement administrator about refunds under the settlement. For the requirements that hinge on the timing of a communication or response, Oliver's methodology consists of using Nationstar's data from the LSAMS and FileNet software applications relating to a sample of 400 loans to identify the dates when certain events occurredsuch as the filing of a loan modification application, when a loan modification application became complete, and the sending of an acknowledgment or decision letter to a borrowerand then counting the days between the dates to assess whether a RESPA timing requirement was satisfied. Under subsections (f) and (g), a loan servicer is not permitted to begin foreclosure proceedings or move for foreclosure judgment if "a borrower submits a complete loss mitigation application" except in certain circumstances. Nationstar also seeks summary judgment on the Robinsons' claims under the MCPA, which include claims of misleading statements in connection with the collection of consumer debts, in violation of section 13-301(1), (3) and section 13-303(4)-(5) of the MCPA, and claims that Nationstar did not respond to consumer inquiries within 15 days, in violation of section 13-316(c) of the MCPA. Sep. 9, 2019). 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. (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"). 2010) (holding that a plaintiff who "was not a borrower or otherwise obligated on the . If a borrower is experiencing issues or not getting the help needed, contact your state attorneys general. 2605(f)(2) is not fatal to the predominance inquiry. J. The cases cited by the Robinsons do not alter the Court's conclusion. "); see also 1 William Rubenstein et al., Newberg on Class Actions 2:3 (5th ed. 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. Id. 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." The Robinsons' expert had written the scripts using data dictionaries and without accessing the databases. The comments to that rule state that the "common law rule in most jurisdictions is . Under Count I, the Robinsons allege a violation of 12 C.F.R. 2010). 15-3960, 2017 WL 623465, at *8 (D. Md. Claim Your Cash Every Week! These letters are based on standard Nationstar templates, and the code reflects the type of letter sent. In addition to the fee paid to PaCE, the Robinsons also assert as damages $50.58 in administrative costs, specifically postage fees for sending information relating to their loan modification application to Nationstar, and 120 hours of time expended on the loan modification process. Because such information is stored electronically and based on objective criteria, the members of the class will be ascertainable without significant administrative burden. See Wirtz, 886 F.3d at 719-20. In response, on May 30, 2014, Mr. Robinson sent Nationstar the exact same application that he had submitted on March 7, 2014. Tagatz v. Marquette Univ., 861 F.2d 1040, 1042 (7th Cir. 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. Relevant factual and procedural background is set forth in the Court's prior Memorandum Opinion granting in part and denying in part Nationstar's partial Motion to Dismiss. loan" did not have standing to bring a RESPA claim); Nelson v. Nationstar Mortg. 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. Indeed, Mr. Robinson testified that Mrs. Robinson did not sign the Note because she did not purchase the property with him. 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. 1024.41(b)(2)(i)(B) and Md. When Nationstar received the application, it prevented late fees from being assessed and put a hold on any foreclosure proceedings. 218. 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." at *2. . Nationstar further argues that summary judgment must be entered in its favor on the Robinsons' claims under 12 C.F.R. 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. 2605(f), is common question of law and fact that Mr. Robinson and the class members would all be required prove in their individual cases in order to qualify for statutory damages. P. 23(a)(4); Ward v. Dixie Nat'l Life Ins. In Washington v. Am. Date: September 9, 2019, Civil Action No. 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), (4). 1024.41(b)(1), which requires reasonable diligence in obtaining documents and information to complete a loss mitigation application; and Md. Furthermore, Nationstar's argument that the Robinsons are not typical largely recycles the same arguments made in the Motion for Summary Judgment. 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. 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. After several customers of Green Earth Services canceled its services, the Robinsons sought loss mitigation in the form of a loan modification from Nationstar. The Nationwide Class and the Maryland Subclass are ascertainable and satisfy the Rule 23(a) factors. Rules 19-303.4(b) (2018). 2010) (considering consistency of results that provide finality to the defendant as favoring a finding of superiority). As for typicality, the named plaintiff must be "typical" of the class, such that that the class representative's claim and defenses are "typical of the claims or defenses of the class" in that prosecution of the claim will "simultaneously tend to advance the interests of the absent class members." cause[d] damages retroactively" and "transmogrifie[d]" the costs that predate the RESPA violation into damages. Every mortgage has a unique loan number that can be used to identify the borrower and the loan in each of the four databases. 16-0307, 2017 WL 1167230, at *3 (E.D.N.C. Anderson, 477 U.S. at 248. 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." 1024.41(c)(1)(ii), which requires a servicer to respond to a loan modification application within 30 days of receipt of a complete loss mitigation application and provide notice of appeal rights; 12 C.F.R. 1024.41(i). 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. See Keen, 2018 WL 4111938, at *5-6. But, Nationstar is correct that Owens-Benniefield may P. 23(b)(3). Nationstar's failings resulted in "substantial consumer harm," CFPB Director Kathleen Kraninger said in a statement. Moreover, whether Nationstar engaged in a "pattern or practice" of Regulation X violations, within the meaning of 12 U.S.C. A dispute of material fact is only "genuine" if sufficient evidence favoring the nonmoving party exists for the trier of fact to return a verdict for that party. 12 U.S.C. 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. 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. Law 13 . 2006). 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. Code Ann., Com. 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. The economic challenges and burdens that homeowners currently face are similar to the ones experienced following the Great Recession. . Regulation X, which became effective on January 10, 2014, 78 Fed. 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. 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. The Court will therefore deny the Motion for Summary Judgment as to this argument. For purposes of ascertainability, the requirements of 12 C.F.R. 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. 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. PO Box 3560. It will be otherwise denied. Corp., 546 F.2d 530, 538-39 (3d Cir. Filing fee paid $ 402, Receipt number AOHNDC-10680087. Indeed, Nationstar does not seriously contest the commonality prong. Where Accrued Financial addresses a different scenario with a different remedy, the Court does not find that it requires that the testimony of an expert witness paid on contingency fee basis must be excluded. Corp. ("McLean II"), 398 F. App'x 467, 471 (11th Cir. at 358. See id. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). R. Civ. Finally, the Court finds that common issues of law and fact predominate. 15-0925, 2015 WL 5165415, at *4 (D. Md. 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. 2605(f)(1)(A)). The settlement in the form of a consent judgment, filed in the U . Fed. ORDER Scheduling Settlement Conference for Wednesday, October 26, 2016 at 10:30 a.m.

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