LLCNo. 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. The economic challenges and burdens that homeowners currently face are similar to the ones experienced following the Great Recession. Order at 2, ECF No. 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. Since the parties do not argue that the Nationwide Class and the Maryland Subclass differ for the purposes of the class certification analysis, the Court will analyze them together. Fla. 2009), aff'd, 398 F. App'x 467, 471 (11th Cir. They have a home in Damascus, Maryland purchased by Demetrius Robinson ("Mr. Robinson"). TDC-14-3667 (D. Md. 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. Law 13-301(1). R. Civ. 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 Court will therefore deny the Motion for Summary Judgment as to this argument. Through both a declaration by a Nationstar Vice President of Default Servicing, Brandon Anderson, and an expert report by Stuart D. Gurrea, Nationstar contests Oliver's analysis and endeavors to establish that the only way to identify RESPA violations using Nationstar's data is through a file-by-file review. 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. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 348-49 (2011) ("[A] class representative must be part of the class and possess the same interest and suffer the same injury as the class members." It follows that only borrowers may bring a claim that a loan servicer has violated Regulation X. Code Ann., Com. See Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 178 (1974) ("In determining the propriety of a class action, the question is not whether the plaintiff or plaintiffs have stated a cause of action or will prevail on the merits, but rather whether the requirements of Rule 23 are met."). 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. Id. 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. Id 1024.41(c)(1). Signed by Judge Theodore D. Chuang on 8/18/2015. Code Ann., Com. Robinson, 2015 WL 4994491, at *4 (citing Marchese v. JPMorgan Chase Bank, N.A., 917 F. Supp. Furthermore, Nationstar's argument that the Robinsons are not typical largely recycles the same arguments made in the Motion for Summary Judgment. "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." See D. Md. Id. 12 C.F.R. These rights and optionsand the deadlines to exercise themare explained further on the Frequently Asked Questions page of this website and in the Notice. at 358. Mot. 15-3960, 2017 WL 623465, at *8 (D. Md. Since Mrs. Robinson may not bring a claim under Regulation X, she may not be a named class representative. The Court may rely only on facts supported in the record, not simply assertions in the pleadings. Mrs. Robinson was the primary point of contact for the Robinsons in interacting with Nationstar. 2d 754, 768-69 (D. Md. Ballard v. Blue Shield of S.W. 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. 1984), and has upheld the certification of a class with as few as 18 members, Cypress v. Newport News Gen. & Nonsectarian Hosp. 2004). Potentially eligible class members for all of these provisions can be identified through the LSAMS and Remedy data that marks that an application was received, identified as complete, and denied. 120. Whether an application is complete depends on the requirements of the investor who holds the loan. "[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.'" R. Evid. These letters are based on standard Nationstar templates, and the code reflects the type of letter sent. Because there are, at a minimum, disputed issues of fact as to what fees, administrative costs, and interest constitute damages, the Court will deny the motion for summary judgment on the issue of actual damages. 3d at 1014. In Washington v. Am. 2006). The comments to that rule state that the "common law rule in most jurisdictions is . v. Nationstar Mortgage LLC. TDC-14-3667, 2019 WL 4261696 (D. Md. Moreover, whether Nationstar engaged in a "pattern or practice" of Regulation X violations, within the meaning of 12 U.S.C. But see Sutton v. CitiMortgage, Inc., 228 F. Supp. 12 U.S.C. If a class is ascertainable, it must then satisfy all four elements of Rule 23(a): numerosity, commonality, typicality, and adequacy. 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. Id. In support of this argument, Nationstar contends that the ethical rules for attorneys prohibit contingency fee arrangements with expert witnesses. 1024.41(i). Discovery Order, ECF No. ("Opp'n') 13, ECF No. 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. 2018). Once the documents are received, the Remedy Star substatus and LSAMS code are changed again to mark the application complete. 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. Code Ann., Com. State attorneys general are here for homeowners, Raoul adds. See 12 C.F.R. See Wirtz, 886 F.3d at 719-20. If you were contacted on your cell phone by a company via an . Stewart v. Bierman, 859 F. Supp. 2002), is misplaced. MCC JR 0003. A letter noting receipt of the application is automatically generated and sent to the borrower, and a Nationstar employee checks the application's documentation to determine if it is complete based on a checklist. Because Nationstar employees used standard templates to communicate with borrowers, Oliver concluded that Regulation X violations can be identified through the existence of noncompliant templates and the dates that those templates were in use. Gym, Recreational & Athletic Equip. 2016) (dicta). In its Motion to Strike, Nationstar moves to strike the report of the Robinsons' expert witness, Geoffrey Oliver, on the grounds that (1) Oliver was hired pursuant to an ethically improper contingency fee agreement; and (2) his testimony does not meet the requirements of Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). An "unfair or deceptive" trade practice includes a "false . 2605(f)(1)(B), a borrower cannot recover these additional damages "without first recovering actual damages." Id. 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. Others, however, have concluded that "all expenses, costs, fees, and injuries fairly attributable to" a servicer's RESPA violation are damages, "even if incurred before the" violation, because the "wrongful act . . A Division of NBC Universal. 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. There is no reason to conclude that individual class members have any particular interest in individually controlling the litigation through separate actions, or that this Court is an undesirable forum to host this litigation, since Nationstar services loans in this district, is subject to jurisdiction here, and has presented no argument that Maryland is an inconvenient forum. 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. 1972). Anderson, 477 U.S. at 248. "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. After two more extensions were granted, based on a finding by the Magistrate Judge that "Defendant has failed to comply" with its discovery obligations and delayed the process, discovery closed on March 22, 2018. Fed. 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. Petitioner: NATIONSTAR MORTGAGE, LLC: Respondent: TAMARA ROBINSON and DEMETRIUS ROBINSON: Case Number: 19-379: Filed: September 24, 2019: Court: U.S. Court of Appeals . The Robinsons do not address this argument in their Opposition. For example, Nationstar's own internal procedures reveal that when a loss mitigation application is received, a processor reviews it to determine if all required information and documents have been received, and enters one code, specifically "code HMPC" in LSAMS signifying "Financial Application Complete," and a different code, specifically "code HMPA," signifying "Financial Application Incomplete." 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. Moreover, the conflict must not be "merely speculative or hypothetical." R. Civ. Cal. See, e.g., Ward v. Dixie Nat. And given that the class includes all borrowers who have submitted an application since January 10, 2014, joinder of all members is eminently impractical. A code is also added to LSAMS to put a hold on foreclosure proceedings. See 12 C.F.R. Amchem Prods. In this photo illustration, the Nationstar Mortgage Holdings Inc. logo seen displayed on a smartphone. DEMETRIUS ROBINSON and TAMARA ROBINSON, Plaintiffs, v. NATIONSTAR MORTGAGE LLC, Defendant. 20-cv, -2202, 2021 WL 4462909, at *1 (S.D. 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. (kw2s, Deputy Clerk) Download PDF Search this Case Google Scholar Google Books Legal Blogs Google Web Bing Web Google News Google News Archive Yahoo! See id. 1976). 1024.41 (2019), and the Maryland Consumer Protection Act ("MCPA"), Md. R. Evid. 2006). "There are going to be a lot of homeowners who need a home loan modification or other assistance," Raoul says. 1024.41(a). 2601 et seq. Cent. To the extent that, as Nationstar claims, such a determination could not be fully accomplished through computerized analysis alone, the resources needed to resolve this question would be even greater, such that the importance of having it resolved in a common fashion for all claims would be heightened. Plaintiffs "must present specific evidence to establish a causal link between the [servicer's] violation and their injuries." 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." 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. Life Ins. Where the deed of trust explicitly states that Mrs. Robinson is not obligated on the loan, the Court finds that she is not a borrower under RESPA and cannot bring the claim against Nationstar under Regulation X. Id. at 359-60. Under subsection (h), if a loan servicer receives a complete loss mitigation application more than 90 days before a foreclosure sale but then denies the application, the servicer must allow the borrower to appeal and must respond to the appeal within 30 days of receiving it. For the Regulation X provisions that require the servicer to communicate specific information to a borrower, Oliver's methodology involves reviewing a sample of loan files and identifying a specific communication to a borrower based on the file name. When each event occurseither the mailing of a letter or the changing of a code or substatusthe date is recorded in the databases. 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. 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. "We want to hear from you," Raoul says. Portland, OR 97208-3560. 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. If more documents are required, then the same Remedy Star substatus and LSAMS code that denote missing documents are entered. While Mr. Robinson signed the promissory note ("the Note"), the deed of trust ("the Deed"), and the balloon payment rider for the 2007 loan, Tamara Robinson ("Mrs. Robinson") signed only the Deed and balloon payment rider and did not sign the Note. 15-0925, 2015 WL 5165415, at *4 (D. Md. Ins. 1024.41(i). LLC, No. These claims do not have to be factually or legally identical, but the class claims should be fairly encompassed by those of the named plaintiffs. R. Civ. P. 23(b)(3). 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. 2d 873, 883 (D. Md. See Stillmock v. Weis Markets, Inc., 385 F. App'x 267, 275 (4th Cir. Based on his experience and review of deposition transcripts of Nationstar employees, Oliver asserts that Nationstar has computerized data from which RESPA violations may be identified, not least because Nationstar must be able to demonstrate its compliance with RESPA to regulators. Cal. Claim Your Cash Every Week! Sept. 9, 2019), there were multiple other claims at issue, for which Oliver's expert report seemed better suited to address. 12 C.F.R. While Demetrius Robinson did appeal Nationstar's March 15, 2014 offer of an in-house modification, the requirements of subsection (h) were not triggered because the offer was not a denial of a loan modification application. Furthermore, determining whether statutory damages are available will require no individualized consideration, because the pattern-or-practice claim "would be based solely on" Nationstar's conduct and can be established through sampling. 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. 2017), the United States Court of Appeals for the Eleventh Circuit held that postage costs incurred by the plaintiff to send the "initial request for information is not a cost to the borrower 'as a result of the failure' to comply with a RESPA obligation," because a violation has not occurred and will not "necessarily occur" at the time the plaintiff paid the postage. 2601-2617 (2012), specifically RESPA's implementing regulations known as "Regulation X," 12 C.F.R. 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. Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act ("Regulation X"), 78 Fed. . Finally, where Nationstar has offered no specific argument in its brief, beyond those addressed above, to refute Oliver's proffered analysis for identifying RESPA violations arising from the failure to notify borrowers of their appeal rights or the failure to exercise diligence in requesting documents based on repeated requests for the same documents, 12 C.F.R. A class action allows representative parties to prosecute not only their own claims, but also the claims of other individuals which present similar issues. 164. Tagatz, 861 F.2d at 1042; cf. The relevant rule prohibits an attorney from "offer[ing] an inducement to a witness that is prohibited by law." At this juncture, this allegation plausibly supports a finding of willful noncompliance. 1024.41(c)(1)(i). 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."). After this missed payment, Nationstar assessed a late fee. 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. 16-0307, 2017 WL 1167230, at *3 (E.D.N.C. 1990) (citing Universal Athletic favorably for this proposition). P. 23(a)(4); Ward v. Dixie Nat'l Life Ins. For the following reasons, the Motion for Summary Judgment will be GRANTED IN PART and DENIED IN PART; the Motion to Strike will be DENIED; and the Motion for Class Certification will be GRANTED IN PART and DENIED IN PART. 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. uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results." Johnson, 374 F. App'x at 873; Keen v. Ocwen Loan Servicing, LLC, No. Furthermore, according to Nationstar, to identify the content of a letter sent to a borrower, the letter itself must be viewed. At least one court has found a similar expert report by Oliver to meet the Daubert standard. In assessing this element, "numbers alone are not controlling" and a district court should consider "all of the circumstances of the case."
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