Id. 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. 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. This is not the first time Nationstar has been the subject of federal and state investigations. Id. Because Oliver analyzed proprietary databases and data specifically disclosed for this litigation pursuant to a protective order, such that Oliver's peers lack access to the same information, Oliver's expert testimony is not of the type that ordinarily would be subject to peer review, and it would be unfair to require "general acceptance within a relevant scientific community." In this photo illustration, the Nationstar Mortgage Holdings Inc. logo seen displayed on a smartphone. 1024.41(c)(1)(ii), which requires a servicer to respond to a completed loan modification application; or Md. (quoting East Tex. 1967). Id. That notice must be provided within 30 days of receiving the complete loss mitigation application. Because all of the Rule 23(a) and (b)(3) requirements are met as to a class asserting violations of 12 C.F.R. See id. 2018). 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(b)(3). 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. Md. Accordingly, Nationstar's Motion for Summary Judgment will be granted as to the MCPA claims under sections 13-301 and 13-303. Id. 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. The servicer "is liable for any economic damages caused by the violation." Subsequent Loss Mitigation Application. 1024.41(c)(1)(i). 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. 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. (kw2s, Deputy Clerk) Download PDF Search this Case Google Scholar Google Books Legal Blogs Google Web Bing Web Google News Google News Archive Yahoo! Id. Gunnells, 348 F.3d at 424 (quoting Amchem, 521 U.S. at 615). R. Civ. Based on the language of Regulation X, the Court finds that a loss mitigation application submitted before the effective date does not count as the single application subject to the regulation. (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"). He is joined by 49 other Attorneys General, the District of Columbia, and other state and federal agencies. Id. 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. 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. 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. They have a home in Damascus, Maryland purchased by Demetrius Robinson ("Mr. Robinson"). 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. Code Ann., Com. . 2d 873, 883 (D. Md. A Division of NBC Universal. 120. On November 21, 2014, the Robinsons filed suit against Nationstar on behalf of themselves and a class of similarly situated individuals nationwide. Code Ann., Com. Lembach v. Bierman, 528 F. App'x 297 (4th Cir. Signed by Judge Theodore D. Chuang on 8/18/2015. Subsequent to the Court's approval, one of the objectors to the settlement filed an appeal. Id. Nationstar also argues that Oliver's report should be stricken as unreliable under the Federal Rules of Evidence and Daubert. Plaintiff and Class Representative Demetrius Robinson, along with Class Counsel Tycko & Zavareei LLP and The Bestor Law Firm, respectfully move this Court for an award of $1,300,000 in reasonable attorneys' fees and expenses, as well as a $5,000 service award for Mr. Robinson. "Since then, we have continued to invest in technology, people, and leadership to ensure that our compliance and risk management programs not only meet our regulators' expectations but also support sustainable growth and maintain our position as an industry leader.". . See, e.g. Co., 595 F.3d 164, 179-80 (4th Cir. See Tyson Foods, 136 S. Ct. at 1046-47 (holding that representative sampling was a permissible method to prove whether time spent donning and doffing gear resulted in violations of the Fair Labor Standards Act). Reg. Furthermore, the Robinsons have made a sufficient showing that a central computerized analysis of Nationstar data would substantially, if not completely, resolve questions of whether RESPA violations occurred. 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. 2006). Mr. Robinson's counsel is experienced in complex civil litigation and class action litigation. Accordingly, a loan servicer must comply with Regulation X as to the first loss mitigation application submitted after the effective date. See Johnson v. Ocwen Loan Servicing, 374 F. App'x 868, 873 (11th Cir. that it is improper to pay an expert witness a contingent fee." Your Email Please enter your email. Nationstar also asserts that the Robinsons have not identified evidence sufficient to support their MCPA claims. DEMETRIUS ROBINSON and TAMARA ROBINSON, Plaintiffs, v. NATIONSTAR MORTGAGE LLC, Defendant. In assessing the Motion, the Court views the facts in the light most favorable to the nonmoving party, with all justifiable inferences drawn in its favor. 1024.41 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. Law 13-316(c). Mar. 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. See id. From January 2014 to the present, the Robinsons have not pursued other loss mitigation options, such as a short sale. 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." A Scheduling Order was first entered on November 24, 2015, and the period for discovery was extended four times between November 2015 and January 2017. Baez, 709 F. App'x at 983. 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."). McLean II, 398 F. App'x at 471. Eligible consumers will be contacted by Nationstar or the settlement administrator about refunds under the settlement. 2601-2617 (2012), specifically RESPA's implementing regulations known as "Regulation X," 12 C.F.R. See 12 C.F.R. 2006). Id. Anderson, 477 U.S. at 248. 2002) (affirming without addressing the propriety of the striking of the expert testimony). 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. loan" did not have standing to bring a RESPA claim); Nelson v. Nationstar Mortg. J. Under Federal Rule of Civil Procedure 56(a), the Court grants summary judgment if the moving party demonstrates that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. In Frank v. J.P. Morgan Chase Bank, N.A., No. at *5. If the application is denied, a notice to that effect is sent to the borrower. On February 16, 2017, the Court referred the case to United States Magistrate Judge Charles B. The Nationstar Mortgage Unwanted Phone Calls Class Action Lawsuit is Wright, et al. For the foregoing reasons, Nationstar's Motion for Summary Judgment will be GRANTED IN PART and DENIED IN PART. Nationstar claims that manual review of each file would take about 60 to 90 minutes per file. (2012), and the Maryland Consumer Protection Act ("MCPA"), Md. The Final Approval Order, approving the Class-wide Settlement, was entered December 11, 2020. Commonality requires that a class have "questions of law or fact common to the class" which are capable of classwide resolution, such that the determination of the truth or falsity of the common issue "will resolve an issue that is central to the validity of each one of the claims in one stroke." 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). 1024.41(a). . "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." 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. Nationstar's Motion will be denied as to this claim. The comments to that rule state that the "common law rule in most jurisdictions is . Finally, the Court finds that common issues of law and fact predominate. 2605(f)(2) is not fatal to the predominance inquiry. To view the settlement agreement and consent order, please visit the CSBS's website. Law 13-316(e)(1), and "actual damages," 12 U.S.C. Where the PaCE consulting fee was a one-time fee to advise the Robinsons in their interactions with Nationstar paid in August 2013, several months before they first submitted the March 2014 loan modification application, this cost was incurred "whether or not [Nationstar] complied with its obligations." R. Civ. Law 13 . Co., 595 F.3d 164, 179 (4th Cir. Specifically, the loan servicer failed to honor borrowers' loan modification agreements. Fed. See id. uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results." Regulation X, which became effective on January 10, 2014, 78 Fed. Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 344 (4th Cir. 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. 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. This argument runs contrary to the plain language of Nationstar's own procedures, which describe the application as "complete" based on the processor's determination, leading to the referral of the complete package to an underwriter. State attorneys general are here for homeowners, Raoul adds. Every mortgage has a unique loan number that can be used to identify the borrower and the loan in each of the four databases. The Magistrate Judge ordered Nationstar to run those scripts and return the electronic data to the Robinsons. The Court will not revisit this determination. A complete loss mitigation application is "an application in connection with which a servicer has received all the information that the servicer requires from a borrower in evaluating applications for the loss mitigation options available to the borrower." A fact is "material" if it "might affect the outcome of the suit under the governing law." 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. "[A] trial court should consider the specific factors identified in Daubert where they are reasonable measures of the reliability of expert testimony." While every class member will have to establish damages, that calculation will not be "particularly complex," as it will require identifying administrative costs and fees that would not have occurred but for the RESPA violation. Sept. 29, 2017); Billings v. Seterus, Inc., 170 F. Supp. Class Cert. That claim will be subject to common proof, namely sampling and analysis of loan files along the lines suggested by Oliver. See 12 C.F.R. Id. J. 2018); Renfroe v. Nationstar Mortg., LLC, 822 F.3d 1241, 1247 n.4 (11th Cir. Although the parties have not offered specific details on the nature and timing of those costs and fees, it is reasonable to infer that at least some portion of them were incurred after they submitted their March 7, 2014 loan modification application and after Nationstar had violated Regulation X. . Class Certif. While several district courts have concluded that loss mitigation applications submitted before Regulation X's effective date do not count as the single application for which a loan servicer must comply with Regulation X, see, e.g., Farber v. Brock & Scott, LLC, No. 1990) (citing Universal Athletic favorably for this proposition). An "unfair or deceptive" trade practice includes a "false . Id. Although based on imperfect data, Oliver's expert report reveals that such analysis can substantially address whether Nationstar violated 12 C.F.R. 2015). See Farmer v. Ramsay, 159 F. Supp. 1976) (holding that while it may be unethical for a lawyer to testify on behalf of a client as an expert, "it does not necessarily follow that any alleged professional misconduct" would require exclusion of the testimony because the rules of professional conduct do "not delineate rules of evidence"); United States v. Fogel, 901 F.2d 23, 26 (4th Cir. It follows that only borrowers may bring a claim that a loan servicer has violated Regulation X. 877-683-9363. In 2017, the CFPB fined Nationstar $1.75 million for failing to report accurate data about its mortgage transactions. Sep. 9, 2019). ("MCC") 2, ECF No. 1 . . 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. 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. Sept. 2, 2015). Since Mr. Robinson has the same goal as the other class members of establishing that Nationstar violated Regulation X with respect to his loan, he will adequately protect their interests. But where the broad methodology is sound, the lack of consideration of unproduced data cannot provide a basis to strike the expert witness's testimony. On February 10, 2022, the Court of Appeals issued a decision affirming the Final Approval Order. The Federal Rules of Evidence do not prohibit these kinds of arrangements. Ballard v. Blue Shield of S.W. 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." But see Ayres v. Ocwen Loan Servicing, LLC, 129 F. Supp. 1972). "We want to hear from you," Raoul says. Discovery Order, ECF No. Ass'n, No. Actual damages may include late fees; denial of credit or access to the full amount of a credit line; out-of-pocket expenses incurred in dealing with a RESPA violation, such as expenses for preparing and copying correspondence; and lost time and inconvenience, including time spent away from employment while preparing correspondence "to the extent it resulted in actual pecuniary loss." The trial court granted the motion over the Robinsons' objection, noting in its order that Nationstar had now waived its claim for attorney feesthe claim that had been the sole impediment to a final judgment being entered after the trial court granted Nationstar's request to reopen the evidence after entry of the initial final judgment. That provision provides, in parallel, that a loan servicer which does not comply with Regulation X is liable "to the borrower." Since the MCPA and Regulation X allow recovery only of "economic damages," Md. which has the capacity, tendency, or effect of deceiving or misleading consumers." 3d 254, 274-75 (S.D.N.Y. Plaintiffs Demetrius and Tamara Robinson (the "Robinsons") have resided in a home in Damascus, Maryland that has been subject to a mortgage loan. 2605(f)(2). Therefore, the Court will grant in part and deny in part the Motion for Class Certification. 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. Code Ann., Com. 2012). 1024.41(f), (g), and (h), and Md. Nationstar correctly notes that the Robinsons have not identified a false or misleading statement or representation by Nationstar in the record. See D. Md. Class litigation would also promote consistent results on the common question whether Nationstar engaged in a pattern or practice of violating Regulation X and would provide Nationstar with finality and closure on that issue. 12 C.F.R. Those claims arose from Nationstar's alleged Before the error was discovered, Mr. Robinson appealed this offer as insufficient on April 10, 2014. MSJ JR 0284. 2010). 28, 2017). 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. 19-303.4 cmt.3. Mot. That is not so here. 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.