More importantly, while a determination of an individual violation would not require extensive analysis, specific proof of a pattern or practice of RESPA violations in any individual case would be a substantial undertaking, likely requiring the same type of complex analysis proposed here: a sampling of Nationstar files, compilation of all relevant data for such files, expert analysis to identify violations, and an assessment whether the identified violations are sufficient to establish a pattern or practice of violations. Law 13-316(c), which requires a response to a mortgage servicing complaint or inquiry within 15 days. 222. 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. If the settlements are approved by the D.C. district court, Nationstar will be required to immediately set aside about $15.6 million to pay borrowers it has not yet remediated. 10696, 10836. The Robinsons own a business called Green Earth Services, which provides waste and recycling services to clients. 3d 254, 274-75 (S.D.N.Y. 15-05811, 2016 WL 3055901 (N.D. Cal. Thus, based on his report and experience, Oliver concludes that Nationstar "failed to comply" with Regulation X and that it is possible to "identify violations" of Regulation X "using the methodologies" he described, without the necessity of a file-by-file review. See Keen, 2018 WL 4111938, at *5-6. 1987) (holding, in the context of an informant who is paid a contingent fee, that the fee should be treated "as a credibility factor"). Docket for Robinson v. Nationstar Mortgage LLC, 8:14-cv-03667 Brought to you by the RECAP Initiative and Free Law Project, a non-profit dedicated to creating high quality open legal information. 1024.41, a regulation of RESPA that outlines loss mitigation procedures. 1967). 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. Summ. Co, 445 F.3d 311, 318 (4th Cir. 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. Moreover, the conflict must not be "merely speculative or hypothetical." From January 2014 to the present, the Robinsons have not pursued other loss mitigation options, such as a short sale. Anderson, 477 U.S. at 248. Thus, Mrs. Robinson is not "obligated" to pay the amount due on the Note and therefore is not a "borrower" for purposes of RESPA. At least one court has found a similar expert report by Oliver to meet the Daubert standard. You will receive no benefits from the Settlement, but will retain any rights you currently have to sue Nationstar about the same claims in this case. 1024.41(i). 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. They have claimed $141,000 in interest; $6,147.12 in fees assessed by Nationstar; $2,275 in consulting fees; $50.58 in administrative costs; and lost time and labor of approximately 120 hours; as well as punitive and statutory damages. 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). Indeed, Mr. Robinson testified that Mrs. Robinson did not sign the Note because she did not purchase the property with him. 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. 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. 2601(a). 164. Law 13-316(e)(1), and "actual damages," 12 U.S.C. Questions? Robinson, 2015 WL 4994491, at *4 (citing Marchese v. JPMorgan Chase Bank, N.A., 917 F. Supp. 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. 12 C.F.R. Although each class member must individually show that they suffered "actual damages" under 12 U.S.C. 1024.41(i). Cent. R. Civ. 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. JA 130. Signed by Magistrate Judge Jillyn K Schulze on 9/9/2016 . "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. Amchem Prods. 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 "Nationwide Class" is composed of "[a]ll persons in the United States that submitted a loss mitigation application to Nationstar after January 10, 2014, and through the date of the Court's certification order." . 2605(f)(1)(A)). The Court will address the varying claims in turn. Rule 702 permits an expert to testify if the testimony "will help the trier of fact to understand the evidence or to determine a fact in issue," "is based on sufficient facts or data," and "is the product of reliable principles and methods," and if the expert has "reliably applied the principles and methods to the facts of the case." Mot. In assessing this element, "numbers alone are not controlling" and a district court should consider "all of the circumstances of the case." 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. 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] . 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. Nationstar has no process for standardizing file names. Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 344 (4th Cir. Date: September 9, 2019, Civil Action No. If more documents are required, then the same Remedy Star substatus and LSAMS code that denote missing documents are entered. Nationstar's Motion to Strike will be DENIED. Co., 595 F.3d 164, 179 (4th Cir. Moreover, although the court stated that an arrangement for providing expert testimony for a contingent fee would violate public policy, the court did not address the question of the admissibility of evidence at issue here. 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." 2015). Tagatz, 861 F.2d at 1042; cf. The Motions are fully briefed, and no hearing is necessary to resolve the issues. 1024.41(f), (g), and (h) and Md. 2010). Petitioner: NATIONSTAR MORTGAGE, LLC: Respondent: TAMARA ROBINSON and DEMETRIUS ROBINSON: Case Number: 19-379: Filed: September 24, 2019: Court: U.S. Court of Appeals . Wesleyan Coll. 13-316(e)(1). 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. McLean v. GMAC Mortg. Id. See, e.g., Ward v. Dixie Nat. According to Oliver, to determine that certain disclosures or specific information were conveyed to borrowers, the "objectid" field used in FileNet can be used to identify the type of letter sent. (kw2s, Deputy Clerk) Download PDF Search this Case Google Scholar Google Books Legal Blogs Google Web Bing Web Google News Google News Archive Yahoo! On June 16, 2017, the Magistrate Judge bifurcated discovery to focus initially on the merits of the Robinsons' individual claim and the question of class certification, ordered Nationstar to disclose electronic records so that the Robinsons could sample Nationstar's data for purposes of a motion for class certification, and limited the discovery of such records to a sample of 400 loans from the period from January 10, 2014 to June 30, 2014 and "to areas which inform" the Court's decision on class certification, namely whether Nationstar was in compliance with Regulation X. Mot. 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. After they became delinquent on their loan, the Robinsons submitted another loan modification application to Nationstar on March 7, 2014. Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. Rules Prof'l Conduct 3.4 cmt. For example, since default fees are often paid by sources other than the borrower, such as in a short sale or refinancing, Nationstar challenges Oliver's assessment that fees identified through LSAMS can be deemed to constitute damages from RESPA violations, because the software does not reflect who paid the fee. Thus, the nature of the proof of whether there has been a pattern or practice of RESPA violations provides substantial support for a finding of predominance. A conflict of interest will not defeat the adequacy requirement when "all class members share common objectives[,] the same factual and legal positions, and . 1024.41(a). 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. That notice must be provided within 30 days of receiving the complete loss mitigation application. Fed. 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. When considering whether expert testimony is reliable or should be excluded, the court considers the following factors: "When an expert's report or testimony is 'critical to class certification,'" the district court "must make a conclusive ruling on any challenge to that expert's qualifications or submissions before it may rule on a motion for class certification." If the application is denied, a notice to that effect is sent to the borrower. 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. Presently pending is Nationstar's Motion for Summary Judgment, Nationstar's Motion to Strike, and the Robinsons' Motion for Class Certification. Id. If the named plaintiff satisfies all of the Rule 23(a) requirements and the Rule 23(b)(3) requirements, then class certification is appropriate. 2007)), aff'd sub nom. See 12 C.F.R. DEMETRIUS ROBINSON and TAMARA ROBINSON, Plaintiffs, v. NATIONSTAR MORTGAGE LLC, Defendant. Id. Nationstar claims that manual review of each file would take about 60 to 90 minutes per file. 2d 873, 883 (D. Md. 1024.41(b)(1), which requires reasonable diligence in obtaining documents and information to complete a loss mitigation application; and Md. Nationstar employees use four software applications and databases to store and track electronic information relating to loans: (1) Loan Services and Accounting Management System ("LSAMS"), Nationstar's primary loan servicing software, which contains data for loans, including the permanent records of the accounting history, communication logs, and letters documented with codes that were sent to the borrower; (2) Remedy Star, Nationstar's proprietary loss mitigation and loan modification management system, which, among other tasks, tracks the status and timeline of a loan modification and links to documents stored in FileNet; (3) LPS Desktop ("LPS"), an application which Nationstar uses to track and manage foreclosure processes and communicate with outside attorneys; and (4) FileNet, a platform that houses PDF images of documents, including letters sent to borrowers by Nationstar. TDC-14-3667, 2019 WL 4261696 (D. Md. 3d at 1014. Law 13 . Here, even though the Robinsons' March 7, 2014 loss mitigation application was not the Robinsons' first such application, it was their first submitted after the effective date of Regulation X. Thus, a loan servicer could not have complied with Regulation X for a loss mitigation application submitted before January 10, 2014 because there was no regulation in effect with which to comply. PO Box 3560. Sept. 29, 2021). 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. In Washington v. Am. 1024.41(f), (g), and (h) because there is no evidence in the record that Nationstar violated those provisions. 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. Code Ann., Com. The first of these prerequisites is that the class must exist and be "readily identifiable" or "ascertainable" by the court through "objective criteria." 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. Under the terms of the Settlement, if nothing else occurs in the litigation, then the Settlement will become effective 95 days from the date of that decision by the Court of Appeals. 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." Code Ann., Com. Proof of these claims requires a showing of the dates that an application was received, an acknowledgment letter was sent, an application became complete, Nationstar sent a decision letter to the borrower, and a foreclosure sale is scheduled. 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. While Mrs. Robinson stated that she was conducting bookkeeping for Green Earth Services during the relevant time frame, she testified that her work was less than six hours per week, and the Robinsons have not shown that her time spent communicating with Nationstar "resulted in actual pecuniary loss" to Mr. Robinson or the business. Ask to speak in court about the fairness of the Settlement. 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. 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. 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. 120. HARRISBURG Attorney General Josh Shapiro, as part of a multistate effort, today announced that his office obtained an $86.3 million settlement from Nationstar Mortgage, the country's fourth-largest mortgage servicer. 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. Gunnells, 348 F.3d at 427-28. 1024.41(a). Actual damages may also include "non-pecuniary damages, such as emotional distress and pain and suffering." 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. The lawsuit alleges, however, that Nationstar has not made interest payments to the plaintiffs, nor provided any record that interest was accruing and due to the homeowners, at any time during or after December 1, 2018 to March 22, 2019 or May 1, 2020 through the present. "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.". Va., Inc., 543 F.2d 1075, 1080 (4th Cir. As to the third denial on November 7, 2013, Nationstar informed the Robinsons that the loan modification application was denied because the mortgage loan was not in default. Check out:Covid-19 pandemic is the first time 40% of Americans have experienced food insecurity, Don't miss:Amex Blue Cash Preferred is offering an elevated welcome bonus for a limited time, Get Make It newsletters delivered to your inbox, Learn more about the world of CNBC Make It, 2023 CNBC LLC. Those claims arose from Nationstar's alleged 2605(f)(1). MCC JR 318, 530-531. 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. 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. Id. Subsequent to the Court's approval, one of the objectors to the settlement filed an appeal. 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. The Federal Rules of Evidence do not prohibit these kinds of arrangements. The Robinsons assert that they have paid a total of $6,147.12 in unspecified fees to Nationstar. This assertion mischaracterizes the burden of proof in a civil case. If you are a member of the Settlement Class, you must submit a completed Claim Form to receive a payment. 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. 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." 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. But see Sutton v. CitiMortgage, Inc., 228 F. Supp. Code Ann., Com. R. Civ. J. Throughout discovery, Nationstar repeatedly stated that it could not produce the data on loss mitigation or loan modification applications from its databases in the form requested by the Robinsons. 1024.41(d). See Johnson v. Ocwen Loan Servicing, 374 F. App'x 868, 873 (11th Cir. 1024.41 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. P. 23(a)(2); Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). 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. 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." Once the documents are received, the Remedy Star substatus and LSAMS code are changed again to mark the application complete. CFPB Director Kathleen Kraninger said in a statement. Nelson, 2017 WL 1167230, at *3 (collecting cases). Fed. 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. See 12 C.F.R. In 2017, the CFPB fined Nationstar $1.75 million for failing to report accurate data about its mortgage transactions. 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. 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. at 300. See, e.g. Likewise, although Mrs. Robinson expended time corresponding with Nationstar, she was not working for pay at the same time, and the Robinsons have not provided evidence to quantify the loss to Mr. Robinson, the only viable plaintiff here. 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. On July 16, 2018, the Court affirmed the Magistrate Judge's ruling and required Nationstar to produce all outstanding "records subject to discovery orders." 1024.41(f), (g), and (h); and (4) there is no evidence of actual damages from any RESPA violation. 877-683-9363. An 85-year Harvard study found the 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. R. Civ. . 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." loan" did not have standing to bring a RESPA claim); Nelson v. Nationstar Mortg. The Robinsons appealed the Magistrate Judge's ruling because it did not require Nationstar to run a structural script for a third database. Robinson v. Nationstar Mortgage, LLC Complaint with jury demand against Nationstar Mortgage, LLC. Regulation X's effective date reflected "an intent not to apply it to conduct occurring prior to that date." A class action may be maintained under Rule 23(b)(3) if common questions of law or fact "predominate over any questions affecting only individual members" and a "class action is superior to other available methods for fairly and efficiently adjudicating the controversy." 1024.41(h)(1), (4). 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.
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