12 U.S.C. P. 23(a)(3); Deiter v. Microsoft Corp., 436 F.3d 461, 466-67 (4th Cir. Signed by Judge Theodore D. Chuang on 8/18/2015. These letters are based on standard Nationstar templates, and the code reflects the type of letter sent. Northern District of Ohio, ohnd-1:2021-cv-00452 of 0 An error occurred while loading the PDF. . "Mortgage servicers are entrusted with handling significant financial transactions for millions of Americans, including struggling homeowners. Class Action Claims Nationstar Mortgage Unlawfully Failed to Pay 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. The Final Approval Order, approving the Class-wide Settlement, was entered December 11, 2020. Nationstar argues that summary judgment should be entered on the Robinsons' MCPA claim under section 13-316 because the Robinsons have not shown that they submitted a complaint or inquiry that triggers a duty to respond. The comments to that rule state that the "common law rule in most jurisdictions is . Finally, to the extent that Oliver did not execute his stated methodology for identifying damages, that limitation is again based in part on Nationstar's failure to make relevant data available to him. Section 13-316(c) governs "mortgage servicing" and, among other requirements, provides that a "servicer shall designate a contact to whom mortgagors may direct complaints and inquiries" and that the "contact shall respond in writing to each written complaint or inquiry within 15 days if requested." . Ward, 595 F.3d at 180 (quoting Gunnells, 348 F.3d at 430). Am. Nationstar ultimately became the servicer of the Robinsons' loan. 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. Every mortgage has a unique loan number that can be used to identify the borrower and the loan in each of the four databases. 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. Questions? "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. 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. Indeed, Mr. Robinson testified that Mrs. Robinson did not sign the Note because she did not purchase the property with him. Because all of the Rule 23(a) and (b)(3) requirements are met as to a class asserting violations of 12 C.F.R. Instead, the Robinsons assert that Nationstar has not affirmatively proven that it conducted such reviews. The Class Action Administrator would then begin distribution of the settlement funds. Fla. 2009), aff'd, 398 F. App'x 467, 471 (11th Cir. This abandoned high school was converted into a 31-unit apartment building, number of unlawful practices in handling mortgages following the Great Recession. 28, 2017). But see Sutton v. CitiMortgage, Inc., 228 F. Supp. 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. 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. TDC-14-3667, 2019 WL 4261696 (D. Md. Nationstar correctly notes that the Robinsons have not identified a false or misleading statement or representation by Nationstar in the record. 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. Eligible consumers will be contacted by Nationstar or the settlement administrator about refunds under the settlement. First, to the extent that there was a period of time during which Nationstar failed to implement procedures to comply with RESPA, the facts establishing such a gap would be highly relevant to a pattern or practice determination and would be common in every case. Id. 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. Nationstar further argues that summary judgment must be entered in its favor on the Robinsons' claims under 12 C.F.R. Nationstar Mortgage Agrees to $91M Settlement with the CFPB PDF NATIONSTAR MORTGAGE LLC, D/B/A MR. COOPER, Defendant. 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. 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. 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. The company has already paid about $57.5 million in restitution to affected consumers, according to the CFPB. Finally, the named plaintiff must "fairly and adequately protect the interests of class" without a conflict of interest with the absent class members. 2605(f). At least one court has found a similar expert report by Oliver to meet the Daubert standard. 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. Since the Rule 23(a) factors are satisfied, the Court will now consider whether the Rule 23(b)(3) predominance and superiority considerations are met. Messner v. Northshore Univ. MCC JR 0003. Robinson v Nationstar - Home 2006). . For example, it was undisputed that on May 30, 2014, Mr. Robinson, in response to Nationstar's requests for additional information, resubmitted the same information sent with his March 2014 loan modification application. Id. 12 C.F.R. An expert's testimony is "critical" where it is "important to an issue decisive for the motion for class certification." While class members would not be eligible for statutory damages unless actual damages are shown, see 12 U.S.C. Wright et al. Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403 (1977))). 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. 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. Id. R. Civ. Whether an application is complete depends on the requirements of the investor who holds the loan. at 983 (quoting 12 U.S.C. 2006). See Md. 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. J. During discovery, Oliver revealed that his fee arrangement with the Robinsons includes a flat fee for his expert services, but that a portion of the fee is contingent on the certification of a class in this case. Nationstar argues that summary judgment should be granted against Mrs. Robinson because she is not a "borrower" within the meaning of RESPA. Where the Robinsons, after discovery, cannot point to evidence that Nationstar did not even consider or evaluate the Robinsons for loss mitigation options, they have not established the existence of a genuine issue of material fact on the issue of false or misleading statements. Id. Law 13-301 and 303. Mr. Robinson then submitted another loan modification application on August 25, 2014. Fed. Fed. 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. 2605(f)(1)(B), a borrower cannot recover these additional damages "without first recovering actual damages." In February 2014, after their income had further decreased, the Robinsons ceased making payments on the mortgage loan. In Baez v. Specialized Loan Servicing, LLC, 709 F. App'x 979 (11th Cir. The Robinsons also claim as damages interest overcharges of approximately $141,000. 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." 2605(f). at 152. 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. P. 23(a)(2); Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). The MCPA prohibits the use of an "unfair or deceptive trade practice" in the "[t]he extension of consumer credit" or "[t]he collection of consumer debts" and provides for a private right of action. Because such information is stored electronically and based on objective criteria, the members of the class will be ascertainable without significant administrative burden. These events will be represented by discrete data points in Nationstar's databases, such that these violations may be proved through that data. Nationstar filed a notice of settlement and a joint motion to proceed before a magistrate . Code Ann., Com. uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results." Accordingly, a loan servicer must comply with Regulation X as to the first loss mitigation application submitted after the effective date. 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." 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. Id. 2d 1360, 1366 (S.D. P. 23(b)(3). Likewise, Oliver's expert report provides no analysis on how Nationstar's databases allow for a systematic determination whether Nationstar failed to inform borrowers of the specific reasons for the servicer's decision to deny each loan modification option, in violation of 12 C.F.R. at 248-49. 2001) (striking expert testimony because of a contingent fee arrangement), aff'd, 43 F. App'x 547 (4th Cir. PO Box 3560. 20-cv, -2202, 2021 WL 4462909, at *1 (S.D. 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 regulation is silent on whether a loss mitigation application submitted before January 10, 2014 could qualify as the "single complete loss mitigation application." Ass'n, No. Furthermore, Oliver states that since Nationstar employees used templates to communicate with borrowers, he could determine whether there were violations of certain RESPA provisions based on entries showing that Nationstar employees used templates that did not comply with RESPA. Code Ann., Com. He asserted that the amount of fees was calculated based on Nationstar's statements, but he could not specify the nature of the fees. 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"). (quoting 7AA Charles Allan Wright et al., Federal Practice and Procedure 1778 (3d ed. that it is improper to pay an expert witness a contingent fee." Law 13-316(e), for the reasons stated above, see supra part I.B.4, the Robinsons have provided sufficient evidence to create a genuine issue of material fact whether they have suffered economic damages, in the form of administrative costs, fees, and interest. Nationstar seeks summary judgment on the Robinsons' RESPA claims on the grounds that (1) Mrs. Robinson is not a proper plaintiff because she is not a "borrower" within the meaning of RESPA; (2) RESPA is inapplicable because Nationstar was required to comply with Regulation X only as to the Robinsons' first loss mitigation application; (3) there is no evidence to support a violation of 12 C.F.R. (2012), and the Maryland Consumer Protection Act ("MCPA"), Md. However, Nationstar did not comply with all requirements of Regulation X, which became effective on January 10, 2014. 2012) (citing Lloyd v. Gen. Motors Corp., 916 A.2d 257, 277 (Md. Nationstar Mortgage Convenience Fee Class Action Settlement "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." USCA4 Appeal: 21-1087 Doc: 38 Filed: 06/15/2021 Pg: 9 of 33 1024.41(c)(1)(i). Tagatz, 861 F.2d at 1042; cf. 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." These fees allegedly violated the Fair Debt Collection Practices Act and the Washington state Collection Agency Act. 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. 702, 703. Although she has worked as a bookkeeper for various companies, she was not employed between March and September 2014. See supra parts I.B.1, I.B.3, I.C.1. Nationstar's criticism that Oliver failed to use the correct data field to identify the date when a loss mitigation application was complete, and failed to consider the timing of application relative to the date of scheduled foreclosure sale, ring hollow because Nationstar provided to Oliver only limited data fields, which did not contain clear field names or definitions. 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. The public policy interest at issue was one against "stirring up litigation or promoting litigating for the benefit of the promoter rather than for the benefit of the litigant or the public," an interest not implicated in the same manner by the fee arrangement with the particular expert witness in this case. 12 C.F.R. loan" did not have standing to bring a RESPA claim); Nelson v. Nationstar Mortg. 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. Co., 595 F.3d 164, 179-80 (4th Cir. 1024.41(c)(1)(i) and (d), because the Robinsons made no showing that the Rule 23 requirements were met. 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. 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. HealthSystem, 669 F.3d 802, 812 (7th Cir. If the application is complete "more than 37 days before a foreclosure sale," the servicer may not move for a foreclosure judgment or conduct a foreclosure sale, but instead must first "[e]valuate the borrower for all loss mitigation options available to the borrower," send to the borrower "a notice in writing stating the servicer's determination of which loss mitigation options, if any, it will offer," and include a statement of applicable appeal rights. See Krakauer v. Dish Network, L.L.C., 925 F.3d 643, 658 (4th Cir. Moreover, the conflict must not be "merely speculative or hypothetical." Furthermore, Nationstar's argument that the Robinsons are not typical largely recycles the same arguments made in the Motion for Summary Judgment. Particularly where a class may be certified even if individualized damages calculations would be necessary, the incomplete nature of the damages analysis does not provide a basis for striking Oliver's expert testimony. 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. 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.