Fed. Gunnells, 348 F.3d at 427-28. 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." As the Supreme Court noted in Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999), Daubert "made clear that its list of factors was meant to be helpful, not definitive," and it is not always the case that an expert witness's claim will have been subjected to peer review. In support of this argument, Nationstar contends that the ethical rules for attorneys prohibit contingency fee arrangements with expert witnesses. at 359-60. 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. Some of the alleged damages are not supported in law or in fact. Universal Athletic Sales Co. v. Am. 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. Therefore, Nationstar was required to comply with section 1024.41 in processing it. The Robinsons do not address this argument in their Opposition. 1967). In assessing this element, "numbers alone are not controlling" and a district court should consider "all of the circumstances of the case." 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. . Code Ann., Com. 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. 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. Nationstar Call Settlement Administrator. Law 13-316(c), the Court will grant class certification as to those class members and claims. 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. 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. which has the capacity, tendency, or effect of deceiving or misleading consumers." In their memorandum in opposition to the Motion for Summary Judgment ("Opposition"), the Robinsons admit that they "do not have evidence that Nationstar dual tracked them" or began foreclosure proceedings while a loan modification application was pending. 12 C.F.R. For example, in EQT, the court concluded that a proposed class of all individuals who owned an interest in a gas estate was not ascertainable because the actual owners could be determined only through an individualized review of land records. Nationstar argues that summary judgment should be granted against Mrs. Robinson because she is not a "borrower" within the meaning of RESPA. 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. R. Civ. (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"). ("Opp'n') 13, ECF No. Md. 2605(f)(2). After an additional period of expert discovery relating to the class certification motion, discovery closed on December 30, 2018. Id. 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. 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. 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." . That provision provides, in parallel, that a loan servicer which does not comply with Regulation X is liable "to the borrower." Contact the Class Action Administrator at 1-855-917-3477 (Toll-Free). At the time, Nationstar had not completed the process of updating its systems to conform to those requirements. 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. 28, 2017). 12 U.S.C. See Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349, 356-57 (3d Cir. These letters are based on standard Nationstar templates, and the code reflects the type of letter sent. See supra parts I.B.1, I.B.3, I.C.1. This is not the first time Nationstar has been the subject of federal and state investigations. Law 13-316(c), which requires a response to a mortgage servicing complaint or inquiry within 15 days. 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. In addition, Nationstar asserts that not all loan modification applications referred to an underwriter are complete. MCC JR 530. 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. 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. 12 C.F.R. The CFPB estimates about 40,000 borrowers were harmed by Nationstar's allegedly unfair and deceptive practices, according to a statement released Monday. 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." Because such information is stored electronically and based on objective criteria, the members of the class will be ascertainable without significant administrative burden. 1024.41(i). 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 regulation is silent on whether a loss mitigation application submitted before January 10, 2014 could qualify as the "single complete loss mitigation application." 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. Accordingly, a loan servicer must comply with Regulation X as to the first loss mitigation application submitted after the effective date. Gunnells v. Healthplan Serv., Inc., 348 F.3d 417, 458 (4th Cir. Nationstar broke that trust by engaging in unfair and deceptive practices," Kraninger added. 16-0307, 2017 WL 1167230, at *3 (E.D.N.C. 14-cv-10457, in the U.S. District Court for the Northern District of Illinois, Eastern Division.. Join a Free TCPA Class Action Lawsuit Investigation. Filing fee paid $ 402, Receipt number AOHNDC-10680087. 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. The ruling serves as a reminder that Florida remains one of the top states for both mortgage fraud and lender errors. Finally, the Court finds that common issues of law and fact predominate. 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."). that it is improper to pay an expert witness a contingent fee." During this period, in August 2013, the Robinsons retained a forensic loan auditor, Professional Compliance Examiners ("PaCE"), and paid it $2,275 to help them communicate with Nationstar. Local R. 105.6. 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. The Robinsons have not made any mortgage payments since January 2014 and have not been assessed any late fees since February 2014. 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. 218. See Farber, 2017 WL 4347826 at 15; Billings, 170 F. Supp. Petitioner: NATIONSTAR MORTGAGE, LLC: Respondent: TAMARA ROBINSON and DEMETRIUS ROBINSON: Case Number: 19-379: Filed: September 24, 2019: Court: U.S. Court of Appeals . On July 17, 2014, Nationstar informed Mr. Robinson by letter that he did not qualify for a HAMP modification and that since the March 14 loan modification offer had not been accepted, it was withdrawn. Nationstar further argues that summary judgment must be entered in its favor on the Robinsons' claims under 12 C.F.R. Id. If the application is denied, a notice to that effect is sent to the borrower. Baez, 709 F. App'x at 983. P. 23(b)(3). 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. 1024.41(f), (g), and (h), and Md. at 152. 2605(f)(2); Wirtz, 886 F.3d at 719-20, that the individualized damages inquiry would need to precede the award of statutory damages based on a finding of a pattern-or-practice of RESPA violations is a distinction without a difference: whether individual damages are shown before or after the pattern-or-practice liability, the common issues of liability predominate over the individualized questions of damages. This assertion mischaracterizes the burden of proof in a civil case. 10696, 10708 (Feb. 14, 2013) (codified at 12 C.F.R. See Torres v. Mercer Canyons Inc., 835 F.3d 1125, 1137 (9th Cir. Sep. 9, 2019). Sept. 2, 2015). 1024.41(b)(2)(B), (c)(1)(ii); Md. The Robinsons assert, and Nationstar does not argue otherwise, that litigation regarding Regulation X is not proceeding against Nationstar in another forum. "We want to hear from you," Raoul says. Md. Individual damages would be below the cost of litigation even if each class member could establish that Nationstar's conduct consisted of a pattern or practice of violating Regulation X, because the statute limits such damages to $2,000 per borrower. 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. 17-0982, 2018 WL 4111938, at *5-6 (M.D. Although she has worked as a bookkeeper for various companies, she was not employed between March and September 2014. The Court agrees that costs, including administrative costs, "incurred whether or not the servicer complied with its obligations" are not actual damages "caused by, or 'a result of,'" the RESPA violation, whether or not they occurred before or after the violation. Nationstar's Motion will be denied as to this claim. 1024.41(c)(1)(i) and (d), because the Robinsons made no showing that the Rule 23 requirements were met. 1024.41(b)(2)(i)(B), which requires that an acknowledgment letter be sent within five days of receipt of a loss mitigation application; 12 C.F.R. Where the cost of litigation as compared to the potential recovery gives class members little incentive to bring suit, and there is little reason to individually control the litigation, a class action is a superior method to vindicate the rights of class members. To establish an MCPA violation under this provision, a plaintiff must establish that (1) the defendant engaged in an unfair or deceptive practice or misrepresentation; (2) the plaintiff relied upon the representation; and (3) doing so caused the plaintiff actual injury. Furthermore, to the extent that the Robinsons' claim is that Nationstar falsely stated that it would evaluate the Robinsons for all available loss mitigation plans, the Robinsons point only to statements in letters that the Robinsons "may" be eligible for certain non-HAMP loan modification programs. Sept. 29, 2017); Billings v. Seterus, Inc., 170 F. Supp. JA 130. 2010). 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. 2003). 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"). Nationstar denies all allegations of wrongdoing and no judgment or determination of wrongdoing has been made. Part 1024). To view the settlement agreement and consent order, please visit the CSBS's website. A fact is "material" if it "might affect the outcome of the suit under the governing law." 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. WASHINGTON, D.C. The Consumer Financial Protection Bureau (CFPB) today ordered Nationstar Mortgage LLC to pay a $1.75 million civil penalty for violating the Home Mortgage Disclosure Act (HMDA) by consistently failing to report accurate data about mortgage transactions for 2012 through 2014. Mr. Robinson then submitted another loan modification application on August 25, 2014. 1024.41(f), (g), and (h); and (4) there is no evidence of actual damages from any RESPA violation. 2010). Fed. 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. "[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.'" Since the Court has already concluded that Nationstar is entitled to summary judgment on the Robinsons' claims under 12 C.F.R. 2003). As a result, on January 29, 2018, the Magistrate Judge granted the Robinsons' Motion to Compel in which the Robinsons had sought to have the Court order Nationstar to accept and run scripts created by the Robinsons' expert to extract the relevant data from Nationstar's databases on the sample of loans from which they could test their methodology for identifying members of the proposed classes. 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. 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. 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. In Robinson v. Nationstar Mortgage LLC, No. News Ask a Lawyer v. W.R. Grace & Co., 6 F.3d 177, 188 (4th Cir. Certification will also be denied as to the claim under 12 C.F.R. 1024.41(b)(2)(B). The Class Action Administrator would then begin distribution of the settlement funds. The entry under "objected" acts as a unique identifier for an electronic file, but it does not contain information about the file's substance and could in fact contain multiple submissions or documents relating to one borrower. See 12 C.F.R. 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. Northern District of Ohio, ohnd-1:2021-cv-00452 of 0 An error occurred while loading the PDF. 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. 2016) ("[F]ortuitous non-injury to a subset of class members does not necessarily defeat certification of the entire class, particularly as the district court is well situated to winnow out those non-injured members at the damages phase of the litigation, or to refine the class definition. Life Ins. 14-3667, 2015 WL 4994491, at *1-2 (D. Md. Write to the Court if you do not like the Settlement. Rather, the Court finds, based on the reasoning of Tagatz and Universal Athletic Sales, that the potential violation of an ethical rule does not itself make Oliver's testimony inadmissible. 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. Corp. ("McLean I"), 595 F. Supp. 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." 3d 249, 266 (D. Md. Regulation X went into effect on January 10, 2014. 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.