The cases cited by the Robinsons do not alter the Court's conclusion. A servicer that fails to comply with Regulation X is liable for actual damages and, upon a finding of a "pattern or practice" of non-compliance by the servicer, up to $2,000 in statutory damages. Tenn. Aug. 28, 2018) (holding that a spouse who signed a deed of trust stating that a person who did not sign the promissory note was not obligated on the security instrument, but did not sign the promissory note, was not a borrower under RESPA). Nationstar to Pay $110 Million to Settle Borrower Claims On November 21, 2014, the Robinsons filed suit against Nationstar on behalf of themselves and a class of similarly situated individuals nationwide. 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. Furthermore, Nationstar's argument that the Robinsons are not typical largely recycles the same arguments made in the Motion for Summary Judgment. Co., 595 F.3d 164, 179-80 (4th Cir. Questions? ORDER Scheduling Settlement Conference for Wednesday, October 26, 2016 at 10:30 a.m. Am. Presently pending is Nationstar's Motion for Summary Judgment, Nationstar's Motion to Strike, and the Robinsons' Motion for Class Certification. Law 13-301 and 13-303, because the Robinsons do not have standing to bring those claims. MCC JR 530. 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. 1024.41(b)(2)(B). The Borrower Payment Amount shall be used: (1) for payments to borrowers who submit claims and are in either or both of the Service Transfer and Property Preservation Populations set forth below; and (2) for reasonable costs and expenses of the Settlement Administrator, including taxes and fees for tax counsel. The ruling serves as a reminder that Florida remains one of the top states for both mortgage fraud and lender errors. 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. In Baez v. Specialized Loan Servicing, LLC, 709 F. App'x 979 (11th Cir. 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 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. Tagatz, 861 F.2d at 1042; cf. which has the capacity, tendency, or effect of deceiving or misleading consumers." "Mortgage servicers are entrusted with handling significant financial transactions for millions of Americans, including struggling homeowners. 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. 1024.41(f), (g), and (h), and Md. See supra parts I.B.1, I.B.3, I.C.1. 2605(f). "We will be watching the mortgage interest industry to ensure they are treating homeowners fairly and fulfilling their obligations.". 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." Id. Nationstar Call Settlement Administrator. After March 2014, Mrs. Robinson was primarily responsible for communicating with Nationstar and PaCE. 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 . 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. The first of these prerequisites is that the class must exist and be "readily identifiable" or "ascertainable" by the court through "objective criteria." Courts have held that a person who did not sign the promissory note is not a "borrower" for the purposes of RESPA because that individual has not "assumed the loan." A fact is "material" if it "might affect the outcome of the suit under the governing law." Id. A separate Order shall issue. Mrs. Robinson was the primary point of contact for the Robinsons in interacting with Nationstar. 2d 754, 768-69 (D. Md. 2605(f)(2) is not fatal to the predominance inquiry. Moreover, Nationstar cites no authority for the proposition that a loss mitigation application would not be deemed "complete" for purposes of RESPA upon such a formal designation, and any rule that would deem such an application incomplete in the event that an underwriter subsequently decided to ask for additional material would be entirely unworkable. 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. 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. Mortgage servicers seek government aid as forebearance requests soar, How this 39-year-old earns $26,000 a year in California. at 248-49. "); cf. The Motions are fully briefed, and no hearing is necessary to resolve the issues. Am. See Tagatz, 861 F.2d at 1042. 1 . 2014). 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. 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. After they became delinquent on their loan, the Robinsons submitted another loan modification application to Nationstar on March 7, 2014. 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. EQT Prod. All but $28.6 million of its. During this time and up until September 25, 2017, Nationstar had not begun any foreclosure proceedings on the Robinsons' home. Although based on imperfect data, Oliver's expert report reveals that such analysis can substantially address whether Nationstar violated 12 C.F.R. Nationstar also seeks summary judgment on the Robinsons' claims under the MCPA, which include claims of misleading statements in connection with the collection of consumer debts, in violation of section 13-301(1), (3) and section 13-303(4)-(5) of the MCPA, and claims that Nationstar did not respond to consumer inquiries within 15 days, in violation of section 13-316(c) of the MCPA. In the case of Tony Robinson and Debra Robinson vs Nationstar Mortgage, LLC, the appeals court ruled that the lender did not actually have the right to foreclose on the property. Id. 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. See id. While the Nationstar employee who conducts the initial processing of an application may refer it to an underwriter based on its facial completeness, the underwriter makes the final determination of whether the application is complete and is responsible for obtaining any additional required documentation. at 300. 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. . In their Motion for Class Certification, the Robinsons seek certification of two classes. Finally, Nationstar argues that summary judgment should be entered on the RESPA claims because the Robinsons cannot establish that they have suffered actual damages as a result of Nationstar's violations of Regulation X. 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. Id. Baez, 709 F. App'x at 983. Therefore, Nationstar was required to comply with section 1024.41 in processing it. These fees allegedly violated the Fair Debt Collection Practices Act and the Washington state Collection Agency Act. Instead, the Robinsons assert that Nationstar has not affirmatively proven that it conducted such reviews. Several states also fined Nationstar in 2018 over failing to have proper procedures in place and "unfair and deceptive" mortgage modification policies. 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. Accordingly, a loan servicer must comply with Regulation X as to the first loss mitigation application submitted after the effective date. The comments to that rule state that the "common law rule in most jurisdictions is . Write to the Court if you do not like the Settlement. . 13-316(e)(1). 89, 90, ECF No. Nationstar admits that in March 2014, two months after the implementation date of Regulation X, it had not yet updated its systems to comply with the regulation. 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. On July 16, 2018, the Court affirmed the Magistrate Judge's ruling and required Nationstar to produce all outstanding "records subject to discovery orders." Although Monday's case specifically addresses Nationstar's actions following the Great Recession, the outcome can affect today's homeowners, says Kwame Raoul, attorney general of Illinois. Ward, 595 F.3d at 180 (quoting Gunnells, 348 F.3d at 430). 702, 703. 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. Since the MCPA and Regulation X allow recovery only of "economic damages," Md. Sept. 2, 2015). at 152. 14-3667, 2015 WL 4994491, at *1-2 (D. Md. Nationstar further argues that the Robinsons cannot show that they suffered economic damages as a result of the violation of section 13-316. The Court does not find such a prohibition in the Maryland Attorneys' Rules of Professional Conduct. According to Nationstar's Underwriting Workflow Procedures, which sets forth the steps followed to review loans for modifications, when a borrower submits a loan modification application, a code is entered into LSAMS and updates the loan's substatus in Remedy Star. Nationstar also argues that Oliver's report should be stricken as unreliable under the Federal Rules of Evidence and Daubert. Law 13-301 and 13-303, and that Mr. Robinson therefore may not assert such claims on behalf of the class, Mr. Robinson's remaining claims and defenses are typical of the class members. The economic challenges and burdens that homeowners currently face are similar to the ones experienced following the Great Recession. 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. Parties, docket activity and news coverage of federal case Robinson et al v. Nationstar Mortgage LLC, case number 8:14-cv-03667, from Maryland Court. Notably, although a borrower may recover up to $2,000 in statutory damages upon a showing of a "pattern or practice of non-compliance with the requirements" of Regulation X, 12 U.S.C. 1024.41(d). 2003). 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." Opp'n Mot. 1024.41(h)(1). 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. Summ. Id. "There are going to be a lot of homeowners who need a home loan modification or other assistance," Raoul says. Fed. 1024.41(c)(1)(i) and (d), because the Robinsons made no showing that the Rule 23 requirements were met. 1024.41(i). 2605(f). Accordingly, Nationstar's Motion for Summary Judgment will be granted as to the MCPA claims under sections 13-301 and 13-303. The Court will not revisit this determination. 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. Before the error was discovered, Mr. Robinson appealed this offer as insufficient on April 10, 2014. Marchese v. JPMorgan Chase Bank, N.A., 917 F. Supp. Although this data was not provided to Oliver, there is no reason it could not be produced and used to make determinations on the timeliness of decisions on loss mitigation applications. 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). On May 5, 2014, Nationstar asked the Robinsons for additional information to evaluate the appeal, including documents to verify their income. J. The data derived from scripts written by another expert, Abraham J. Wyner, without the benefit of seeing the databases, a process necessitated by Nationstar's unwillingness or inability to produce the relevant data. 1024.41(a). 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. Gunnells, 348 F.3d at 427-28. See Stillmock v. Weis Markets, Inc., 385 F. App'x 267, 275 (4th Cir. Under Count I, the Robinsons allege a violation of 12 C.F.R. Instead, he analyzed certain data fields that were returned by the scripts written by a different expert. Nationstar Mortgage Convenience Fee Class Action Settlement Code Ann., Com. Nationstar argues that summary judgment should be granted against Mrs. Robinson because she is not a "borrower" within the meaning of RESPA. 2012) (citing Lloyd v. Gen. Motors Corp., 916 A.2d 257, 277 (Md. See Fed. ("Opp'n') 13, ECF No. 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. Nationstar's Motion for Summary Judgment will be granted as to Tamara Robinson. But see Sutton v. CitiMortgage, Inc., 228 F. Supp. See 12 C.F.R. He asserted that the amount of fees was calculated based on Nationstar's statements, but he could not specify the nature of the fees. 2007)), aff'd sub nom. However, the burden is on the plaintiffs to show that other class members exist and that their joinder is impracticable; a court may not rely on mere speculation that numerosity has been satisfied. 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. 1024.41(b)(1), which requires reasonable diligence in obtaining documents and information to complete a loss mitigation application; and Md. 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. 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. A plaintiff has the burden to show that all of the necessary prerequisites for a class action have been met. . Although she has worked as a bookkeeper for various companies, she was not employed between March and September 2014. Home Loans, No. 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. Summary judgment will therefore be entered for Nationstar on the claims that Nationstar violated subsections (f) and (g). 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. 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. See Farber, 2017 WL 4347826 at 15; Billings, 170 F. Supp. 26-1. The denial letters stated that the loan's principal balance exceeded the limit under HAMP. 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. v. Nationstar Mortgage LLC. 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."). Nationstar's Motion to Strike will be DENIED. Fed. The Motion will be otherwise denied. 2003). 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. Home [robinsonsettlement.com] 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." . An 85-year Harvard study found the No. Certification will also be denied as to the claim under 12 C.F.R. That notice must be provided within 30 days of receiving the complete loss mitigation application. Discovery Order, ECF No. 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. When combined with the state settlements, Nationstar is on the hook to pay a total of $91 million overall: $85 million to harmed consumers and $6 million in civil penalties. "); see also 1 William Rubenstein et al., Newberg on Class Actions 2:3 (5th ed. CFPB Director Kathleen Kraninger said in a statement. 3d at 1014. At a minimum, the question of when a loss mitigation application is "complete" under RESPA within the workflow of Nationstarwhether at the time of the processor's designation of the file as complete or at a later stageis a significant unresolved question of law and fact that would be common to all RESPA claims against Nationstar. 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. 1024.41. 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. 2002), is misplaced. These letters are based on standard Nationstar templates, and the code reflects the type of letter sent. While it is not necessary to identify every class member at the time of certification for a class to be "ascertainable," a class cannot be certified if its membership must be determined through "individualized fact-finding or mini-trials." Nationstar argues that it should be granted summary judgment on all of the RESPA claims because Nationstar was required to comply with Regulation X only as to a borrower's first loss mitigation application, and the Robinsons' March 7, 2014 application was not their first loan modification application.