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). 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." 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. 12 U.S.C. Compl. Reg. 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. Nationstar correctly notes that the Robinsons have not identified a false or misleading statement or representation by Nationstar in the record. See Farber, 2017 WL 4347826 at 15; Billings, 170 F. Supp. 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. Every mortgage has a unique loan number that can be used to identify the borrower and the loan in each of the four databases. In 2007, Mr. Robinson obtained a loan with the principal amount of $755,000 to refinance the property. Moreover, the conflict must not be "merely speculative or hypothetical." J. Md. A code is also added to LSAMS to put a hold on foreclosure proceedings. which has the capacity, tendency, or effect of deceiving or misleading consumers." All Rights Reserved. . QSF Settlement Administrator. See id. 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. 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." The Motions are fully briefed, and no hearing is necessary to resolve the issues. Id. at 358. 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." The settlement in the form of a consent judgment, filed in the U.S. District Court for the District of Columbia, resolves allegations that Nationstar, which does business as "Mr. Cooper," violated consumer protection laws. Nationstar also asserts that the Robinsons have not identified evidence sufficient to support their MCPA claims. 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 Frank, due to the state's community property laws, the mortgage was "a community debt," and after her husband died, the plaintiff "was therefore obligated to make the loan payments" because of her interest in the home. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). 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. Co., 350 F.3d 1018, 1023 (9th Cir. Once the documents are received, the Remedy Star substatus and LSAMS code are changed again to mark the application complete. 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." Summary judgment will therefore be entered for Nationstar on the claims that Nationstar violated subsections (f) and (g). See McGraw, 646 F.2d at 176. 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. Nelson, 2017 WL 1167230, at *3 (collecting cases). The Robinsons, however, have not identified any evidence that Nationstar did not intend to, and did not, conduct such evaluations. See Farmer v. Ramsay, 159 F. Supp. Nationstar's failings resulted in "substantial consumer harm," CFPB Director Kathleen Kraninger said in a statement. 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 . The loan is then evaluated for loan modification options. If more documents are required, then the same Remedy Star substatus and LSAMS code that denote missing documents are entered. The Federal Rules of Evidence do not prohibit these kinds of arrangements. 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. Summ. 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." Fed. Because all of the Rule 23(a) and (b)(3) requirements are met as to a class asserting violations of 12 C.F.R. 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. 1024.41(c)(1)(i). Baez, 709 F. App'x at 983. 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. The Court will not revisit this determination. 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. Although she has worked as a bookkeeper for various companies, she was not employed between March and September 2014. 2006). Code Ann., Com. Campbell v. Nationstar Mortg., 611 F. App'x 288, 297-98 (6th Cir. The fact that each borrower must individually show damages under 12 U.S.C. 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. JA 130. 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. United States v. Valona, 834 F.2d 1334, 1344 (7th Cir. 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. 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 March 2014, Mrs. Robinson was primarily responsible for communicating with Nationstar and PaCE. See Krakauer v. Dish Network, L.L.C., 925 F.3d 643, 658 (4th Cir. That notice must be provided within 30 days of receiving the complete loss mitigation application. 1024.41(d). Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act ("Regulation X"), 78 Fed. Id. 1024.41(h)(1). 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. 2013); Poindexter v. Teubert, 462 F.2d 1096, 1097 (4th Cir. Marais v. Chase Home Fin., LLC, 24 F. Supp. 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." LLC, No. 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. 12 C.F.R. 1990) (citing Universal Athletic favorably for this proposition). (quoting East Tex. 2605(f)(1)(A)). Plaintiffs Demetrius and Tamara Robinson (the "Robinsons") have resided in a home in Damascus, Maryland that has been subject to a mortgage loan. 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"). On August 20, 2014, when Mrs. Robinson called to check on the status of the application, a Nationstar representative told her that the paperwork had gone to the wrong loss mitigation division and that the Robinsons needed to submit their application again. Law 13-316(c) are triggered upon the submission of a loss mitigation application, while 12 C.F.R. 2015). "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.". 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. "There are going to be a lot of homeowners who need a home loan modification or other assistance," Raoul says. 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. Nationstar's reliance on Accrued Financial Services v. Prime Retail, Inc., 298 F.3d 291 (4th Cir. Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 344 (4th Cir. 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. Signed by Judge Theodore D. Chuang on 8/18/2015. The regulation is silent on whether a loss mitigation application submitted before January 10, 2014 could qualify as the "single complete loss mitigation application." On May 5, 2014, Nationstar asked the Robinsons for additional information to evaluate the appeal, including documents to verify their income. R. Civ. 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. 1972). Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403 (1977))). P. 23(a)(1). Gunnells, 348 F.3d at 424 (quoting Amchem, 521 U.S. at 615). 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. McLean v. GMAC Mortg. Customers may call with questions about the settlement or the remediation checks at 1-855-914-4649 Monday-Friday, 9:00 a.m. to 9:00 p.m. except holidays. HealthSystem, 669 F.3d 802, 812 (7th Cir. Cal. In Robinson v. Nationstar Mortgage LLC, No. The Robinsons allege that Nationstar has assessed $256 per month in late fees, interest, and other fees due to the delinquency, and that they have spent considerable time and effort pursuing the loss mitigation process, time which they otherwise would have devoted to their struggling small business. Since it is the plaintiff's burden to establish that the requirements of Rule 23 have been met and Mr. Robinson has failed to do so, the Motion for Class Certification will be denied as to any claims that Nationstar violated 12 C.F.R. Fed. In its Motion to Strike, Nationstar argues that Oliver's methodology has not been peer reviewed, has a high error rate because he used the wrong data fields to identify the dates of events, failed to consider the timing of foreclosure sales relative to the dates of the submission of loan modification applications, and did not propose a specific methodology for calculating damages. MCC JR 318, 530-531. 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. Law 13-316(e)(1), and "actual damages," 12 U.S.C. Life Ins. For the foregoing reasons, Nationstar's Motion for Summary Judgment will be GRANTED IN PART and DENIED IN PART. 3d 254, 274-75 (S.D.N.Y. Here, the Robinsons have not put forward any evidence that Mrs. Robinson has an ownership interest in the home that would specifically obligate her to make payments on the loan. Code Ann., Com. See, e.g., Linderman v. U.S. Bank Nat'l Ass'n, 887 F.3d 319, 321 (7th Cir. While Demetrius Robinson did appeal Nationstar's March 15, 2014 offer of an in-house modification, the requirements of subsection (h) were not triggered because the offer was not a denial of a loan modification application. Certification will not be granted as to the claims under 12 C.F.R. In approving such a modification, Nationstar made a mistake: the underwriter working on the Robinsons' loan had erroneously double-counted their income. See Keen, 2018 WL 4111938, at *5-6. R. Civ. If the initial application is complete, the substatus in Remedy Star is changed to refer the application to an underwriter for review, and an additional code is added in LSAMS. Likewise, the articulated concern that Nationstar would not be required to respond to loss mitigation applications filed within a certain number of days of a foreclosure sale, can be addressed through the provision of data relating to the dates of scheduled foreclosure sales. Therefore, Nationstar was required to comply with section 1024.41 in processing it. On July 16, 2018, the Court affirmed the Magistrate Judge's ruling and required Nationstar to produce all outstanding "records subject to discovery orders." 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." Likewise, he concluded that for approximately 53 percent of sampled loans, Nationstar failed to comply with the requirement of acknowledging receipt of the application within five days. 1024.41(c)(1)(ii), which requires a servicer to respond to a completed loan modification application; or Md. They have a home in Damascus, Maryland purchased by Demetrius Robinson ("Mr. Robinson"). It will be otherwise denied. Sept. 2, 2015). 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. 2018). 2013)). 1024.41(i). 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." May 31, 2016), the plaintiff had signed the deed of trust but not the promissory note but was nevertheless deemed to have standing because she had owned the home with a right of survivorship with her deceased husband, who had signed the note. 702. 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. See Torres v. Mercer Canyons Inc., 835 F.3d 1125, 1137 (9th Cir. 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. 10696, 10836. In 2020, the Robinsons and Nationstar filed a notice of settlement and a joint motion to proceed before a magistrate "A loss mitigation application is a request from a borrower to change the terms of their payment obligations to avoid delinquency or foreclosure." J.A. Marchese v. JPMorgan Chase Bank, N.A., 917 F. Supp. McLean I, 595 F. Supp. 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. Nationstar asserts that Oliver's testimony should be stricken because this fee arrangement includes an unethical contingency fee. When each event occurseither the mailing of a letter or the changing of a code or substatusthe date is recorded in the databases. Law 13-301 and 303. 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. 1024.41(f), (g), and (h); and (4) there is no evidence of actual damages from any RESPA violation. 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. The Court may rely only on facts supported in the record, not simply assertions in the pleadings. Co v. Adair, 764 F.3d 347, 359-60 (4th Cir. Case No. 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.
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