And given that the class includes all borrowers who have submitted an application since January 10, 2014, joinder of all members is eminently impractical. 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. 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. 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. A code is entered in Remedy Star when the letter is sent. Before relating the facts relevant to the Motion for Class Certification, the Court will highlight the relevant procedural history affecting the record before the Court. Class certification will be granted, with Demetrius Robinson as the named plaintiff, as to both the Nationwide Class and the Maryland Class for the claims under 12 C.F.R. ORDER Scheduling Settlement Conference for Wednesday, October 26, 2016 at 10:30 a.m. Nationstar also does not argue that the class is not numerous, as there approximately 33,855 members who submitted loss mitigation applications from January 10, 2014 to March 30, 2014. If the application is denied, a notice to that effect is sent to the borrower. Va., Inc., 543 F.2d 1075, 1080 (4th Cir. In Frank v. J.P. Morgan Chase Bank, N.A., No. The fee arrangement will be considered as an issue potentially affecting the credibility, rather than the admissibility, of the expert testimony. 1993) (quoting Blum v. Yaretsky, 457 U.S. 991, 1001 n.13 (1982)). Similarly, since Mr. Robinson has not suffered injury under these provisions, he may not bring those claims on behalf of the class. Id. 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. 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. 1024.41(f), (g), and (h), and Md. Corp. ("McLean II"), 398 F. App'x 467, 471 (11th Cir. Every mortgage has a unique loan number that can be used to identify the borrower and the loan in each of the four databases. 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." To calculate damages, Oliver stated that he would look to data from the LSAMS application, including data tables that contain fee information, to identify fees that would not have been charged but for Nationstar's various RESPA violations, but that he was not able to evaluate this data in his report because it had not been provided to him. After March 2014, Mrs. Robinson was primarily responsible for communicating with Nationstar and PaCE. That is not so here. 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. Furthermore, according to Nationstar, to identify the content of a letter sent to a borrower, the letter itself must be viewed. Fed. Thus, the Court concludes that, while Nationstar may have defenses as to some borrowers, the common proof that establishes the asserted violations, as well as the common question of whether the Robinsons can prove a pattern-or-practice violation by Nationstar, will predominate over the individual issues as to these claims. TDC-14-3667, 2019 WL 4261696 (D. Md. Eligible consumers will be contacted by Nationstar or the settlement administrator about refunds under the settlement. Law 13-316(c), which requires a response to a loan modification application within 15 days. Nationstar correctly notes that the Robinsons have not identified a false or misleading statement or representation by Nationstar in the record. These events will be represented by discrete data points in Nationstar's databases, such that these violations may be proved through that data. Id. 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. R. Civ. Law 13-301(1). 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." 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. Specifically, if a loss mitigation application is received "45 days or more before a foreclosure sale," the loan servicer must provide a notice to the borrower "in writing within 5 days" of receiving it in which the servicer acknowledges receipt of the application and states whether the "application is either complete or incomplete." Wirtz v. Specialized Loan Servicing, LLC, 886 F.3d 713, 719-20 (8th Cir. Although she has worked as a bookkeeper for various companies, she was not employed between March and September 2014. The Robinsons assert that they have paid a total of $6,147.12 in unspecified fees to Nationstar. A conflict of interest will not defeat the adequacy requirement when "all class members share common objectives[,] the same factual and legal positions, and . 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. Those claims arose from Nationstar's alleged Since the Court already considered and ruled on these issues, see supra part I.B, it will not revisit those arguments here. See, e.g. 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. 2605(f). 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. Co, 445 F.3d 311, 318 (4th Cir. Id. 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. Id. In support of this argument, Nationstar contends that the ethical rules for attorneys prohibit contingency fee arrangements with expert witnesses. Co., 595 F.3d 164, 179-80 (4th Cir. at *2. R. Civ. Ballard v. Blue Shield of S.W. v. W.R. Grace & Co., 6 F.3d 177, 188 (4th Cir. J. . Joint Record ("MSJ JR") 0102. 2013) (holding that the plaintiff sufficiently pleaded actual injury or loss under the MCPA where he alleged that he suffered "bogus late fees," damage to his credit, and attorney's fees); see also Cole v. Fed'l Nat'l Mortg. Nationstar denies all allegations of wrongdoing and no judgment or determination of wrongdoing has been made. Compl. Nationstar broke that trust by engaging in unfair and deceptive practices," Kraninger added. If more documents are required, then the same Remedy Star substatus and LSAMS code that denote missing documents are entered. The cases cited by the Robinsons do not alter the Court's conclusion. Life Ins. . Id. The Court does not find such a prohibition in the Maryland Attorneys' Rules of Professional Conduct. 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. . 2013). at 151. Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 344 (4th Cir. 1 . 12 U.S.C. 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. See id. Date: September 9, 2019, Civil Action No. In addition to the fines and restitution, Delaware Attorney General Kathleen Jennings said the settlements require Nationstar to adhere to increased "servicing standards." LLC, No. 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. They have a home in Damascus, Maryland purchased by Demetrius Robinson ("Mr. Robinson"). 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. Id. 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. ("MCC") 2, ECF No. Nationstar also argues that Oliver's report should be stricken as unreliable under the Federal Rules of Evidence and Daubert. See Tagatz, 861 F.2d at 1042. 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. Joint Record ("MCC JR") 0907. 2605(f)(1). 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. 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. Bouchat, 346 F.3d at 522. 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."). Class litigation would also promote consistent results on the common question whether Nationstar engaged in a pattern or practice of violating Regulation X and would provide Nationstar with finality and closure on that issue. Because Nationstar employees used standard templates to communicate with borrowers, Oliver concluded that Regulation X violations can be identified through the existence of noncompliant templates and the dates that those templates were in use. See D. Md. 1024.41(b)(2)(i)(B) and Md. McLean v. GMAC Mortg. Furthermore, determining whether statutory damages are available will require no individualized consideration, because the pattern-or-practice claim "would be based solely on" Nationstar's conduct and can be established through sampling. 1024.41(c)(1)(i)-(ii), (g). See supra parts I.B.1, I.B.3, I.C.1. 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. 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. MCC JR 318, 530-531. The use of a class action is primarily justified on the grounds of efficiency, because it advances judicial economy to resolve common issues affecting all class members in a single action. It does not mount any persuasive attack on Oliver's "principles and methodology," Westberry, 178 F.3d at 261, which largely consisted of counting the number of days between events and reviewing files for a particular loan to determine whether they contained certain standard content. On March 8, 2014, Nationstar sent to Mr. Robinson a letter stating that he was ineligible for a HAMP modification, but on March 15, 2014, it sent a different letter offering a loan modification under which Mr. Robinson would receive a reduced interest rate for two years. 2605(f). If a class is ascertainable, it must then satisfy all four elements of Rule 23(a): numerosity, commonality, typicality, and adequacy. The distinction is crucial. 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. Since Regulation X explicitly does not require a loan servicer to provide a loan modification, the Robinsons' claim that they suffered damages because they did not receive a loan modification is not cognizable under the statute. P. 23(b)(3). Where such statements in no way promise approval, the Robinsons appear to claim that such statements are false or misleading because Nationstar never intended to, and did not, evaluate the Robinsons for the various loss mitigation options. "There are going to be a lot of homeowners who need a home loan modification or other assistance," Raoul says. 1024.41(i). On February 16, 2017, the Court referred the case to United States Magistrate Judge Charles B. 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. . 1976). "[A] trial court should consider the specific factors identified in Daubert where they are reasonable measures of the reliability of expert testimony." Moreover, the conflict must not be "merely speculative or hypothetical." Nationstar's reliance on Accrued Financial Services v. Prime Retail, Inc., 298 F.3d 291 (4th Cir. Campbell v. Nationstar Mortg., 611 F. App'x 288, 297-98 (6th Cir. While class members would not be eligible for statutory damages unless actual damages are shown, see 12 U.S.C. 2010) (holding that a plaintiff who "was not a borrower or otherwise obligated on the . Signed by Judge Theodore D. Chuang on 8/18/2015. FCRA). Nationstar further argues that summary judgment must be entered in its favor on the Robinsons' claims under 12 C.F.R. After attempts to modify their 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.