Robinson et al v. Nationstar Mortgage LLC

Filing 232

MEMORANDUM OPINION. Signed by Judge Theodore D. Chuang on 9/9/2019. (heps, Deputy Clerk)

UNITED STATES DISTRICT COURT
DISTRICT OF MARYLAND

DEMETRIUS ROBINSON and
TAMARA ROBINSON,
Plaintiffs,
Civil Action No. TDC-14-3667

v.
NATIONS TAR MORTGAGE LLC,
Defendant.

MEMORANDUM OPINION
Plaintiffs Demetrius and Tamara Robinson (the "Robin sons") have resided in a home in
Damascus, Maryland that has been subject to a mortgage loan. After attempts to modify the loan
failed, the Robinsons filed a class action Complaint against Defendant Nationstar Mortgage, LLC
("Nationstar") for alleged violations ofthe Real Estate Settlement Procedures Act ("RESPA"), 12
U.S.C.

~S

"Regulation

2601-2617

(2012), specifically

X," 12 C.F.R.

S

RESPA's

implementing

regulations

known

as

1024.41 (2019), and the Maryland Consumer Protection Act

("MCPA"), Md. Code Ann., Com. Law

SS

13-101 to 13-411 (West 2015). Presently pending is

Nationstar's Motion for Summary Judgment, Nationstar's Motion to Strike, and the Robinsons'
Motion for Class Certification.

The Motions are fully briefed, and no hearing is necessary to

resolve the issues. See D. Md. Local R. 105.6. 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.

BACKGROUND
Relevant factual and procedural background is set forth in the Court's prior Memorandum
Opinion granting in part and denying in part Nationstar's partial Motion to Dismiss. See Robinson
v. Nationstar Mortg. LLC, No. 14-3667, 2015 WL 4994491, at *1-2 (D. Md. Aug. 19, 2015).
Additional facts relevant to the pending motions are set forth below.
I.

Motion for Summary Judgment
The Robinsons own a business called Green Earth Services, which provides waste and

recycling services to clients. They have a home in Damascus, Maryland purchased by Demetrius
Robinson ("Mr. Robinson").

In 2007, Mr. Robinson obtained a loan with the principal amount of

$755,000 to refinance the property. 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.
Nationstar ultimately became the servicer of the Robinsons' loan.
After several customers of Green Earth Services canceled its services, the Robinsons
sought loss mitigation in the form of a loan modification from Nationstar. Between July 2010 and
November 2013, the Robinsons submitted and Nationstar denied three applications for a loan
modification under the Home Affordable Modification Program ("HAMP").

The denial letters

stated that the loan's principal balance exceeded the limit under HAMP. As to the third denial on
November 7,2013, Nationstar informed the Robinsons that the loan modification application was
denied because the mortgage loan was not in default.
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

2

Nationstar.

In February 2014, after their income had further decreased, the Robinsons ceased

making payments on the mortgage loan. After this missed payment, Nationstar assessed a late fee.
After they became delinquent on their loan, the Robinsons submitted another loan
modification

application to Nationstar

on March 7, 2014.

When Nationstar

received the

application, it prevented late fees from being assessed and put a hold on any foreclosure
proceedings.

However, Nationstar did not comply with all requirements of Regulation X, which

became effective on January 10,2014.

At the time, Nationstar had not completed the process of

updating its systems to conform to those requirements.

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.
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. In
approving such a modification, Nationstar made a mistake: . the underwriter working on the
Robinsons' loan had erroneously double-counted their income. Before the error was discovered,
Mr. Robinson appealed this offer as insufficient on April 10,2014.
The Robinsons and Nationstar then engaged in a series of tortured exchanges over the next
several months. Mrs. Robinson was the primary point of contact for the Robinsons in interacting
with Nationstar.

Although she has worked as a bookkeeper for various companies, she was not

employed between March and September 2014. On May 5, 2014, Nationstar asked the Robinsons
for additional information to evaluate the appeal, including documents to verify their income. In
response, on May 30, 2014, Mr. Robinson sent Nationstar the exact same application that he had
submitted on March 7,2014.

On July 17,2014, Nationstar informed Mr. Robinson by letter that

3

he did not qualify for a HAMP modification and that since the March 14 loan modification offer
had not been accepted, it was withdrawn.
Mr. Robinson then submitted another loan modification application on August 25, 2014.
The next day, Nationstar sent a letter noting that the August 25 application had been received and
requesting additional information.

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.

During this time and up until September 25, 2017, Nationstar had not begun any

foreclosure proceedings on the Robinsons' home. The Robinsons have not made any mortgage
payments since January 2014 and have not been assessed any late fees since February 2014. From
January 2014 to the present, the Robinsons have not pursued other loss mitigation options, such as
a short sale.
The Robinsons assert that they have paid a total of $6,147.12 in unspecified fees to
Nationstar.

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. The Robinsons also claim as damages interest overcharges of approximately $141,000.
II.

Motion for Class Certification
A.

Procedural History

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. 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. On February 16,2017, the Court referred the case to

4

United States Magistrate Judge Charles B. Day to address discovery issues. 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. Class Certif. Joint Record
("MCC JR") 0907. After two more extensions were granted, based on a finding by the Magistrate
Judge that "Defendant has failed to comply" with its discovery obligations and delayed the process,
discovery closed on March 22, 2018. Order, ECF No. 125.
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. 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. The Robinsons' expert had written the scripts using data dictionaries and
without accessing the databases. The Magistrate Judge ordered Nationstar to run those scripts and
return the electronic data to the Robinsons. 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.

Discovery Order, ECF No. 143.

The Robinsons appealed the Magistrate Judge's ruling because it did not require Nationstar to run
a structural script for a third database. On July 16,2018, the Court affirmed the Magistrate Judge's

5

ruling and required Nationstar to produce all outstanding "records subject to discovery orders."
Order at 2, ECF No. 164. After an additional period of expert discovery relating to the class
certification motion, discovery closed on December 30,2018.
B.

Nationstar Tracking Systems

Nationstar employees use four software applications and databases to store and track
electronic information relating to loans: (l) 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.

Every mortgage has a unique loan

number that can be used to identify the borrower and the loan in each of the four databases.
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.

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. A letter noting receipt of the application is automatically generated and
sent to the borrower, and a Nationstar employee checks the application's

documentation

to

determine if it is complete based on a checklist. Whether an application is complete depends on

6

the requirements of the investor who holds the loan. 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. A code is also added to LSAMS to put a hold on foreclosure
proceedings.

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. A code is entered in Remedy Star when the letter is sent. These letters are based on
standard Nationstar templates, and the code reflects the type of letter sent.
Once an underwriter is assigned, that employee double-checks whether the application
contains all required documentation and is complete.

If more documents are required, then the

same Remedy Star substatus and LSAMS code that denote missing documents are entered. Once
the documents are received, the Remedy Star substatus and LSAMS code are changed again to
mark the application complete. The loan is then evaluated for loan modification options. If the
application is denied, a notice to that effect is sent to the borrower.

When each event occurs-

either the mailing of a letter or the changing of a code or substatus-the

date is recorded in the

databases.
C.

Class Methodology

The Robinsons'

designated expert, Geoffrey Oliver, has offered a methodology

for

identifying class members and when their rights under RESPA and the MCP A have been violated.
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.

He was retained by the Robinsons under an arrangement through which he is to be

paid a flat fee of $125,000: $62,500 up front, with an additional $62,500 to be paid if a class is

7

certified in this case. To prepare his expert report, Oliver reviewed a randomly selected sample of
400 loans serviced by Nationstar in which a loan modification application was submitted.
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.

According to

Oliver, to determine that certain disclosures or specific information were conveyed to borrowers,
the "object_id" field used in FileNet can be used to identify the type of letter sent. Furthermore,
Oliver states that since Nationstar employees used templates to communicate with borrowers, he
could determine whether there were violations of certain RESP A provisions based on entries
showing that Nationstar employees used templates that did not comply with RESP A. He asserts
that damages to borrowers can be calculated based on entries in LSAMS and other data showing
that fees were assessed, and that it would be possible to identify which fees would not have been
assessed but for a RESP A violation.
Because of the manner in which class discovery was conducted, see supra part II.A, Oliver
did not have access to all of Nations tar' s data fields for the representative sample ofloans. Instead,
he analyzed certain data fields that were returned by the scripts written by a different expert.
According to Oliver, if he used incorrect data, that was a result of the limited data fields and
definitions provided to him.

Based on his experience and review of deposition transcripts of

Nationstar employees, Oliver asserts that Nationstar has computerized data from which RESPA
violations may be identified, not least because Nationstar must be able to demonstrate
compliance with RESP A to regulators.

8

its

In contrast, Nationstar maintains that there is no way to reliably identify when a loss
mitigation application is submitted or complete using codes and status change entries in its existing
software, and that the only way to make those determinations is through a file-by-file review.
Specifically, the application itself would have to be reviewed to determine when it was stamped
as received by Nationstar. In addition, Nationstar asserts that not all loan modification applications
referred to an underwriter are complete. 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.

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.

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 RESP A violations, because the software does not reflect who paid the
fee.
Furthermore, according to Nationstar, to identify the content of a letter sent to a borrower,
the letter itself must be viewed. Nationstar has no process for standardizing file names. The entry
under "object_id"

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. Moreover, because borrowers often submit multiple loan modification
applications, and because Nationstar's data is stored at the loan level, not at the application level,
Nationstar claims that it is not possible to tell from the data alone, without reviewing the files,

9

whether a status or code change is in response to a specific loan modification

application.

Nationstar claims that manual review of each file would take about 60 to 90 minutes per file.
DISCUSSION
I.

Motion for Summary Judgment
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
RESP A; (2) RESP A 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.

SS

1024.41(f), (g), and (h); and (4) there is no evidence of actual damages

from any RESPA violation. Nationstar also asserts that the Robinsons have not identified evidence
sufficient to support their MCP A claims.
A.

Legal Standard

Under Federal Rule of Civil Procedure 56(a), the Court grants summary judgment if the
moving party demonstrates that there is no genuine issue as to any material fact, and that the
moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986). In assessing the Motion, the Court views the facts in the light
most favorable to the nonmoving party, with all justifiable inferences drawn in its favor. Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). The Court may rely only on facts supported in
the record, not simply assertions in the pleadings.

Bouchat v. BaIt. Ravens Football Club, Inc.,

346 F.3d 514, 522 (4th Cir. 2003). A fact is "material" ifit "might affect the outcome of the suit
under the governing law." Anderson, 477 U.S. at 248. A dispute of material fact is only "genuine"
if sufficient evidence favoring the nonmoving party exists for the trier of fact to return a verdict
for that party. Id. at 248--49.

10

B.

RESPA

Congress enacted RESP A 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."
regulations, codified at 12 C.F.R.
C.F.R.

S

SS

12 U.S.C.

S

2601(a).

RESPA's implementing

1024.1 to 1024.41 and known as "Regulation X," see 12

1024.1, prescribe additional duties and responsibilities

RESPA. Regulation X went into effect on January 10,2014.

of mortgage servicers under

Mortgage Servicing Rules Under

the Real Estate Settlement Procedures Act ("Regulation X"), 78 Fed. Reg. 10696, 10708 (Feb. 14,
2013) (codified at 12 C.F.R. Part 1024).
Under a provision of Regulation X entitled "Loss mitigation procedures,"

mortgage

servicers must take certain steps when a borrower applies for loss mitigation measures, such as the
loan modifications sought in this case. See 12 C.F.R.

S 1024.41.

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."

12 C.F.R

S

1024.41(b)(2)(B).

A complete loss mitigation application is "an

application in connection with which a servicer has received all the information that the servicer
requires from a borrower in evaluating applications for the loss mitigation options available to the
borrower."

Id.

S 1024.41(b)(1).

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

11

loss mitigation options, if any, it will offer," and include a statement of applicable appeal rights.
Id.

S

1024.41(c)(l)(i)-(ii),

(g). That notice must be provided within 30 days of receiving the

complete loss mitigation application.

Id

S 1024.41(c)(I).

"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." Id.

S

1024.41(d). If the loan

servicer denies a loan modification application where the complete application was received more
than 90 days before a foreclosure sale, the servicer must allow the borrower to appeal and must
respond to the appeal within 30 days of receiving it by stating in writing whether the appeal was
granted and a loan modification will be offered. Id.

S 1024.41 (h)(l),

(4). 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." Id.

S 1024.41(i).

A borrower may enforce violations of these provisions through a private cause of action
pursuant to 12 U.S.C.

S 2605(t).

See 12 C.F.R.

S

1024.41 (a). A servicer that fails to comply with

Regulation X is liable for actual damages and, upon a finding of a "pattern or practice" of noncompliance by the servicer, up to $2,000 in statutory damages. 12 U.S.C.

S 2605(t)(l).

For a class

action brought for violations of Regulation X, a servicer is liable for "actual damages to each of
the borrowers in the class" and, upon a finding of a "pattern or practice" of noncompliance,
statutory damages amounting to a maximum of $2,000 per class member up to a total of the lesser
of $1 million or one percent of the servicer's net worth. Id.

12

S 2605( t)(2).

1.

Mrs. Robinson

Nationstar argues that summary judgment

should be granted against Mrs. Robinson

because she is not a "borrower" within the meaning of RESP A. A "borrower" may enforce the
provisions of Regulation X pursuant to 12 U.S.C. ~ 2605(f).

12 C.F.R. ~ 1024.41(a).

That

provision provides, in parallel, that a loan servicer which does not comply with Regulation X is
liable "to the borrower."

12 U.S.C. ~ 2605(f). It follows that only borrowers may bring a claim

that a loan servicer has violated Regulation X. See Johnson v. Ocwen Loan Servicing, 374 F.
App'x 868, 873 (11 th Cir. 2010) (holding that a plaintiff who "was not a borrower or otherwise
obligated on the ... loan" did not have standing to bring a RESP A claim); Nelson v. Nationstar
Mortg. LLC, No. 16-0307,2017 WL 1167230, at *3 (E.D.N.C. Mar. 28, 2017). Courts have held
that a person who did not sign the promissory note is not a "borrower" for the purposes of RESP A
because that individual has not "assumed the loan." Nelson, 2017 WL 1167230, at *3 (collecting
cases).
Here, Mrs. Robinson signed the Deed but did not sign the Note. 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. Mot. Summ. J. Joint Record ("MSJ JR") 0102. Thus, Mrs.
Robinson is not "obligated" to pay the amount due on the Note and therefore is not a "borrower"
for purposes ofRESPA.

Johnson, 374 F. App'x at 873; Keen v. Ocwen Loan Servicing, LLC, No.

17-0982, 2018 WL 4111938, at *5-6 (M.D. 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

13

on the security instrument, but did not sign the promissory note, was not a borrower under
RESPA).
The cases cited by the Robinsons do not alter the Court's conclusion.
Am. Home Loans, No. 09-08213,2011

In Washington v.

WL 11651320 (C.D. Cal. Nov. 12,2011), the court held

that a plaintiff who signed a deed of trust on a property and was ajoint tenant with her son, but did
not sign the promissory note, had constitutional standing to bring a RESP A claim because she
stood to be injured if a default on her son's loan led to the loss of her equitable interest in the
property. Id. at *2. The court, however, did not explain how in the absence of any obligation to
pay back to the Note, the plaintiff qualified as a "borrower" under the RESP A statute. Id. In
Frank v. JP. Morgan Chase Bank, NA., No. 15-05811,2016

WL 3055901 (N.D. Cal. 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. Id. at *5.

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. Id. 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. Indeed, Mr. Robinson
testified that Mrs. Robinson did not sign the Note because she did not purchase the property with
him. Where the deed oftrust explicitly states that Mrs. Robinson is not obligated on the loan, the
Court finds that she is not a borrower under RESP A and cannot bring the claim against N ationstar
under Regulation X. See Keen, 2018 WL 4111938, at *5-6. Nationstar's Motion for Summary
Judgment will be granted as to Tamara Robinson.

14

2.

Subsequent Loss Mitigation Application

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.
Regulation X, which became effective on January 10,2014, 78 Fed. Reg. 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."

S

12 C.F.R

1024.41 (i). The regulation is silent on whether a loss mitigation application submitted before

January 10,2014 could qualify as the "single complete loss mitigation application."
Fed. Reg. 10696, 10836.

See id.; 78

While several district courts have concluded that loss mitigation

applications submitted before Regulation X's effective date do not count as the single application
for which a loan servicer must comply with Regulation X, see, e.g., Farber v. Brock & Scott, LLC,
No. 16-0117,2017 WL 4347826, at *15 (D. Md. Sept. 29, 2017); Billings v. Seterus, Inc., 170 F.
Supp. 3d 1011, 1015 (W.D. Mich. 2016), at least one district court has held that loan servicers
need not comply with Regulation X if the borrower had previously submitted a loss mitigation
application before the January 10,2014 effective date, see Trionfo v. Bank of America, NA., No.
15-0925,2015 WL 5165415, at *4 (D. Md. Sept. 2, 2015).
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.

The language of the regulation states not that a loan servicer must comply with

Regulation X's requirements only for a borrower's first loss mitigation application, but that a loan
servicer must "comply with the requirements"

15

only "for a single complete loss mitigation

application."

12 C.F.R ~ 1024.41(i). The distinction is crucial. Regulation X's effective date

reflected "an intent not to apply it to conduct occurring prior to that date." Campbell v. Nationstar
Mortg., 611 F. App'x 288, 297-98 (6th Cir. 2015) (holding that Regulation X did not apply to loss
mitigation applications submitted before the effective date). 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. Accordingly, a loan servicer must
comply with Regulation X as to the first loss mitigation application submitted after the effective
date. See Farber, 2017 WL 4347826 at 15; Billings, 170 F. Supp. 3d at 1014.
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. Therefore, Nationstar was required to comply with section 1024.41 in processing it. See 12
C.F.R. ~ 1024.41 (i). The Court will therefore deny the Motion for Summary Judgment as to this
argument.
3.

12 C.F.R. ~ 1024.41(f), (g), (h)

Nationstar further argues that summary judgment must be entered in its favor on the
Robinsons' claims under 12 C.F.R. ~ 1024.41(t), (g), and (h) because there is no evidence in the
record that Nationstar violated those provisions. Under subsections (t) 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. Id. ~ 1024.41 (t),
(g).

The record is undisputed that as of September 25, 2017, Nationstar had neither started

foreclosure proceedings nor moved for foreclosure judgment on the Robinsons' home. 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

16

proceedings while a loan modification application was pending. Opp'n Mot. Summ. J. ("Opp'n')
13, ECF No. 222. Summary judgment will therefore be entered for Nationstar on the claims that
Nationstar violated subsections (f) and (g).
Under subsection (h), if a loan servicer receives a complete loss mitigation application
more than 90 days before a foreclosure sale but then denies the application, the servicer must allow
the borrower to appeal and must respond to the appeal within 30 days of receiving it.

S 1024.41(h)(l),

1d.

(4). Nationstar sent Mr. Robinson two letters denying his loan modification

application on July 17,2014 and September 9,2014, but there is no evidence in the record that the
Robinsons submitted an appeal to either of those letters. 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.
C.F.R.

S 1024.41 (h)(l).

The Robinsons do not address this argument in their Opposition.

See 12
Since

there is no genuine issue of material fact as to whether Nationstar violated subsection (h), summary
judgment will be entered for Nationstar on that claim.
4.

Actual Damages

Finally, N ationstar argues that summary judgment should be entered on the RESP A claims
because the Robinsons cannot establish that they have suffered actual damages as a result of
Nationstar's violations of Regulation X.
A servicer that fails to comply with Regulation X is liable for "any actual damages to the
borrower as a result of the failure" to comply.

S 1024.41(a).

12 U.S.C.

S 2605(f)(l)(A);

see 12 C.F.R.

Plaintiffs "must present specific evidence to establish a causal link between the

[servicer's] violation and their injuries." McLean v. GMAC Mortg. Corp. ("McLean 11'),398 F.
App'x 467, 471 (lIth Cir. 2010). Actual damages may include late fees; denial of credit or access

17

to the full amount of a credit line; out-of-pocket expenses incurred in dealing with a RESP A
violation, such as expenses for preparing and copying correspondence;

and lost time and

inconvenience, including time spent away from employment while preparing correspondence "to
the extent it resulted in actual pecuniary loss." McLean v. GMAC Mortg. Corp. ("McLean 1'),595
F. Supp. 2d 1360, 1366 (S.D. Fla. 2009), aff'd, 398 F. App'x 467, 471 (1Ith Cir. 2010). But see
Sutton v. CitiMortgage, Inc., 228 F. Supp. 3d 254, 274-75 (S.D.N.Y. 2017) (holding that
"incidental costs related to the sending of correspondence" to the servicer, including "postage and
travel," are not actual damages under RESP A because such a rule "would transform virtually all
unsatisfactory borrower inquiries into RESP A lawsuits"). Actual damages may also include "nonpecuniary damages, such as emotional distress and pain and suffering." McLean 11,398 F. App'x
at 471.
Some courts have held that administrative costs that predate the alleged RESP A violation
cannot constitute "actual damages." See, e.g., Linderman v. Us. Bank Nat 'f Ass'n, 887 F.3d 319,
321 (7th Cir. 2018). 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 ... cause (d] damages retroactively" and "transmogrifie( d]"
the costs that predate the RESP A violation into damages. Marais v. Chase Home Fin., LLC, 24 F.
Supp. 3d 712, 728 (S.D. Ohio 2014).
In Baez v. Specialized Loan Servicing, LLC, 709 F. App'x 979 (11th Cir. 2017), the United
States Court of Appeals for the Eleventh Circuit held that postage costs incurred by the plaintiff to
send the "initial request for information is not a cost to the borrower 'as a result ofthe failure' to
comply with a RESP A obligation," because a violation has not occurred and will not "necessarily
occur" at the time the plaintiff paid the postage. Id. at 983. The Court agrees that costs, including

18

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. Id. at 983 (quoting 12 U.S.C.

S 2605(f)(l)(A)).

However, ifthe costs

are shown to have been incurred in response to the RESP A violation, the Court finds that they
would be actual damages within the meaning of 12 U.S.C.

S 2605(f).

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.

S 2605(f)(l)(B),

a borrower cannot recover these additional damages "without first

recovering actual damages." Wirtz v. Specialized Loan Servicing, LLC, 886 F.3d 713, 719-20 (8th
Cir. 2018); Renfroe v. Nationstar Mortg., LLC, 822 F.3d 1241, 1247 nA (lIth Cir. 2016) (dicta).
But see Ayres v. Ocwen Loan Servicing, LLC, 129 F. Supp. 3d 249, 266 (D. Md. 2015).
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." Am. Compi. ~~ 89, 90, ECF No. 261. 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. They do not seek damages in the Amended Complaint
for emotional distress or include such a claim in their itemized list of damages submitted in
discovery.

19

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.
He asserted that the amount of fees was calculated based on Nationstar's statements, but he could
not specify the nature of the fees. 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. After March 2014, Mrs. Robinson was primarily responsible for communicating
with Nationstar and PaCE. While she is trained as a bookkeeper, at the time of the Robinsons'
2014 application for a loan modification and in the subsequent months, Mrs. Robinson was not
employed in any capacity.
Some of the alleged damages are not supported in law or in fact.

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. See 12 C.F.R.

S 1024.41(a).

Although the Robinsons contend that they would

have pursued other loss mitigation options in the absence of the RESP A violations, they have not
identified any such options in a way that would permit a calculation of damages associated with
any lost opportunity.

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." Baez, 709 F. App'x at 983. Likewise, although Mrs.
Robinson expended time corresponding with Nationstar, she was not working for pay at the same
time, and the Robinsons have not provided evidence to quantify the loss to Mr. Robinson, the only
viable plaintiff here. 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

20

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. McLean 1,595 F. Supp. 2d at
1366.
In contrast, the Court finds that there is a genuine issue of material fact whether the
administrative

costs and fees incurred by the Robinsons resulted from Nationstar's

RESPA

violations. 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. 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.

Similarly, though the precise nature of the fees

imposed was not specified, it is reasonable to infer that some were attributable to delays linked to
RESPA violations. Finally, while Nationstar presented arguments for why the Robinsons have not
shown damages as to most of the asserted categories, it did not advance any argument for why the
interest damages claimed by the Robinsons were not attributable to Nationstar's

Regulation X

violations and thus is not entitled to summary judgment on that issue. 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.
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. See Wirtz, 886 F.3d at 719-20.

21

C.

MCPA

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 13316(c) of the MCPA. The Court will address the varying claims in tum.
1.

Sections 13-301 and 13-303

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. Md. Code Ann., Com. Law

SS

13-303(4)-(5),

13-408.

To establish an MCPA

violation under this provision, a plaintiff must establish that (I) 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. Stewart v. Bierman, 859 F. Supp. 2d 754, 768-69 (D.
Md. 2012) (citing Lloyd v. Gen. Motors Corp., 916 A.2d 257, 277 (Md. 2007)), aff'd sub nom.
Lembaeh v. Bierman, 528 F. App'x 297 (4th Cir. 2013). An "unfair or deceptive" trade practice
includes a "false ... or misleading oral or written statement ... or other representation ... which
has the capacity, tendency, or effect of deceiving or misleading consumers."
Com. Law

S

Md. Code Ann.,

13-301(1).

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.

Am. CompI. ~ 120.

Nationstar correctly notes that the

Robinsons have not identified a false or misleading statement or representation by Nationstar in
the record. Furthermore, to the extent that the Robinsons' claim is that Nationstar falsely stated

22

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.

See, e.g. MSJ JR 0284.

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. The Robinsons, however, have not identified any evidence that Nationstar did not intend
to, and did not, conduct such evaluations.

Instead, the Robinsons assert that Nationstar has not

affirmatively proven that it conducted such reviews. This assertion mischaracterizes the burden
of proof in a civil case. It is the plaintiffs who bear the burden of proving their claims. At this
stage of the proceedings, the Court must rely on facts in the record, and not assertions in the
pleadings.

Bouchat, 346 F.3d at 522. 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. Accordingly, Nationstar's Motion for Summary Judgment will be
granted as to the MCPA claims under sections 13-301 and 13-303.
2.

Section 13-316

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."

Md. Code Ann., Com. Law

damages caused by the violation." Id.

S

13-316( c). The servicer "is liable for any economic

S 13-316(e)(1).

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

23

or inquiry that triggers a duty to respond.

This Court previously held that a loan modification

application can be an inquiry under the MCPA that triggers a duty to respond, and that in the case
of the Robinsons, the loan modification application that was "submitted at the request of
Nationstar[] necessarily seeks a response." Robinson, 2015 WL 4994491, at *4 (citing Marchese
v. JPMorgan Chase Bank, NA., 917 F. Supp. 2d 452,467 (D. Md. 2013)). The Court will not
revisit this determination.
Nationstar further argues that the Robinsons cannot show that they suffered economic
damages as a result of the violation of section 13-316.

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. Code Ann., Com. Law

S 13- 316( e), for the reasons

stated above, see supra part

1.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. Cf Marchese v. JPMorgan Chase Bank, NA., 917 F. Supp. 2d 452, 468 (D. Md. 2013)
(holding that the plaintiff sufficiently pleaded actual injury or loss under the MCP A 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. Ass 'n, No. 15-3960,2017 WL 623465, at *8 (D. Md. Feb. 14,2017) (holding
that the plaintiff sufficiently pleaded damages under the MCP A where she alleged that the
defendant's failures to respond "resulted in the continual assessment of accruing interest, fees and
costs on the mortgage account," as well as "stress, physical sickness, headaches, sleep deprivation,
worry, and pecuniary expenses"). Nationstar's Motion will be denied as to this claim.
II.

Motion to Strike
In its Motion to Strike, Nationstar moves to strike the report of the Robinsons' expert

witness, Geoffrey Oliver, on the grounds that (1) Oliver was hired pursuant to an ethically

24

improper contingency fee agreement; and (2) his testimony does not meet the requirements of
Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579
(1993).

A.

Contingency Fee Arrangement

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 asserts that Oliver's testimony should be stricken because this fee
arrangement includes an unethical contingency fee. See Farmer v. Ramsay, 159 F. Supp. 2d 873,
883 (D. Md. 2001) (striking expert testimony because of a contingent fee arrangement), aff'd, 43
F. App'x 547 (4th Cir. 2002) (affirming without addressing the propriety of the striking of the
expert testimony).

In support of this argument, Nationstar contends that the ethical rules for

attorneys prohibit contingency fee arrangements with expert witnesses. The Court does not find
such a prohibition in the Maryland Attorneys' Rules of Professional Conduct. The relevant rule
prohibits an attorney from "offer(ing] an inducement to a witness that is prohibited by law." Md.
Rules ~ 19-303.4(b) (2018). The comments to that rule state that the "common law rule in most
jurisdictions is ... that it is improper to pay an expert witness a contingent fee." Id. ~ 19-303.4
cmt.3. Neither the rule nor the comment, however, state whether Maryland is one such jurisdiction.
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.

See Md. Rules Profl Conduct 3.4 cmt. (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 ofthe case").

25

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.
Moreover, even if the fee arrangement violated the ethical rules for attorneys, "it does not
follow that evidence obtained in violation of the rule is inadmissible."

Tagatz v. Marquette Univ.,

861 F.2d 1040, 1042 (7th Cir. 1988) (distinguishing between a rule of professional conduct and
admissibility of evidence); cf Universal Athletic Sales Co. v. Am. Gym, Recreational & Athletic
Equip. Corp., 546 F.2d 530, 538-39 (3d Cir. 1976) (holding that while it may be unethical for a
lawyer to testify on behalf of a client as an expert, "it does not necessarily follow that any alleged
professional

misconduct"

would require exclusion of the testimony

because the rules of

professional conduct do "not delineate rules of evidence"); United States v. Fogel, 901 F.2d 23,
26 (4th Cir. 1990) (citing Universal Athletic favorably for this proposition).
Evidence do not prohibit these kinds of arrangements.

The Federal Rules of

See Fed. R. Evid. 702, 703. Rather than

rendering the testimony inadmissible, the fee arrangement is relevant to the expert's credibility.
Tagatz, 861 F.2d at 1042; cf United States v. Valona, 834 F.2d 1334, 1344 (7th Cir. 1987)
(holding, in the context of an informant who is paid a contingent fee, that the fee should be treated
"as a credibility factor").
Nationstar's

reliance on Accrued Financial Services v. Prime Retail, Inc., 298 F.3d 291

(4th Cir. 2002), is misplaced.

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

26

"provide for supplying expert testimony for a contingent fee." Id at 300. 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. Id at 300.
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. See id
Where Accrued Financial addresses a different scenario with a different remedy, the Court
does not find that it requires that the testimony of an expert witness paid on contingency fee basis
must be excluded. 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.

See Tagatz, 861 F.2d at 1042. The fee arrangement will be considered as an issue

potentially affecting the credibility, rather than the admissibility, of the expert testimony. See id
B.

Daubert

Nationstar also argues that Oliver's report should be stricken as unreliable under the
Federal Rules of Evidence and Daubert.

Rule 702 permits an expert to testify if the testimony

"will help the trier of fact to understand the evidence or to determine a fact in issue," "is based on
sufficient facts or data," and "is the product of reliable principles and methods," and if the expert
has "reliably applied the principles and methods to the facts of the case." Fed. R. Evid. 702. When
considering whether expert testimony is reliable or should be excluded, the court considers the
following factors:
(1) [W]hether a theory or technique can be or has been tested; (2) whether it has
been subjected to peer review and publication; (3) whether a technique has a high
known or potential rate of error and whether there are standards controlling its

27

operation; and (4) whether the theory or technique enjoys general acceptance within
a relevant scientific community.
Hickerson v. Yamaha Motor Corp., 882 F.3d 476,480 (4th Cir. 2018) (quoting Cooper v. Smith &
Nephew, Inc., 259 F.3d 194, 199 (4th Cir. 2001)). The inquiry is meant to be "flexible" and the
factors "helpful, not definitive." Id. (quoting Kumho Tire Co. v. Carmichael, 526 U.S. 137, 15051 (1999)). The court's analysis should focus "on the 'principles and methodology' employed by
the expert, not on the conclusions reached," Westberry v. Gislaved Gummi AB, 178 F.3d 257,261
(4th Cir. 1999) (quoting Daubert,

509 U.S. at 594-95),

and "whether the reasoning

or

methodology" is "scientifically valid" and "properly can be applied to the facts in issue," Cooper
v. Smith & Nephew, Inc., 259 F.3d 194, 199 (4th Cir. 2001) (quoting Daubert, 509 U.S. at 59293).
"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." Messner v. Northshore Univ. HealthSystem,
669 F.3d 802,812 (7th Cir. 2012). An expert's testimony is "critical" where it is "important to an
issue decisive for the motion for class certification." Id. 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.
Oliver's expert report focuses on the use of Nationstar's internal databases to determine
whether Nationstar has systematically failed to comply with various requirements of Regulation
X. 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
28

complete, and the sending of an acknowledgment

or decision letter to a borrower-and

then

counting the days between the dates to assess whether a RESP A timing requirement was satisfied.
From this approach, Oliver concluded that for approximately 60 percent of the sampled loans,
Nationstar failed to comply with the requirement that it inform the borrower of loss mitigation
application determination within 30 days of receiving a complete application.

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.
For the Regulation X provisions that require the servicer to communicate

specific

information to a borrower, Oliver's methodology involves reviewing a sampie of loan files and
identifying a specific communication to a borrower based on the file name. 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. 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. 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 RESP A violations, but that he was not
able to evaluate this data in his report because it had not been provided to him. 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. MCC JR 0003.

29

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.
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. 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.

Id at 151. "[A] trial court should consider the specific factors

identified in Daubert where they are reasonable measures of the reliability of expert testimony."
Id at 152. Because Oliver analyzed proprietary databases and data specifically disclosed for this
litigation pursuant to a protective order, such that Oliver's peers lack access to the same
information, Oliver's expert testimony is not of the type that ordinarily would be subject to peer
review, and it would be unfair to require "general acceptance within a relevant scientific
community."

Hickerson, 882 F.3d at 480 (quoting Cooper, 259 F.3d at 199).

As for the claims of errors in Oliver's analysis, although this criticism is couched as his
"misunderstanding

the nature of Nationstar's

various databases," Nationstar largely challenges

Oliver's failure to use particular data fields, some which were never made available to him. 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.

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

30

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. 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.

Notably, Oliver's analysis did not consider foreclosure information because the data produced did
not include dates of foreclosure sales. 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.

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.

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.
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
available to him.

failure to make relevant data

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. See Tyson Foods v. Bouaphakeo, 136 S. Ct. 1036,
1045 (2016) ("When 'one or more of the central issues in the action are common to the class and
can be said to predominate, the action may be considered proper under Rule 23(b)(3) even though
other important matters will have to be tried separately, such as damages or some affirmative
defense peculiar to some individual class members.'" (quoting 7AA Charles Allan Wright et aI.,
Federal Practice and Procedure

S

1778 (3d ed. 2005))). Because Oliver's methodology is reliable

31

within the meaning of Federal Rule of Civil Procedure 702 and Daubert, Nationstar's Motion to
Strike will be denied.
III.

Motion for Class Certification
In their Motion for Class Certification, the Robinsons seek certification of two classes. 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."

Mot. Class Cert. ("MCC") 2, ECF No. 218.

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."

Id.

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.
First, as a threshold matter, the Court notes that in ruling on Nationstar's

Motion for

Summary Judgment, it will grant judgment in favor of Nationstar as to Mrs. Robinson's claims,
Mr. Robinson's RESPA claims under 12 C.F.R.

S

1024.41(f), (g), and (h), and Mr. Robinson's

MCPA claim under sections 13-301 and 13-303. See supra parts LB.l, LB.3, LC.I. "[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.'"
Cent. Wesleyan Col!. v. WR. Grace & Co., 6 F.3d 177, 188 (4th Cir. 1993) (quoting Blum v.
Yaretsky, 457 U.S. 991, 1001 n.13 (1982)).

Since Mrs. Robinson may not bring a claim under

Regulation X, she may not be a named class representative.

Similarly, since Mr. Robinson has not

suffered injury under these provisions, he may not bring those claims on behalf of the class. See
Lierboe v. State Farm Mut. Auto. Ins. Co., 350 F.3d 1018, 1023 (9th Cir. 2003) ("[I]fLierboe

32

has

no stacking claim, she cannot represent others who may have such a claim, and her bid to serve as
a class representative must fail."); cf Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338,348-49 (2011)
("[A] class representative must be part of the class and possess the same interest and suffer the
same injury as the class members." (quoting East Tex. Motor Freight System, Inc. v. Rodriguez,
431 U.S. 395,403 (1977))).
A.

Legal Standard

A class action allows representative parties to prosecute not only their own claims, but also
the claims of other individuals which present similar issues. Thorn v. Jefferson-Pilot Life Ins. Co,
445 F.3d 311, 318 (4th Cir. 2006). 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. Id. Because of the need to protect the rights of absent plaintiffs to
assert different claims and of defendants to assert facts and defenses specific to individual class
members, courts must conduct a "rigorous analysis" of whether a proposed class action meets the
requirements of Federal Rule of Civil Procedure 23 before certifying a class. See id. Courts have
wide discretion to certify a class based on their familiarity with the issues and potential difficulties
arising in class action litigation. See, e.g., Wardv. Dixie Nat. Life Ins. Co., 595 F.3d 164, 179 (4th
Cir. 2010). A plaintiff has the burden to show that all of the necessary prerequisites for a class
action have been met. Gunnells v. Healthplan Serv., Inc., 348 F.3d 417,458 (4th Cir. 2003).
The first of these prerequisites is that the class must exist and be "readily identifiable" or
"ascertainable" by the court through "objective criteria." EQT Prod. Co v. Adair, 764 F.3d 347,
359-60 (4th Cir. 2014). 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." Id. at 358. For example, in EQT,

33

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. Id. at 359-60.
If a class is ascertainable, it must then satisfy all four elements of Rule 23(a): numerosity,
commonality, typicality, and adequacy. To satisfy the numerosity requirement, the proposed class
must be so numerous that "joinder of all members is impracticable."

Fed. R. Civ. P. 23(a)(1). In

assessing this element, "numbers alone are not controlling" and a district court should consider
"all of the circumstances of the case." Ballard v. Blue Shield of S. W Va., Inc., 543 F.2d 1075,
1080 (4th Cir. 1976). 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.
1984), and has upheld the certification ofa class with as few as 18 members, Cypress v. Newport
News Gen. & Nonsectarian Hasp. Ass 'n, 375 F.2d 648, 653 (4th Cir. 1967). 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. See Hayes v. Wal-Mart
Stores, Inc., 725 F.3d 349,356-57

(3d Cir. 2013); Poindexter v. Teubert, 462 F.2d 1096, 1097

(4th Cir. 1972).
Commonality requires that a class have "questions of law or fact common to the class"
which are capable of classwide resolution, such that the determination of the truth or falsity of the
common issue "will resolve an issue that is central to the validity of each one of the claims in one
stroke." Fed. R. Civ. P. 23(a)(2); Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338,350 (2011).
As for typicality, the named plaintiff must be "typical" of the class, such that that the class
representative's

claim and defenses are "typical of the claims or defenses of the class" in that

prosecution of the claim will "simultaneously tend to advance the interests of the absent class

34

members."

Fed. R. Civ. P. 23(a)(3); Deiter v. Microsoft Corp., 436 F.3d 461, 466-67 (4th Cir.

2006). 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 plaintiffs own individual claim. Deiter, 436
F.3d at 466-67. In analyzing this question, a court compares the class representative's

claims and

defenses to those of the absent class members, considers the facts needed to prove the class
representative's

claims, and assesses the extent to which those facts would also prove the claims

of the absent class members. Id. 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.

Broussard v.

Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 344 (4th Cir. 1998).
Finally, the named plaintiff must "fairly and adequately protect the interests of class"
without a conflict of interest with the absent class members.

Fed. R. Civ. P. 23(a)(4); Ward v.

Dixie Nat'l Life Ins. Co., 595 F.3d 164, 179-80 (4th Cir. 2010). A conflict of interest will not
defeat the adequacy requirement when "all class members share common objectives[,] the same
factual and legal positions, and ... the same interest in establishing the liability of defendants."
Ward, 595 F.3d at 180 (quoting Gunnells, 348 F.3d at 430). Moreover, the conflict must not be
"merely speculative or hypothetical."

Id.

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.

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."

Fed. R. Civ. P. 23(b)(3). Factors "pertinent" to the predominance

and superiority requirements include the "class members' interests in individually controlling" the

35

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.

Id.

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."
Amchem Prods. v. Windsor, 521 U.S. 591, 623-24 (1997). The predominance and superiority
requirements

under Rule 23(b)(3) are designed to ensure that the class action "achieve[s]

economies of time, effort, and expense, and promote [s] ... uniformity of decision as to persons
similarly situated, without sacrificing procedural fairness or bringing about other undesirable
results."

Gunnells, 348 F.3d at 424 (quoting Amchem, 521 U.S. at 615). If the named plaintiff

satisfies all of the Rule 23(a) requirements and the Rule 23(b)(3) requirements,

then class

certification is appropriate.
Finally, the Court notes that a decision to certify a class is based on whether or not a
putative class satisfies the Rule 23 factors, not on a preliminary assessment of the underlying merits
of the claim. 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. ").
B.

12 C.F.R. ~ 1024.41(c)(1)(i) and (d)

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.

S

1024.41(c)(1)(i).

Since it is the plaintiff s burden to establish that the requirements of Rule 23 have been met and

36

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.

S 1024.41(c)(l)(i).

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.

S 1024.41(d).
C.

Accordingly, the Motion is denied as to such claims.
Rule 23(a)

The Nationwide Class and the Maryland Subclass are ascertainable and satisfy the Rule
23(a) factors. For purposes of ascertainability, the requirements of12 C.F .R.
and Md. Code Ann., Com. Law
application, while 12 C.F.R.

S

S 13- 316( c) are triggered

S 1024.41 (b)(2)(i)(B)

upon the submission of a loss mitigation

1024.41(c) and (d) impose obligations on a loan servicer once it

receives a "complete loss mitigation application" and once the completed application is denied.
Potentially eligible class members for all ofthese provisions can be identified through the LSAMS
and Remedy data that marks that an application was received, identified as complete, and denied.
See MCC JR0529-31.

Because such information is stored electronically and based on objective

criteria, the members of the class will be ascertainable without significant administrative burden.
See Krakauer v. Dish Network, L.L.C, 925 F.3d 643, 658 (4th Cir. 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. 2014))). Moreover,
the possibility that some members of the class as defined by the Robinsons have not suffered any
injury cognizable under RESP A or MCP A does not preclude certifying the class. See Torres v.

37

Mercer Canyons Inc., 835 F.3d 1125, 1137 (9th Cir. 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."); see also 1 William Rubenstein et aI., Newberg on
Class Actions ~ 2:3 (5th ed. 2011) ("[T]he possibility that a well-defined class will nonetheless
encompass some class members who have suffered no injury ... is generally unproblematic as the
non-injured parties can just be sorted out at the remedies phase of the suit."). 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.

And given that the class

includes all borrowers who have submitted an application since January 10,2014, joinder of all
members is eminently impractical.
The commonality requirement is also met. 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. As a result, the Robinsons' claim that Nationstar violated certain Regulation
X procedures with respect to their loan modification application and those of the class members.
While the date that Nationstar's

systems came into compliance. is unknown, Nationstar's

systematic noncompliance presents common questions of law and fact for all class members.
Moreover, whether Nationstar engaged in a "pattern or practice" of Regulation X violations, within
the meaning of 12 U.S.C. 2605(f), is common question oflaw and fact that Mr. Robinson and the
class members would all be required prove in their individual cases in order to qualify for statutory
damages. See Baby Nealfor and by Kanter v. Casey, 43 F.3d 48,56-57

(3d Cir. 1994) (noting

that a single common issue is sufficient to meet the commonality requirement).

That claim will

be subject to common proof, namely sampling and analysis of loan files along the lines suggested

38

by Oliver. 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). Indeed, Nationstar does not seriously contest the commonality
prong.
Since the Court has already concluded that Nationstar is entitled to summary judgment on
the Robinsons' claims under 12 C.F.R.

SS

S 1024.41(f),

(g), and (h), and Md. Code Ann., Com. 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.

See

McGraw, 646 F.2d at 176. Like the class members, to prove his case, Mr. Robinson will have to
show that Nationstar

failed to timely and appropriately

respond to his loan modification

applications by pointing to the dates of his submissions and the dates and contents of Nations tar's
responses. While the particulars of Mr. Robinson's application process will not necessarily prove
that Nationstar mishandled the applications of other individual class members, these facts fairly
encompass the types of claims that would be brought by the members of the class. See Broussard,
155 F.3d at 344. Although each class member must individually show that they suffered "actual
damages" under 12 U.S.C. 2605(f)(2), "Rule 23 contains no suggestion that the necessity for
individual

damage determinations

destroys

commonality,

typicality,

or predominance,

or

otherwise forecloses class certification." Gunnells, 348 F.3d at 427-28. Furthermore, Nationstar's
argument that the Robinsons are not typical largely recycles the same arguments made in the
Motion for Summary Judgment.

"[A]n evaluation of the merits to determine the strength of

plaintiffs' case is not part of a Rule 23 analysis." Gariety v. Grant Thornton, LLP, 368 F.3d 356,
366 (4th Cir. 2004). Since the Court already considered and ruled on these issues, see supra part
LB, it will not revisit those arguments here.

39

Finally, the Court finds that Mr. Robinson will adequately represent the absent class
members.

Mr. Robinson's counsel is experienced in complex civil litigation and class action

litigation.

Although Nationstar argues that Mr. Robinson has a conflict of interest because he

wishes to avoid foreclosure and to delay payments on his mortgage, the record does not reflect that
proposition. While Mr. Robinson sought to reduce his monthly mortgage payment in applying for
a loan modification, his deposition testimony reflects that he understands that the present lawsuit
contends that Nationstar did not process the Robinsons' loan modification application correctly.
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.
D.

Rule 23(b )(3)

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. A class action is a superior means
for "fairly and efficiently adjudicating" whether Nationstar has violated Regulation X and section
3-316(c) of the MCPA. Fed. R. Civ. P. 23(b)(3). The Robinsons assert, and Nationstar does not
argue otherwise, that litigation regarding Regulation X is not proceeding against Nationstar in
another forum. 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. 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. See Stillmockv. Weis Markets, Inc., 385 F. App'x 267, 275 (4th

40

Cir. 2010) (considering consistency of results that provide finality to the defendant as favoring a
finding of superiority).
Since the MCPA and Regulation X allow recovery only of "economic damages,", Md. Code
Ann., Com. Law

S

13-3l6(e)(1),

and "actual damages," 12 U.S.C.

S 2605(f),

caused by the

violation, which likely consist of administrative fees and costs, the individual recovery available
for each class member would likely be low, far below the cost of litigating the claims themselves.
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.

12 U.S.C.

S 2605(f)(1).

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. 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.").
Finally, the Court finds that common issues of law and fact predominate.

In focusing on

whether RESP A 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 ofRESPA violations, that issue common to almost
any individual claim plays an outsized role in the predominance analysis. First, to the extent that
there was a period of time during which Nationstar failed to implement procedures to comply with
RESP A, the facts establishing such a gap would be highly relevant to a pattern or practice
determination and would be common in every case. More importantly, while a determination of

41

an individual violation would not require extensive analysis, specific proof of a pattern or practice
of RESP A 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.

Where the

results of such an analysis would apply to any individual claim, it would be highly inefficient and
wasteful to require duplicative analysis in each such case. 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. Thus, the nature of the proof
of whether there has been a pattern or practice of RESP A violations provides substantial support
for a finding of predominance.
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
RESP A violations occurred. Although based on imperfect data, Oliver's expert report reveals that
such analysis can substantially address whether Nationstar violated 12 C.F.R

S

1024.41(b)(2)(B),

which requires that an acknowledgment

letter be sent within five days of receipt of a loan

S

1024.41(c)(l)(ii), which requires a servicer to respond to

modification application; or 12 C.F.R.

a completed loan modification application; or Md. Code Ann., Com. Law
requires a response to a loan modification application within 15 days.

S

13-316(c), which

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. See 12 C.F.R

S

1024.41 (b)(2)(B), (c)(l)(ii); Md. Code Ann., Com.

42

Law

S

13-316(c).

These events will be represented by discrete data points in Nationstar's

databases, such that these violations may be proved through that data.
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 HMP A,"
signifying "Financial Application Incomplete."

MCC JR 318, 530-531. 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.

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.
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.

This argument runs contrary to the plain language of Nationstar's

own procedures,

which describe the application as "complete" based on the processor's determination, leading to
the referral of the complete package to an underwriter. MCC JR 530. Moreover, Nationstar cites
no authority for the proposition that a loss mitigation application would not be deemed "complete"
for purposes of RESP A 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.

Thus, the Court concludes that common computerized

analysis can largely answer the question of whether Nationstar violated these RESPA provisions
with respect to individual borrowers.

43

At a minimum, the question of when a loss mitigation application is "complete" under
RESPA within the workflow of Nations tar-whether
the file as complete or at a later stage-is

at the time of the processor's designation of

a significant unresolved question of law and fact that

would be common to all RESPA claims against Nationstar.

Because such a common question

would have to be resolved in many if not all individual cases, it advances, rather than undermines,
the argument in favor of predominance.
Finally, where Nationstar has offered no specific argument in its brief, beyond those
addressed above, to refute Oliver's proffered analysis for identifying RESP A 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,
1024.41 (c)(l)(ii),

1024.4l(b)(1),

12 C.F.R. ~~

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. 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.
The fact that each borrower must individually show damages under 12 U.S.C. ~ 2605(t)(2)
is not fatal to the predominance inquiry. Gunnells, 348 F.3d at 429 ("(TJhe need for individualized
proof of damages alone will not defeat class certification.").

While every class member will have

to establish damages, that calculation will not be "particularly
identifying administrative

complex," as it will require

costs and fees that would not have occurred but for the RESP A

violation. Id. Furthermore, determining whether statutory damages are available will require no
individualized consideration, because the pattern-or-practice

44

claim "would be based solely on"

Nationstar's conduct and can be established through sampling. Id. While class members would
not be eligible for statutory damages unless actual damages are shown, see 12 U.S.C.

S 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 RESP A violations is a
distinction without a difference: whether individual damages are shown before or after the patternor-practice liability, the common issues of liability predominate over the individualized questions
of damages.
Therefore, the Court will grant in part and deny in part the Motion for Class Certification.
Certification will not be granted as to the claims under 12 C.F.R.
Md. Code Ann., Com. Law
to bring those claims.

SS

1024.41(c)(l)(i)

SS

S 1024.4l(f),

(g), and (h), and

13-301 and 13-303, because the Robinsons do not have standing

Certification will also be denied as to the claim under 12 C.F.R.

and (d), because the Robinsons

made no showing that the Rule 23

requirements were met. Because all of the Rule 23(a) and (b)(3) requirements are met as to a class
asserting violations of 12 C.F.R
Com. Law

S

S

1024.41(b)(1), (b)(2)(i)(B), and (c)(1)(ii) and Md. Code Ann.,

13- 316( c), the Court will grant class certification as to those class members and

claims.
CONCLUSION
For the foregoing reasons, Nationstar's Motion for Summary Judgment will be GRANTED
IN PART and DENIED IN PART. The Motion will be granted as to all of Tamara Robinson's
claims and as to Demetrius Robinson's claims under 12 C.F.R.
Code Ann., Com. Law
Strike will be DENIED.

S

S

1024.41(f), (g), and (h) and Md.

13-301 and 303. It will be otherwise denied. Nationstar's Motion to
The Robinsons' Motion for Class Certification will be GRANTED IN

PART and DENIED IN PART. Class certification will be granted, with Demetrius Robinson as

45

the named plaintiff, as to both the Nationwide Class and the Maryland Class for the claims under
12 C.F.R

9

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.

9 1024.41(c)(l)(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
requires reasonable

diligence in obtaining documents

mitigation application; and Md. Code Ann., Com. Law

9 1024.41(b)(l),

which

and information to complete a loss

9 13-316(c),

which requires a response to

a mortgage servicing complaint or inquiry within 15 days. The Motion will be otherwise denied.
A s~parate Order shall issue.

Date:

September 9,2019
THEODORE D. CHU
United States District Ju

46