Outcome: Appellate Win
Robinson v. Nationstar Mortgage, LLC, Case No. 8:14−cv−03667−TJS in the United States District Court for the District of Maryland, Greenbelt Division
The Fourth Circuit’s opinion in Robinson v. Nationstar Mortgage LLC marks a significant victory for borrowers. It affirms the approval of a settlement between Nationstar, a mortgage servicer, and a class of borrowers. The district court’s decision, upheld by the Fourth Circuit, emphasizes the fairness, reasonableness, and adequacy of the settlement.
To understand the context, we must delve into the aftermath of the 2008 financial crisis. The crisis exposed the insufficient infrastructure of many mortgage servicers in handling a large influx of loss mitigation applications. These applications serve as a lifeline for homeowners who have fallen behind on their mortgages. In response, the Consumer Financial Protection Bureau (CFPB) amended the Real Estate Settlement Procedures Act (RESPA) in 2013. These amendments, effective from 2014, impose strict guidelines on servicers for processing loss mitigation applications and providing borrowers with necessary information. It is within this framework that the plaintiffs, Demetrius and Tamara Robinson, filed a lawsuit against Nationstar, alleging non-compliance with the CFPB regulations.
After years of prolonged litigation and court-supervised negotiations, the district court certified two classes in 2019 and finally approved the settlement in 2020. The settlement secures a substantial $3 million recovery for the class. While the settlement initially faced objections from one individual class member, claiming issues of jurisdiction, overbroadness of the agreement, inadequacy, excessive attorneys’ fees, and flaws in the notice, the objections were ultimately overruled. Noteworthy is the Fourth Circuit’s categorical rejection of all these arguments against the settlement.
As a result of the Fourth Circuit’s decision, the benefits of the settlement will soon be distributed among the class members, concluding an exhausting eight years of litigation.