Pemberton v. Nationstar Mortgage, LLC
Pemberton Class Settlement
Case No. 3:14-cv-01024-BAS-MSB

Welcome to the Pemberton Class Settlement Website

If you had an Option ARM Loan serviced by Nationstar Mortgage LLC, your rights may be affected by a class action settlement.

What is this lawsuit about?

Plaintiffs claim that Nationstar did not report some borrowers’ negative amortization payments to the IRS on tax Form 1098 for tax years between 2010 and 2018. They further claim that by not reporting these payments, and by relying on the Form 1098 that Nationstar sent to them, they overpaid their taxes because they were not able to claim the full amount of their mortgage interest deduction.  More specifically, the Plaintiffs sued Nationstar for: (1) breach of contract; (2) breach of covenant of good faith and fair dealing; (3) violation of the unfair competition law; (4) fraud; (5) negligence; (6) negligent misrepresentation; and (7) violation of IRS codes.  In 2016, after the case was filed, Nationstar began attempting to identify loans on which Class Members’ payments of negative amortization were not captured by its automated system.  As a result of that process, in 2016 Nationstar began crediting and reporting additional payments of negative amortization to the IRS on the Forms 1098 that it issued to many Class Members.  Thus, if you had negative amortization as part of your loan balance and were making fully amortized monthly payments in 2016 and years thereafter, you may have noticed a substantial increase in the amount of interest that Nationstar reported to you in Box 1 on your Form 1098 for years 2016-2018 compared to the amount it had been reporting in 2015 and years prior.  As a result of this change in Nationstar’s process, you may by now have already had reported to you the full amount of mortgage interest that Plaintiffs’ original complaint sought to have Nationstar report to you.  Therefore, Nationstar may have corrected the problem for you that Plaintiffs sought to correct, and you may have already deducted the full amount of interest that Plaintiffs’ original complaint sought to allow you to deduct.  The purpose of this Settlement is to provide relief to those persons who did not get full relief from Nationstar’s 2016 change in Form 1098 reporting.

The Court has not decided who is right or whether Nationstar did anything wrong.  Instead, by agreeing to a Settlement, both Plaintiffs and Nationstar avoid the cost and risk of further litigation and a trial, and the people affected will get benefits. 

Additional information about the lawsuit and important court documents may be found on the Important Documents and FAQs pages of this website.

 

Who is Included?

The Settlement includes: "All persons who, according to Nationstar’s reasonably available computerized records, had or have Option ARM Loans serviced by Nationstar and made payments to Nationstar in any tax year from 2010 to 2018."

Your Legal Rights and Options

Option and Deadline
Event
Submit a Claim Form
December 30, 2019
Submit a Claim.  If the Claim Is Valid, You Receive An Amended Form 1098 and/or a payment of $50.
If you submit a claim with documentation showing that you paid more in taxes than was owed based on Nationstar’s reporting on Forms 1098 that did not include deferred interest for one or more tax years between 2010 and 2018, you may be eligible for two forms of relief.  If you paid more taxes in tax year 2016, 2017, or 2018, Nationstar will issue amended Forms 1098 that may allow you to amend your tax returns for each year and obtain a refund from the IRS.  If you paid more taxes in any year between 2010 and 2015, you will not receive an amended Form 1098 because it is too late to amend your tax return, but you will receive a payment of $50.
Ask to be Excluded
November 22, 2019
Get out of this lawsuit.  Get no relief.  Keep your rights.
If you exclude yourself (remove yourself from the Settlement), you will not be eligible to receive any relief under the Settlement.  However, you will keep the right to sue Nationstar in a separate lawsuit about the claims this Settlement resolves.
Object to the Settlement
December 30, 2019
Write to the Court.  Explain your Objection.  Remain in the Class.
If you do not like the terms of the Settlement, but do not want to be excluded, you can write to the Court and state the reasons why you don’t like the Settlement or a part of it.  The Court will review what you write and decide if the Settlement is fair.  If the Court approves the Settlement, you will still be part of the Settlement.  You will give up the right to start your own lawsuit, continue with a lawsuit or join a different lawsuit against Nationstar about the negative amortization payments you made prior to this Settlement.
Go to the Hearing
January 13, 2020
Ask to speak in Court about the fairness of the Settlement at the Fairness Hearing.
Do Nothing If you do nothing, you will be a Class Member bound by the terms of the Settlement Agreement and Final Judgment, thus forfeiting your right to sue on your own regarding any claims that are part of the Settlement.  However, your failure to timely submit a valid Claim Form will forfeit your right to recover any relief under the Settlement.
 
 
 

For More Information

Visit this website often to get the most up-to-date information.

Mail

Pemberton Class Settlement
c/o JND Legal Administration
P.O. Box 91050
Seattle, WA 98111