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Smith v. Nationstar Mortgage, LLC

Citations: 225 F. Supp. 3d 549; 2016 U.S. Dist. LEXIS 188464; 2016 WL 8117701Docket: Civil Action No. 2:15-cv-888-RMG

Court: District Court, D. South Carolina; August 23, 2016; Federal District Court

Narrative Opinion Summary

In this case, a dispute arose from Nationstar Mortgage, LLC's handling of a loan modification process for the Plaintiff, who had purchased and renovated a home, subsequently defaulting on mortgage payments. Nationstar, having taken over the mortgage servicing, initiated foreclosure after the Plaintiff allegedly failed to meet modification conditions under the Home Affordable Modification Program (HAMP). The Plaintiff filed suit, claiming Nationstar did not properly acknowledge the completion of trial period plans. Nationstar's motion to seal an affidavit from a Fannie Mae employee was denied by the Court. The Court highlighted the presumption in favor of public access to judicial records and rejected Nationstar's confidentiality claims, explaining that most information in the affidavit was publicly available, apart from some non-sensitive loan details. The Court concluded that Nationstar did not demonstrate a significant interest to justify sealing, emphasizing the importance of transparency. The foreclosure proceedings were dismissed following a settlement between the Plaintiff and SunTrust, a former defendant, illustrating the complex interplay between mortgage servicing practices and borrower rights under modification programs.

Legal Issues Addressed

Confidentiality and Publicly Available Information

Application: The affidavit contained mostly publicly available information, with only the Plaintiff's loan records considered sensitive but not sufficient to justify sealing.

Reasoning: The affidavit primarily contains publicly available information, with the exception of records related to the Plaintiff's loans.

Loan Modification Agreements Under HAMP

Application: The Plaintiff's contention regarding Nationstar’s handling of the loan modification process under HAMP was integral to the case, but the affidavit did not present a compelling reason to be sealed.

Reasoning: The Court addressed whether the records support Nationstar’s motion to seal. The loan number is partially redacted to protect personal information.

Public Access to Judicial Records

Application: The Court emphasized the common law presumption favoring public access to judicial records, which Nationstar failed to overcome.

Reasoning: The Court, however, disagreed, emphasizing that there is a common law presumption favoring public access to judicial records.

Sealing Documents in Court Proceedings

Application: Nationstar's argument for sealing the affidavit based on confidentiality markings was rejected, as the Court required a compelling interest to justify sealing.

Reasoning: However, the Court rejected this notion, asserting that allowing documents to remain sealed based solely on confidentiality claims would undermine public access rights.