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Abraham v. Ocwen Loan Servicing, LLC

United States District Court, E.D. Pennsylvania

June 26, 2017

LISA A. ABRAHAM, LISA CAVE, SCOTT CAVE, LEE ANN KAMINSKI, and MARK E. KAMINSKI, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
OCWEN LOAN SERVICING, LLC, Defendant.

          MEMORANDUM

          John R. Padova, J.

         TABLE OF CONTENTS

         I. INTRODUCTION ................................................................................................................... 3

         II. BACKGROUND ..................................................................................................................... 3

         III. THE CLASS CERTIFICATION RECORD ........................................................................ 5

         A. Background Regarding Ocwen's In-House Balloon Loan Modifications and its Documentation Systems ......... 5

         B. The Class Representatives ................................................................................................... 7

         1. Plaintiffs Lisa and Scott Cave .......................................................................................... 7

         2. Plaintiff Lisa A. Abraham .............................................................................................. 10

         3. Plaintiffs Lee Ann and Mark E. Kaminski (the “Kaminskis”) ....................................... 14

         C. Expert Evidence ................................................................................................................. 18

         1. Plaintiffs' Expert Dr. Brian C. Becker ........................................................................... 18

         2. Defendant's Expert Joseph J. Floyd ............................................................................... 24

         3. Dr. Becker's Reply to the Floyd Report ......................................................................... 30

         4. Floyd's Supplemental Report ......................................................................................... 33

         IV. OCWEN'S MOTION TO STRIKE ................................................................................... 36

         V. THE CLASS CERTIFICATION MOTION .......................................................................... 40

         A. Ocwen's Preliminary Issues on Loss and Damages .......................................................... 41

         1. Plaintiffs' Theory of Loss .............................................................................................. 41

         2. Becker's Model Cannot Be Common Evidence ............................................................ 47

         3. Becker's Theory of Harm is not Supported by the Record ............................................ 51

         B. Ocwen's Preliminary Issues on the Proposed Class Definitions ....................................... 59

         1. The Pennsylvania and New Jersey Classes are Overbroad ............................................ 59

         2. Time-barred Claims ........................................................................................................ 63

         3. The FDCPA Class Definition is Both Flawed and Overbroad ....................................... 65

         4. Entitlement to Injunctive Relief ..................................................................................... 71

         C. Cohesiveness of the NJCFA Class ..................................................................................... 80

         1. Issues Involving Ascertainable Loss and Damages ....................................................... 83

         2. Issues Involving the Crafting of Injunctive Relief ......................................................... 84

         3. Rescission is an Inherently Individualized Form of Relief ............................................ 85

         4. Disparate Factual Circumstances ................................................................................... 88

         D. Ascertainability of a Rule 23(b)(3) Class .......................................................................... 89

         E. Rule 23(a) Requirements ................................................................................................... 96

         1. Numerosity ..................................................................................................................... 96

         2. Commonality .................................................................................................................. 99

3. Typicality ..................................................................................................................... 101

         4. Adequacy ...................................................................................................................... 106

         F. Rule 23(b)(3) Predominance and Superiority Requirements ........................................... 107

         1. Ascertainable loss ......................................................................................................... 111

         2. Causation ...................................................................................................................... 113

         3. Reliance ........................................................................................................................ 119

         VII. CONCLUSION ................................................................................................................ 121

         I. INTRODUCTION

         Plaintiffs Lisa A. Abraham, Lisa and Scott Cave, and Lee Ann and Mark E. Kaminski filed this class action suit against Defendant Ocwen Loan Servicing, LLC (“Ocwen”) alleging Ocwen violated the Pennsylvania Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), 73 Pa. Stat. § 201-3, the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., and the New Jersey Consumer Fraud Act (“NJCFA”), N.J.S.A. § 56.8-1, et seq. They seek to represent classes of similarly situated Pennsylvania and New Jersey homeowners who have entered into a standard form in-house loan modification agreement with Ocwen that contained a “Balloon Disclosure” provision that allegedly did not disclose the amount of the balloon payment. Presently pending are Plaintiffs' motion to certify three classes, one class for each statutory claim. Also pending is a Motion by Ocwen to strike portions of Plaintiffs' expert report. For the following reasons, the Motion to Strike is denied. Additionally, after rigorous analysis of the expert submissions, the class certification record, and the arguments of the parties, the Motion for Class Certification is also denied.

         II. BACKGROUND

         Plaintiffs allege that Ocwen violated the UTPCPL, FDCPA and NJCFA by entering into standard form-written in-house loan modification agreements with class members that contain a uniform Balloon Disclosure provision that is unfair, deceptive, and misleading because it does not disclose: (1) the amount of the balloon payment that the borrower will owe at the end of the term of the loan; (2) the method by which such a balloon payment is calculated; and (3) the amortization term of the loan and whether it had been changed by the modification. Ocwen's Balloon Disclosure states only: “The loan modification for which you have applied contains a balloon provision. This means that even if you make all payments full and on time, the loan will not be paid in full by the final payment date.” (See Sept. 2, 2016 Declaration of Eric Lechtzin (“Lechtzin Decl.”) Ex. 4 at Ocwen001040). Plaintiffs assert that this language fails to disclose the information borrowers need to make informed financial decisions.

         Pursuant to Rule 23 of the Federal Rules of Civil Procedure, Plaintiffs move to certify[1] a Pennsylvania Class represented by Plaintiffs Lisa Abraham, Lisa Cave and Scott Cave consisting of:

All Pennsylvania homeowners whose mortgage loans have been serviced by Ocwen, and who have entered into a standard form template Loan Modification Agreement with Ocwen on or after February 14, 2007 that contains a “Balloon Disclosure” provision which does not disclose the amount of the balloon payment that the borrower will owe at the end of the term of the loan (the “Pennsylvania Class”).

         a New Jersey Class represented by Plaintiffs Lee Ann Kaminksi and Mark E. Kaminski consisting of:

All New Jersey homeowners whose mortgage loans have been serviced by Ocwen, and who have entered into a standard form template Loan Modification Agreement with Ocwen on or after February 25, 2009 that contains a “Balloon Disclosure” provision which does not disclose the amount of the balloon payment that the borrower will owe at the end of the term of the loan (the “New Jersey Class”).

         and a FDCPA Class represented by Plaintiffs Lisa Cave and Scott Cave consisting of:

All Pennsylvania and New Jersey homeowners for whom servicing of their mortgage loans was transferred to Ocwen at a time when such homeowners were in default on their loans, and to whom Ocwen sent a standard form template Loan Modification Agreement with Ocwen on or after July 21, 2010 that contains a “Balloon Disclosure” provision which does not disclose the amount of the balloon payment that the borrower will owe at the end of the term of the loan (the “FDCPA Class”).

         (Br. in Support of Pls.' Mot. for Class Cert. (“Pls.' Mem.”) (Docket Entry #56-1) at 2.) Plaintiffs seek certification of the Pennsylvania and New Jersey Classes under Rule 23(b)(2) in order to obtain injunctive relief pursuant to the UTPCPL and NJCFA. Plaintiffs also seek certification of all three Classes under Rule 23(b)(3) for their actual and statutory damages as provided by the UTPCPL, NJCFA and FDCPA.

         III. THE CLASS CERTIFICATION RECORD

         A. Background Regarding Ocwen's In-House Balloon Loan Modifications and its Documentation Systems

         The balloon modification agreements at issue in this case originate from Ocwen's “Loan Resolution Module” or “LRM” computer system. (Lechtzin Decl. Ex. 3, October 28, 2015 Deposition of Max Nieves (“Nieves Tr.”) at 31-32.) Ocwen inputs borrower data for its in-house loan modifications, including income data, into the LRM. (Nieves Tr. at 32; Lechtzin Decl. Ex. 10, October 2, 2015 Deposition of Rashad Blanchard (“Blanchard Tr.”) at 26.) The data in the LRM also includes information about the original loan, such as the principal amount of the loan, the interest rate, and the term of the loan. (Blanchard Tr. at 27, 69-71, 121-24.) The LRM also contains data or rules (such as restrictions on loan modifications) culled from the pooling and servicing agreements between Ocwen and the owners or investors in the loans. (Nieves Tr. at 46-50.) Ocwen uses the borrower and loan data in LRM to generate in-house loan modification agreements based upon blank modification agreement templates, which are identifiable by unique version numbers or codes. (See id. at 30, 38, 140-44.) Ocwen runs the loan and borrower data through a “resolution waterfall, ” which is an “algorithm within [the] LRM that tells [Ocwen] what the optimal resolution is . . . versus taking it to foreclosure. . . .” (Id. at 50-52.)

         In order to create a modification agreement that is sent to a borrower, Ocwen uses the LRM system which populates “merged fields” within the agreement template with data such as the borrower's name, the property address, the principal balance of the modified loan, the modified interest rate, the modification effective date, the first payment date, and the loan maturity date. (Id. at 36-37; Lechtzin Decl., Exs. 4-6, 22-25 (exemplars of templates).) Ocwen stores copies of all modification agreements that have been accepted by borrowers on Ocwen's Central Imaging System or “CIS.” (Nieves Tr. at 34.)

         Ocwen's main loan servicing platform is called “RealServicing.” (Blanchard Tr. at 45.) Certain information in the LRM is automatically saved in RealServicing. (Nieves Tr. at 35.) RealServicing also contains a comment log and spreadsheet data that includes loan transaction or payment histories, amortization tables and loan terms (e.g., interest rate, first payment date, maturity date, and amortization term). (Blanchard Tr. at 69, 72, 106-09.) Ocwen also records the identity of the investor in every loan serviced by Ocwen (i.e., the trusts that hold the loans) in RealServicing. (Id. at 96-98.)

         Prior to 2014, Ocwen's standard template Balloon Disclosure did not disclose the dollar amount of any balloon payment due at the loan's maturity date. (Nieves Tr. at 115-16, 147, 191-92.) Ocwen's training manuals from this time period stated: “The agreements will never indicate the balloon amount.” (Id. at 191, 197; Lechtzin Decl. Ex. 9 (Ocwen Loss Mitigation Manual at Ocwen010223.) Similarly, scripting tools utilized by Ocwen representatives instructed them to answer the question, “What is my balloon at maturity?” by answering: “We cannot provide a balloon amount which will be due at maturity as the remaining balance becomes the balloon amount.” (Nieves Tr. at 189; Lechtzin Decl. Ex. 8 (Ocwen CCC Best Practices CCC Resolutions Manual) at Ocwen011487; id. Ex. 9 (Ocwen Customer Care Center Loss Mitigation Manual) at Ocwen010223.) However, the same manuals also instruct representatives that, if an “estimated balloon payment” is reflected in the system for the borrower, the representative should “advise [the borrower] of the same, as long as you disclose it is only an estimate [and] [t]he balloon amount depends on how the customer makes the payments.” (Id.) Ocwen ceased using the balloon modification templates at issue in this case in late 2013 or early 2014. (Nieves Tr. at 40-42, 62-65.) Since that time, all Ocwen balloon disclosures state a minimum dollar amount for the balloon payment due at the maturity of the loan. (Id. at 42, 64-65, 66-72 (identifying blank balloon modification templates).)

         B. The Class Representatives

         1. Plaintiffs Lisa and Scott Cave

         Lisa and Scott Cave (“the Caves”), who seek to represent both the Pennsylvania and FDCPA Classes, are owners of a home located at 491 North Mill Road, Kennett Square, Pennsylvania, which they purchased in December 2003 for $175, 000. (Lechtzin Decl. Ex. 26, June 24, 2014 Deposition of Scott Cave (“S. Cave Tr.”) at 49, 83.) On November 23, 2005, the Caves refinanced their home with a 30-year mortgage loan from Saxon Mortgage, Inc. in the amount of $236, 300, which they were required to repay at an annual interest rate of 8.650 percent. (Lechtzin Decl. Ex. 28, November 23, 2005 Note; Ex. 29 November 23, 2005 Mortgage.) Under the terms of this loan, the Caves' monthly payment of principal and interest was $1, 842.12. (Id.)

         In August 2009, after falling behind on their mortgage payments, the Caves applied to Saxon for a loan modification under the Home Affordable Mortgage Program (“HAMP”). (S. Cave Tr. at 429-31.) By letter dated April 21, 2011, Saxon advised the Caves that the servicing of their mortgage was being transferred to Ocwen, effective May 16, 2011. (Lechtzin Decl. Ex. 30.) At the time Ocwen assumed servicing of the Caves' loan in May 2011, the Caves were in default on their loan. (Joint Submission of Material Facts (Docket Entry # 78) ¶ 15.) Specifically, the Caves' loan was “due for November 2009, ” according to an Ocwen Rule 30(b)(6) witness. (Lechtzin Decl. at Ex. 19, December 20, 2013 Deposition of Paul Myers (“Myers Tr.”) at 43; Ex. 21, Ocwen Letter of May 19, 2011.) In June 2011, Ocwen sent the Caves a HAMP solicitation letter, and on June 23, 2011, Ocwen received the Caves' HAMP document package. (Myers Tr. at 53-55.) Ocwen reviewed the Caves for a HAMP modification and sent them a written notice of denial on June 25, 2011. (Id. at 56.)

         Also in June 2011, Ocwen sent the Caves an in-house loan modification agreement with the Balloon Disclosure provision at issue here. (Id. at 58.) Under the terms of the proposed Cave Modification Agreement, the principal balance increased from $236, 300 to $278, 203, the interest rate for the first 60 months was 2 percent, and the rate increased to 4.5 percent for the remaining term of the loan. (Id. at 72-73; Nieves Tr. at 123-24; Ex. 20, June 28, 2011 Loan Modification Agreement (“Cave Modification Agreement”).) Under the proposed Cave Modification Agreement, the monthly principal and interest payment for the first 60 months is $1, 000.02. (Myers Tr. at 76.) The Cave Modification Agreement includes a “Balloon Disclosure” that is substantially similar to the modification agreements entered into by all other Pennsylvania Class members, which provides:

The loan modification for which you have applied contains a balloon provision. This means that even if you make all payments full and on time, the loan will not be paid in full by the final payment date. A single balloon payment will be due and payable in full on 12/1/35, provided that all payments are made in accordance with the loan terms, and the interest rate does not change for the entire loan term.

         (Lechtzin Decl. Ex. 20.) Ocwen's 30(b)(6) witness Paul Myers testified that all of Ocwen's loan modification agreements had disclosures similar to those made in the Cave Modification Agreement, which did not state the amount of the balloon payment. (Myers Tr. at 100-04.)

         Before the Caves accepted the Cave Modification Agreement, Lisa Cave called Ocwen to inquire about the amount of the balloon, but, she testified, “[t]hey weren't able to give me an amount.” (Lechtzin Decl. Ex. 32 June 23, 2014 Deposition of Lisa Cave (“L. Cave Tr.”) vol. I at 302.) The Caves accepted Ocwen's offer by executing the Cave Modification Agreement and returning the signed agreement to Ocwen along with the requested initial payment of $1, 285.39, which Ocwen accepted and retained. (Id. at 302-03.) Under the Cave Modification Agreement, Ocwen extended the amortization term from 360 months to 374 months, commencing on September 1, 2011, the first payment date of the modification. (Myers Tr. at 86; Cave Modification Agreement; Nieves Tr. at 121-22.) Ocwen admits that the Cave Modification Agreement does not disclose this change in the amortization term from 360 months to 374 months. (Nieves Tr. at 124.) Ocwen did not provide the Caves with an amortization schedule that would have revealed this change in the amortization term of the Caves' loan. (Myers Tr. at 78.) The Cave Modification Agreement provides that “[a]ll covenants, agreements, stipulations, and conditions in your Note and Mortgage will remain in full force and effect, except as herein modified. . . .” (Cave Modification Agreement ¶ 8(b).) Plaintiffs allege that this provision of the Cave Modification Agreement was misleading and deceptive in light of Ocwen's failure to disclose the change to the amortization period of the Caves' loan. (Pl. Mem. at 9.)

         Ocwen admits that the Cave Modification Agreement does not state the amount of the balloon payment due at the maturity of their loan. (Myers Tr. at 75; Nieves Tr. at 124.) However, at the time the Caves accepted the Cave Modification Agreement, Ocwen knew that the Caves would be required to make a balloon payment in the amount of $93, 524.46 at the loan's maturity date if they made all of their scheduled payments in full and on time. (Myers Tr. at 75, 80-81.) Ocwen admits that the Cave Modification Agreement does not include instructions as to how the Caves could have calculated the amount of the balloon they will owe at their loan's maturity date. (Nieves Tr. at 127.) However, Ocwen 30(b)(6) witness Myers explained in general terms the steps that one would need to perform to calculate the amount of the balloon, stating:

You determine the amortization portion. I believe in this case we can certainly look at the comments. I can tell you what it was amortized over. It was amortized over 374 months. You take the principal balance, the 278, 000 number, you amortize that. You initially do the amortization schedule over 374 months. You take a look after month 60, what's the principal balance. Then turn around and do a second one starting payment 61 through 374 and that would give you the amortization over the balance.

         (Myers Tr. at 86.) Ocwen 30(b)(6) witness Nieves provided a similar explanation about how to calculate the amount of the balloon. (Nieves Tr. at 124-127.)

         Scott Cave testified that “if I would have been told up front that it [the balloon] was $90, 000 I would have walked away.” (S. Cave Tr. at 70, 218-19.) Lisa Cave testified that because the balloon amount was not disclosed, “I wasn't given the opportunity to plan properly financially. According to the information I have now, if I were to have paid the entire mortgage and then had to pay the balloon payment, I would have had to take out another loan somewhere in my 60s.” (L. Cave Tr. vol. II at 323.)

         2. Plaintiff Lisa A. Abraham

         Lisa Abraham, who seeks to represent the Pennsylvania and the FDCPA Classes, is the owner of a home located at 31 Clay Valley Road, Fleetwood, Pennsylvania, which has been her primary residence since 1992. (Lechtzin Decl. Ex. 14, June 18, 2007 Abraham Note; Lechtzin Decl. Ex. 34, August 28, 2015 Deposition of Lisa A. Abraham (“Abraham Tr.”) at 43, 59-60.) On June 18, 2007, Abraham refinanced her home with a 30-year Fixed Rate Stepped Payment Note in the amount of $263, 500, with a maturity date of July 1, 2037. (Abraham Tr. at 148-54; Ex. 14.) Under the terms of the loan, Abraham was to pay interest only at a rate of 8.590 percent for the first 120 months. (Blanchard Tr. at 182-84.) The initial monthly payment under this loan was $1, 949.76, however after the first 120 months, the monthly payment would increase to $2, 196.79. (Abraham Tr. at 154-55; Ex. 14.) There was no balloon payment provision under this loan. (Blanchard Tr. at 210.)

         In August 2010, Ms. Abraham was going through a divorce and fell behind on her loan payments. (Abraham Tr. at 170-73.) In order to bring her loan current and resolve pending litigation, she entered into a Settlement and Release Agreement with Ocwen, which modified the terms of her loan. (Id. at 180-88; Lechtzin Decl. Ex. 18, June 2, 2010 Ocwen/Abraham Settlement and Release Agreement (“Release”).) Under the terms of this agreement, Ocwen increased the principal amount of her loan to $322, 838.81, the interest rate was fixed at 6.4 percent, and her new monthly principal and interest payment increased to $1, 867.13. (Release ¶¶ 1b-d.) Unlike the modification agreements at issue in this case, Abraham's Release expressly stated the amortization term applicable to her modified loan: “this balloon modification is amortized as if the repayment period was 480 months. . . .” (Id. ¶ 1e; Abraham Tr. at 205.)

         In February 2011, Ms. Abraham suffered a stroke and again fell behind on her monthly loan payments.[2] (Abraham Tr. at 210-12.) By letter dated November 23, 2012, Ocwen offered Abraham a new Loan Modification Agreement that: (1) reduced the principal balance of her loan to $236, 040.80; (2) forgave approximately $91, 000.00 of her total outstanding debt; (3) reduced her monthly principal and interest from $1, 867.13 to $714.79; (4) lowered her total monthly payment, including escrow items, from $2, 535.16 to $1, 319.75; and (5) lowered the interest rate from 6.4% to 2.0%. (Lechtzin Decl. Ex. 15, November 23, 2012 Proposed Modification Agreement (“Proposed Modification Agreement”); Blanchard Tr. at 184-85, 196-99.) The Agreement changed the amortization period of the loan to 480 months from 360 months. (Blanchard Tr. 229-31.)

         The Proposed Modification Agreement is based upon a standard template document, which can be identified by its version number, and which Ocwen has used to modify mortgages on properties located in Pennsylvania. (Nieves Tr. at 60-61.) The “Balloon Disclosure” provision in the Abraham Modification Agreement provides:

The loan modification for which you have applied contains a balloon provision. This means that even if you make all payments full and on time, the loan will not be paid in full by the final payment date. A single balloon payment will be due and payable in full on 7/1/37, provided that all payments are made in accordance with the loan terms, and the interest rate does not change for the entire loan term.

(Proposed Modification Agreement.) Ms. Abraham accepted Ocwen's offer by executing the Proposed Modification Agreement and returning it to Ocwen. (Blanchard Tr. at 186-87; Lechtzin Decl. Ex. 16, executed Abraham Modification Agreement.) At the time Abraham signed the Modification Agreement, she did not know the amount of the balloon payment she would owe at the loan's maturity. (Abraham Tr. at 248-49.)

         Ocwen admits that the Abraham Modification Agreement does not state the amount of the balloon payment due at the maturity of her loan. (Blanchard Tr. at 210-11; Lechtzin Decl. Ex. 17, Ocwen Response to Request for Admission (“Ocwen Abraham Admission”) No. 12.) Ocwen also admits that it had determined that the estimated balloon payment amount was projected to be $114, 236.82 at the time of the loan's maturity date, provided Abraham made all scheduled monthly payments due under the Abraham Modification Agreement. (Blanchard Tr. at 212; Ocwen Abraham Admission No. 14.) According to Ocwen's records of a phone call with Ms. Abraham on February 11, 2014, an Ocwen representative informed her orally that her balloon amount is at least $114, 236.82. (Blanchard Tr. at 190-92, 212.) Abraham recalls that when she asked the representative about the amount of the balloon, he said: “I'm not real sure. This is not set in stone.” (Abraham Tr. at 248-49, 298-99.)

         Ocwen admits that that the Abraham Modification Agreement did not include an amortization schedule. (Ocwen Abraham Admission No. 7.) Ocwen further admits that “neither the ‘Balloon Disclosure' term set forth at Paragraph 5 on Page 2 of the Abraham Modification Agreement, nor the Balloon Disclosure set forth at Page 4 of the Abraham Modification Agreement, states the method by which the balloon payment that would be due at the loan's maturity date of July 1, 2037 will be calculated.” (Ocwen Abraham Admission No. 13; Nieves Tr. at 88.) Moreover, “Ocwen admits that neither the Abraham Modification Agreement . . . nor the cover letter, dated November 23, 2012, enclosing the Abraham Modification Agreement, provided express instructions as to how Abraham could calculate the amount of the estimated minimum balloon payment due and payable on July 1, 2037.” (Ocwen Abraham Admission No. 16.)

         Abraham admits that the loan modification lowered her monthly payments and made her life “more comfortable, ” but believes she would not have lost her home if she did not enter into this agreement “[b]ecause I had been paying my loan prior to the 2012 modification.” (Abraham Tr. at 322.) She testified that if the amount of the balloon payment had been disclosed in the modification agreement, she would not have agreed to it, because she will be age 77 when the balloon comes due and she would need to take out a new mortgage to pay that amount. (Id. at 350-51 (“That wouldn't work. It's not going to work. No one is going to give a 77-year-old woman, with rheumatoid arthritis, on disability, even a $100, 000 mortgage at that age. It's impossibility.”).) After Ms. Abraham filed the instant lawsuit, Ocwen stopped sending her monthly mortgage statements and it no longer allows her to view her loan information on its website. (Blanchard Tr. at 176-77; Abraham Tr. at 301.)

         3. Plaintiffs Lee Ann and Mark E. Kaminski (the “Kaminskis”)

         The Kaminskis, who seek to represent the New Jersey Class, are owners of a home located at 10 E. Maple Tree Drive, Westampton, New Jersey, which has been their family's primary residence since May 2000. (Lechtzin Decl. Ex. 36, September 10, 2015 Deposition of Lee Ann Kaminski (“L. Kaminski Tr.”) at 15, 28-29.) The Kaminskis purchased their home for $267, 000, of which $135, 000 was financed with a mortgage. (Id. at 31-32.) In order to consolidate various debts, on February 24, 2006, the Kaminskis refinanced their home with a 30-year, fixed rate mortgage in the amount of $344, 250, and a maturity date of March 1, 2036. (Id. at 44-46; Lechtzin Decl. Ex. 11, February 24, 2006 Kaminski Mortgage at Ocwen005086-5102.) This loan was amortized over a term of 360 months. (Nieves Tr. at 56-57.) Under the terms of this loan, the monthly payment was $2, 772.58 for the first 120 months, and thereafter the amount would increase to $3, 076.64. (L. Kaminski Tr. at 51.)

         The Kaminskis fell behind on their loan in 2007, when Mrs. Kaminski's job as a long-term substitute teacher came to an end, and Mr. Kaminski lost his job. (Id. at 56-57.) In May 2007, the Kaminskis entered into a forbearance agreement with Ocwen, which called for them to make increased monthly payments of $3, 456 for twelve months so they could cure their delinquency. (Id. at 60-63.) Although Mr. Kaminski found new employment, the Kaminskis were unable to make all of the forbearance payments. (Id. at 64-65.) They entered into a second forbearance agreement in January 2008, which contained a “Modification Contingency” that increased the principal balance of their loan to $367, 716.11, and had a fixed interest rate of 8.63 percent. (Id. at 66-70.) To receive this modification, Ocwen required the Kaminskis to pay a reinstatement amount of $27, 565.33, and to make a down payment of $6, 902.24. (Id. at 71-72.) In June 2009, the Kaminskis entered into a new loan modification agreement that increased their principal balance to $387, 168.50, and provided an initial monthly payment of $2, 237.12. (Lechtzin Decl. Ex. 37, June 2009 Home Affordable Modification Agreement effective July 1, 2009.)

         By letter dated March 9, 2011, Ocwen offered the Kaminskis a “STREAMLINED LOAN MODIFICATION, ” which provided a monthly payment of $1, 979.95, including escrow items such as property taxes. (Lechtzin Decl. Ex. 12, March 9, 2011 Letter enclosing draft Loan Modification Agreement (“Kaminski Loan Modification Agreement”) at Ocwen006480-6483.) The Loan Modification Agreement enclosed with this letter stated that, if the Kaminskis accepted Ocwen's offer, the interest rate of their loan would be modified to 2 percent, the new principal balance would be $377, 555.05 (as compared to the original principal amount of $344, 250), and their new monthly principal and interest payment would be $1, 143.32. (Id.; Blanchard Tr. at 66-67, 101.) The Kaminski Loan Modification Agreement did not provide any principal forgiveness. (Blanchard Tr. at 92.)

         Ocwen 30(b)(6) witness Nieves testified that the Kaminski Loan Modification Agreement is based on a standard template document that Ocwen has used to modify mortgages on properties located in New Jersey. (Nieves Tr. at 25-29, 59-60; Lechtzin Decl. Ex. 1, December 21, 2015 Class Certification Report of Brian C. Becker (“Becker Report”) ¶¶ 36, 38.) The Kaminski Loan Modification Agreement contains a “Balloon Disclosure” provision that provides:

The loan modification for which you have applied contains a balloon provision. This means that even if you make all payments full and on time, the loan will not be paid in full by the final payment date. A single balloon payment will be due and payable in full on 9/1/2036, provided that all payments are made in accordance with the loan terms, and the interest rate does not change for the entire loan term.

(Kaminski Loan Modification Agreement at Ocwen006483.) Although the Kaminskis' loan was originally amortized over a period of 360 months, under the Kaminski Loan Modification Agreement the loan is amortized as though it is payable over a period of 480 months. (Blanchard Tr. at 104-06.) This change in the amortization term is not disclosed in the Kaminski Loan Modification Agreement. (Id. at 115-17.) The Kaminski Loan Modification Agreement provides that “[a]ll covenants, agreements, stipulations, and conditions in your Note and Mortgage will remain in full force and effect, except as herein modified. . . .” (Loan Modification Agreement at Ocwen006481.)

         Ocwen's March 9, 2011 letter to the Kaminskis was a “blind modification offer, ” meaning that Ocwen solicited the Kaminskis for a modification rather than the Kaminskis applying to Ocwen for a modification. (Blanchard Tr. at 43-44, 46; Nieves Tr. At 31.) According to Ocwen's records of a phone call with Mrs. Kaminski, as of March 21, 2011, the Kaminskis had not received the modification offer, even though the March 9 letter stated that they needed to respond to the offer by March 23. (Blanchard Tr. at 158-60.) Ocwen then sent the offer via email. Although the Kaminskis had only two days to consider the offer, if they had stated that they needed more time, Ocwen representatives had the authority to extend the offer. (Id.) The Kaminskis accepted Ocwen's offer by signing the Kaminski Modification Agreement on March 24, 2011, and returning it to Ocwen. (Blanchard Tr. at 48; Lechtzin Decl. Ex. 13, executed Kaminski Loan Modification Agreement Ocwen005127-5129.)

         Under the terms of the Kaminski Loan Modification Agreement, if they made all of their scheduled payments in full and on time, they would owe a balloon payment of $173, 421.59 at the loan's maturity date of September 1, 2036. (Blanchard Tr. 129-31.) Mrs. Kaminski testified that she did not know the amount of the balloon payment before she signed the Kaminski Loan Modification Agreement and that, if she had known the amount of the balloon payment, she would not have signed it. (L. Kaminski Tr. at 117-20; 149.) Mr. Kaminski testified that he did not ask Ocwen about the balloon disclosure before signing the Agreement, and that he “would not know how -- what formula to use, how to amortize. I'm not the financial expert. I would not know how to arrive at a dollar value based on my situation.” (Lechtzin Decl. Ex. 38, September 10, 2015 Deposition of Mark E. Kaminski (“M. Kaminski Tr.”) at 80-81.) He also testified,

I realize that a balloon payment, the amount could be less or more depending on us making our payments on time through the course of the loan. It was tacked on, it's tacked on to the back end of the loan which is due [and] payable in 2036. And I don't know how they derive the number based on our situation, so I have no other recourse.

(Id. at 81.) Both Plaintiffs expressed concerned that they will be unable to make the balloon payment when it comes due. (L. Kaminski Tr. at 150; M. Kaminski Tr. at 94.)

         Ocwen admits that the Kaminski Loan Modification Agreement “did not include an amortization schedule.” (Lechtzin Decl. Ex. 39, Ocwen Response to Request for Admission (“Ocwen Kaminski Admission”) No. 7.) Ocwen also admits that the Balloon Disclosure “does not state the dollar amount of any balloon payment that would be due on September 1, 2036, under the terms of the Kaminski Modification Agreement.” (Id. No. 11; Blanchard Tr. at 119; Nieves Tr. at 86.) Ocwen further admits that the Balloon Disclosure “does not state the method by which the balloon payment that would be due at the loan's maturity date of September l, 2036 will be calculated.” (Ocwen Kaminski Admission No. 12; Blanchard Tr. at 155.) Moreover, Ocwen's “cover letter dated March 9, 2011, enclosing the Kaminski Modification Agreement, did not provide express instructions as to how the Kaminskis could calculate the amount of the estimated minimum balloon payment due and payable on September 1, 2036.” (Ocwen Kaminski Admission No. 15.) Nor did the Modification Agreement itself “provide express instructions as to how the Kaminskis could calculate the amount of the estimated minimum balloon payment due and payable on September 1, 2036.” (Id. No. 16.) Ocwen admits “that on or around the time the Kaminski Modification Agreement . . . was sent to the Kaminskis, Ocwen was able to calculate the estimated minimum balloon payment amount at the time of the loan's maturity date, if the Kaminskis made all scheduled monthly payments due under the Kaminski Modification Agreement in full and on time.” (Id. No. 13.)

         After the Kaminskis filed the instant lawsuit, Ocwen stopped sending them monthly statements for their mortgage and no longer allows them to view information concerning their loan on Ocwen's website. (Blanchard Tr. at 174-76.) Mrs. Kaminski testified that she cannot access her account online or make payments online, but must send her payments to Ocwen via certified mail. (L. Kaminski Tr. at 143.)

         C. Expert Evidence

         1. Plaintiffs' Expert Dr. Brian C. Becker

         Plaintiffs have retained Dr. Brian C. Becker to “evaluate whether (a) members of the proposed class shared common experiences as a result of policies and practices that [Ocwen] applied uniformly, which caused the same types of damage to all members of the proposed class, and whether (b) such putative members of the proposed class can be readily identified using data maintained by Ocwen.” (Becker Report ¶ 1.[3]) He concludes that that putative Class members can be identified using common methods applied to Ocwen's electronic records, that Ocwen's electronic records can be queried to extract the borrowers whose loan modification processes meet the Class definition, and that damages can be calculated for each Class member using common methods applied to Ocwen's electronic records. (Id. ¶¶ 4, 10-12.)

         Dr. Becker's method for identifying class members relies upon searchable electronic data maintained by Ocwen that can be exported, sorted, and analyzed. (Id. ¶ 18.) Specifically, he relies on (1) Ocwen's RealServicing system, which includes borrower and loan information, payment history, comments and the amount and due date of each borrower's balloon payment; (2) Ocwen's LRM, which is Ocwen's decision engine used to determine a loan's eligibility for a modification or alternative loan resolutions such as a short sale or deed in lieu of foreclosure; and (3) Ocwen's CIS, which is another database maintained by Ocwen that stores images of certain letters and documents sent to and received back from borrowers, and retains information on prior servicers, payment history, customer communications, the mortgage document, the note document, and modification documents (including actual copies of the modification agreements sent to and received from borrowers). (Id. ¶¶ 21-23.) Finally, Dr. Becker asserts that RealDoc, another database maintained by Ocwen, stores the templates of modification agreements sent to and received back from borrowers. (Id. ¶ 24.[4])

         Dr. Becker opines that Ocwen's own analysis of its loan-level data on its loan modifications provides evidence that methods exist which can be commonly applied on a class-wide basis to identify Class members. (Id. ¶ 26.) He notes that Ocwen's data analyst, Paul Britton, produced a table in which he presented the results of queries of Ocwen's internal loan-level data, including data contained within RealServicing, to identify modified loans that met each of the following aspects of the Class definition: (1) borrowers in Pennsylvania or New Jersey, and (2) borrowers Ocwen placed into non-HAMP modification agreements with balloon payment features between January 1, 2009 and September 30, 2015. (Id.) Britton's query identified 11, 157 non-HAMP modifications in Pennsylvania between January 2009 and September 2015 that had a balloon payment feature, and identified 8, 454 non-HAMP modifications in New Jersey between January 2009 and September 2015 that had a balloon payment feature. (Id.) Becker opines that he can identify class members by further refining Britton's query by: (1) identifying those borrowers located in a state included in the Class definition with a modification featuring a balloon payment, and (2) then identifying those borrowers who did not receive a disclosure of the amount of the balloon payment in their modification agreement. (Id. ¶¶ 28-30.) He asserts that, based on the documents produced and deposition testimony in the case, “it is likely that all of Ocwen's standard in-house modification agreements with balloon payments made until late 2013 in Pennsylvania and New Jersey would meet the Class definition.”[5] (Id. ¶ 31.) Becker states that this same data can be used on a class-wide basis to establish whether or not there is a violation of state and federal consumer protection laws under Plaintiffs' theories, and that the named Plaintiffs are members of the class. (Id. ¶¶ 34-35.)

         On the issue of damages, Dr. Becker opines that Ocwen's records contain information on each putative Class member's payment terms, including unpaid principal balance, monthly payment amount, interest rate, and the remaining term of the loan that would be sufficient to generate an appropriate formula to measure the damages applicable to Plaintiffs' claims. (Id. ¶ 39.) To calculate damages, he first assumes “that Class members' expectation of the balloon payment and monthly payments would have been the balloon payment and monthly payments that would have occurred had the modified loan been amortized over the previously disclosed amortization term.”[6] (Id. ¶ 40.) He asserts that damages through the earlier of (1) the date on which the last payment on the loan was made, or (2) the date when damages are awarded, can be defined as “the present value difference to each Class member from his position with the modification in its actual state and the but-for modification with the same terms except with an amortization schedule corresponding to the last disclosed amortization term prior to the modification with the undisclosed balloon amount.”[7] (Id. ¶ 41 (emphasis in original).) He calculates that, while Lisa Abraham suffered no damages - because the amortization term in her modification agreement did not change from the last disclosed amortization term - the Caves suffered damages of $6, 173.15 and the Kaminskis suffered damages of $30, 240.12.[8] (Id. ¶¶ 44-45.)

         Dr. Becker opines that, all things being equal, a loan amortized over a longer term will have a lower monthly payment than a loan amortized over a shorter term. That lower monthly payment, however, results in the loan principal being paid off at a slower rate than would occur if a larger monthly payment were made. Because the principal balance is paid off more slowly over the longer amortization term,

the interest being charged each month is larger than what would be charged if the principal balance were paid off faster, as would occur if the loan payments were calculated over a shorter amortization term. Therefore, more interest will be paid over the life of a loan if payments are made according to a longer amortization term than would be paid if payments are made according to a shorter amortization term.

(Id. ¶ 46.) Further, because the principal is paid off more slowly when payments are made according to an amortization schedule with a longer term, “a larger balloon payment is required at the loan maturity than would be required if payments were made according to an amortization schedule with a shorter term.” (Id. ¶ 47.) Becker calculates that the Caves' balloon payment under the but-for amortization schedule would be $13, 558.37 less than the balloon payment recorded in Ocwen's RealServicing system; for the Kaminskis, the balloon payment under the but-for amortization schedule would be $130, 390.67 less than the balloon payment recorded in Ocwen's RealServicing system; Abraham's balloon payment would be the same since her amortization term did not change. (Id. ¶ 48.)

         Dr. Becker recognizes, however, that “for many Class members, damages will be awarded before loan maturity. For those Class members, neither the difference between actual and but-for balloon payments nor the difference between actual and but-for principal and interest payments through maturity would be the measure of damages.” (Id. ¶ 50.) He has developed an equation to capture the measure of damages that can be used for borrowers who paid either the exact amount of their required monthly modified payments, who paid more than their required monthly modified payments, or who paid fewer required monthly modified payments. He opines that, for each scenario, his equation

represents the amount that would place the borrower in the financial position the borrower would have been in at the date on which damages are awarded if a modification had occurred using the previously disclosed amortization term by compensating the borrower for differences between the values of the actual balances and what the balances would have been if a modification had been implemented with regard to the outstanding principle balance and any accrued interest. To this difference in principal balance in Equation [1], one adds the difference between the actual principal and interest payments and what the principal and interest payments would have been if a modification had been implemented using the previously disclosed amortization term. Thus, Equation [1] compensates Class members by calculating the but-for impact of Ocwen's failure to implement modifications using the previously disclosed amortization term on both the Class members' financial “stocks” and “flows” - the stocks being the principle balance and the flows being the Class members' monthly payments.

(Id. ¶ 52.) Under this equation, as of October 2015, he calculates damages for Abraham to be $0.00, for the Caves to be $50.36, and for the Kaminskis to be $3.58. (Id. ¶¶ 52-55.)

         2. Defendant's Expert Joseph J. Floyd

         Ocwen has retained Joseph J. Floyd to evaluate the proper method of identifying whether the named Plaintiffs and putative class members suffered ascertainable financial losses, as well as to review and comment on the Becker Report. (Forbes Decl. Ex. A, January 27, 2016 Expert Report of Joseph J. Floyd (“Floyd Report”) at 3.[9]) Like Dr. Becker, Floyd opines that the most appropriate method to evaluate whether a borrower incurred financial damages due to the receipt of a loan modification agreement is a “but-for” analysis. (Id. at 4, 16.) In applying his approach, Floyd assumes that borrowers could not remain current on their pre-modification loan terms and, therefore, would face imminent foreclosure without the loan modification since, if the borrower was not having problems, it is unlikely that a modification would have been offered. (Id.) Accordingly to Floyd, following their receipt and acceptance of loan modification agreements, Plaintiffs benefited from comparatively lower monthly payments and lower interest rates; continued to benefit from the home's appreciation; avoided the adverse consequences of foreclosure and loss of their home; and avoided the adverse consequences of potential bankruptcy filings. (Id. at 5.) He asserts that “[e]ach of these factors is financially favorable to the Plaintiffs and appears contrary to the existence of any possible financial harm or damage that may have arisen from the provision of the loan modification agreements by Ocwen.” (Id.)

         On the issue of damages, Floyd posits that Dr. Becker's analyses and calculations are

based on a flawed premise that the alleged failure to disclose the estimated amount of the loan modification balloon payment due at the loan maturity date and the loan amortization term caused the Plaintiffs to suffer financial damages. In my opinion, A) the loan amortization term only impacted the calculation of the monthly payment; an amount agreed to by the Plaintiffs and B) the Plaintiffs had access to all of the information needed to determine their balloon payment at any point in time. Therefore, the alleged failure to disclose the amount of the loan modification balloon payment and the loan amortization term would not cause the Plaintiffs to suffer ascertainable loss or financial damages.

(Id.) He adds that Dr. Becker's analyses and conclusions regarding the Plaintiffs' alleged damages are based on a flawed and incomplete comparison because Becker

invents a new loan product - one with no apparent basis in the evidence - and calculates damages based solely on that hypothetical loan. Therefore, Dr. Becker's report not only ignores the benefits of the loan modifications actually received by the Plaintiffs, it also attempts to calculate damages based on fictional loan terms.

(Id.) Floyd, on the contrary, attempts to compare what he opines is “the relevant data - the Plaintiff's financial events and consequences without the modification (such as foreclosure or becoming current with the pre-modification loan terms) as compared with the modification terms” which, he concludes, “indicates that none of the Plaintiffs suffered any ascertainable loss, actual harm, or financial damages.” (Id.) Finally, Floyd asserts that because each Plaintiffs' financial and economic situations are unique and would require individual considerations to properly evaluate the existence of each member's possible financial damages, if any, the inquiry necessary to determine the existence of financial damages and then perform the calculation of such damages, if any, are individualized and not capable of proof through evidence that is common to the class. (Id.)

         According to Floyd, “the most appropriate method to evaluate whether a borrower incurred financial damages due to the receipt of a balloon loan modification is the ‘but-for' analysis which considers the borrower's financial events and consequences without the modification (such as foreclosure or becoming current with the pre-modification loan terms) as compared with the modification terms.” (Id. at 16.) He identifies several financial events and consequences to a borrower who was provided a loan modification, which, he asserts, would be relevant to whether the borrower incurred damages as a result of the modification. (Id.) First, Floyd notes that the borrower's modified monthly payments were reduced after the modification and that the reduction “was in part due to lowered interest rates being provided to the Plaintiffs pursuant to their loan modification agreements.” (Id. (citing Blanchard Tr. at 166).) He opines that “interest rates represent the ‘cost' of funds, and by lowering the interest rate, the borrower is paying less monthly for the use of the monies.” (Id. at 17.) Second, Plaintiffs received the economic value for the use of their homes - rather than renting other lodging if the mortgage was foreclosed - which is a significant consideration of the existence and calculation of damages arising from receipt and acceptance of modification agreements since this factor plays a significant role in any individual borrower's decision to enter into the modification agreement. (Id.) Third, the lower payment option afforded Plaintiffs the ability to pay additional principal if they chose to do so. (Id.) Fourth, for many borrowers the amount due under the Plaintiffs' pre-modification mortgage loan terms was not increased, but some borrowers, like the Caves and Kaminskis, owed delinquencies and other fees that were added to the principal balance upon modification, while other borrowers, like Abraham, had a portion of their principal forgiven in the modification. Fifth, whether a borrower had equity in their home is relevant since, if they did, a traditional sale would have been possible, while the lack of equity and past payment defaults are generally triggers to foreclosure. Finally, by lowering the monthly payments, the mortgage loans became more affordable thus enabling borrowers to hold and sell their homes at a later date when the market rebounded. (Id. at 16-18.) Floyd opines that each of these factors is financially favorable to the Plaintiffs and appears contrary to the existence of any possible financial harm or damage that may have arisen from the loan modification agreements by Ocwen. Additionally, Abraham, and presumably other putative class members, benefited from the reduction of the principal balance and total outstanding debt of her loan. (Id. at 18.)

         Floyd criticizes Becker's damages model on several grounds. Using the reduced loan modification interest rate and the previously-applicable loan amortization term, Dr. Becker calculates a new monthly payment and balloon payment amount for a hypothetical loan product. Floyd notes that Becker then compares these amounts to the payments due under the actual loan modification agreement to present his purported measure of financial damages. (Id. at 19.) Floyd faults Dr. Becker for assuming that all Plaintiffs, and presumably all putative class members, had an expectation that the amortization term, and the balloon payment, if any, did not change as a result of the modification. As such, Dr. Becker asserts that the Plaintiffs are entitled to recover damages for any excess payments the Plaintiffs will allegedly have to make as a result of the extended amortization term and the resulting balloon payments. (Id. at 20.) Floyd calls this approach

a mechanistic damage model to hypothesize the impact of maintaining the loan amortization term in place before any modification . . . . The result of Dr. Becker's calculation assumptions is a proposed monthly loan payment that is higher than the modification monthly payment for two of the three named Plaintiffs and the same for one of the Plaintiffs. This phenomenon is caused by his calculation of a revised monthly payment based on the original, pre-modification amortization period, which is shorter than the loan modification amortization period for those two Plaintiffs.

(Id. at 20.)

         Next, Floyd faults Dr. Becker's analysis because Becker also assumes that the loan principal payments must still be sufficient to achieve the loan payoff amount before the end of the amortization term, thereby causing an increase in the required monthly principal payment amounts over those reflected in the actual loan modification. A consequence of Dr. Becker's calculated higher monthly principal payments, and the assumption of timely payments for the life of the loan, is a lower hypothetical balloon payment at the end of the contractual mortgage period. Importantly, “under Dr. Becker's assumptions, the Plaintiffs' monthly payments are higher than they actually have made or were required to make under their actual loan modifications, creating an unusual financial presentation of damages.” (Id. at 21.) Dr. Becker also assumes that, for his hypothetical loan product, (1) Ocwen and Plaintiffs would have each agreed to these alternate terms; (2) each Plaintiff would have been eligible for a modification based on Dr. Becker's terms; and (3) each Plaintiff would have been able to pay the higher monthly payments on the same dates that the actual loan modification payments occurred or were due. Floyd criticizes Dr. Becker's hypothetical loan because neither he nor Plaintiffs offer any evidence that any one of the Plaintiffs was eligible for or could have satisfied those higher monthly payment amounts. (Id.) Floyd notes that, under Dr. Becker's hypothetical loan, while Abraham's monthly payment would remain unchanged, the Cave's monthly payment would increase $325.29 and the Kaminski's monthly payment would increase $328.28. (Id. at 22.)

         To calculate damages, Becker first assumes “that Class members' expectation of the balloon payment and monthly payments would have been the balloon payment and monthly payments that would have occurred had the modified loan been amortized over the previously disclosed amortization term.” (Becker Report ¶ 40.) Floyd criticizes this assumption asserting that the alleged failure to disclose the loan amortization term “would only be relevant to the determination of the minimum monthly payment; an amount the Plaintiffs agreed to and accepted in their loan modification agreements. (Floyd Report at 23.) Floyd further opines that, once the monthly payment is established, the determination of the outstanding principal balance is an easy exercise based on the other terms fully disclosed in the loan modification agreement. Since the Plaintiffs' modification agreements told them the new principal balance due, the interest rate, the loan maturity date, and the minimum monthly payment due, Floyd asserts that this information is sufficient to calculate an expected principal balance outstanding amount after each payment, including the estimated balloon payment. (Id. at 23.) Floyd has prepared an amortization schedule solely based on information from a modification agreement. (Floyd Report Ex. B.) Because borrowers had this information, Floyd asserts that Dr. Becker's analyses and calculations are based on a flawed premise that the alleged failure to disclose the amount of the loan modification balloon payment and the loan amortization term caused the Plaintiffs to suffer financial damages. (Id. at 24.)

         Next, Floyd faults Dr. Becker for failing to address the fact that the Plaintiffs benefited and agreed to the monthly payments under the actual loan modification agreements, which were less than previously owed by the Plaintiffs and lower than the revised amounts calculated by Dr. Becker under his damages approach. (Id.) Floyd calculates that as a result of the loan modification, the net present value benefit realized by the Kaminski Plaintiffs was approximately $96, 000.00. (Floyd Report Ex. C.)

         3. Dr. Becker's Reply to the Floyd Report

         Dr. Becker asserts that Floyd's but-for alternative to the Ocwen balloon modification - no modification at all and continuation of the prior loan terms - is an inappropriate model. (Lechtzin Decl. Ex. 2, February 12, 2016 Reply Class Certification Report of Brian C. Becker (“Becker Reply”) ¶ 6.) Becker asserts that Plaintiffs did not sue because they were “tricked” into a modification; rather they were aware they were entering into a new loan with new terms. He faults Floyd for failing to consider a but-for world where Ocwen maintained the pre-modification amortization term or offered borrowers a modification with a disclosed balloon payment. (Id.)

         Dr. Becker rejects the importance of the factors Floyd listed as allegedly benefiting borrowers entering into a modification because those factors also compare the Ocwen modification only to a but-for world continuing the original loan terms. (Id. ¶ 7.) Specific to Floyd's assertions that under the Ocwen modification borrowers enjoyed the offsetting benefits of lowering their monthly payments, avoiding foreclosure and receiving the economic value for the use of their homes, being able to pay additional principal if they chose to do so, lowering - or at least not increasing - the principal balance, and permitting them breathing room until the market stabilized so they could sell the home, Becker opines that that the

correct counterfactual is not the pre-modification payment; it is the post-modification payment had the modification been implemented with the previously disclosed amortization term. Further, the appropriate comparison is not the overall monthly payment, but the cost of the loan in terms of interest paid []. Under that comparison, as shown in the Becker Report, the borrower does not ‘benefit' from Ocwen's failure to ...

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