Summary: Mortgage Expert Witness testimony allowed even though the defendant argued that he was not qualified to offer an opinion because he has never worked for a mortgage servicer or servicing regulator.
Facts: This case (United States ex rel. Mitchell v. CIT Bank, N.A. – United States District Court – Eastern District of Texas – April 26, 2022) involves a claim under the False Claims Act (FCA). The Relator, Andrew Mitchell, through the plaintiff, The United States, alleges that the defendant, One West Bank, submitted false claims to the Government in order to obtain payment under three Government loan-modification programs. Mitchel alleges that One West Bank certified to numerous Government agencies that it was in compliance with specific laws and regulations, despite it knowing that it was not. One West Bank’s false certifications caused the government to make payments to the bank that it wouldn’t have made. In order to assist in his case, Mitchell hired Mortgage Expert Witness Nelson Locke, Esq. to provide expert testimony. The defendant filed a motion to exclude this expert witness from testifying.
Discussion: One West Bank argues that Locke should be excluded because he “lacks the real world experience necessary to qualify as an expert” as he has never worked for a mortgage servicer or servicing regulator. In addition, according to the defendant, Locke’s analysis on the bank’s compliance with the Real Estate Settlement Procedures Act ignores when the law became effective and that he does not know that dual-tracking regulations changed over time. The court disagreed with these arguments, stating that Locke has extensive experience performing HUD compliance reviews. Also, in his role as a consultant, he advises clients on compliance issues in the mortgage industry. Thus, the court declares that Locke is qualified to offer an opinion in this case. The court also notes that Locke has enough experience in with compliance issues generally in the mortgage servicing industry.
One West Bank also alleges that Locke’s auditing team was inappropriately trained and was not qualified, which added to the unreliability of Locke’s testimony. The bank argues that Locke’s team of ten did not have any mortgaging servicing experience. In addition, One West Bank argues that Locke did not give his team enough time to complete the review and incentivized them to move quickly. The court opines that Locke’s team was qualified and did not cause Locke’s testimony to be unreliable. The court notes that all members of his team had mortgage industry experience and three out of the ten had auditing experience in the mortgage industry. In addition, the court states that Locke trained all of his members individually and even recorded the training sessions.
Conclusion: The motion to exclude the expert witness testimony of Nelson Locke, Esq. is denied.