2:16-cv-02190
D. Nev.Nov 12, 2019Background
- Property at 50 Aura De Blanco St., #13103, Henderson, NV was subject to a deed of trust recorded in 2007; borrowers executed note and deed of trust with lender CCSF/Greystone and MERS as beneficiary.
- Fannie Mae acquired the loan in March 2007 and owned the note at the time of the HOA foreclosure; BANA served as the loan servicer and appeared as record beneficiary.
- Homeowners fell behind on HOA dues; HOA initiated nonjudicial foreclosure under NRS Chapter 116 and purchased the property at a foreclosure sale on September 17, 2013 for $4,900.
- FHFA placed Fannie Mae into conservatorship in 2008; 12 U.S.C. § 4617(j)(3) (the Federal Foreclosure Bar) prohibits extinguishing a conservator-controlled enterprise’s property interest without FHFA consent.
- BANA sued seeking a declaration that the HOA sale did not extinguish Fannie Mae’s interest; BANA moved for partial summary judgment based chiefly on the Federal Foreclosure Bar and evidence (Fannie Mae SIR records) showing Fannie Mae owned the loan and BANA was servicer.
- The Court granted summary judgment for BANA, holding the Federal Foreclosure Bar prevented the HOA sale from extinguishing Fannie Mae’s interest; lis pendens was expunged and the case closed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FHFA's conservatorship/Federal Foreclosure Bar prevents an HOA nonjudicial foreclosure from extinguishing Fannie Mae’s interest | Federal Foreclosure Bar preempts Nevada law; Fannie Mae owned the loan at sale so foreclosure cannot extinguish its interest | HOA/foreclosure purchaser contended the sale valid under NRS Chapter 116 and extinguished prior interests | Court: Federal Foreclosure Bar applies; HOA sale did not extinguish Fannie Mae’s interest; summary judgment for BANA |
| Whether FHFA or Fannie Mae consented to the foreclosure sale | No affirmative consent was given; servicer status does not equal consent | Defendants argued lack of recorded ownership or servicer actions could allow extinguishment or imply consent | Court: No evidence of affirmative FHFA consent; Ninth Circuit rejects implied consent; bar applies |
Key Cases Cited
- Berezovsky v. Moniz, 869 F.3d 923 (9th Cir. 2017) (Federal Foreclosure Bar precludes HOA foreclosures from extinguishing a conservatorship-controlled enterprise’s property interest without FHFA consent)
- Daisy Trust v. Wells Fargo Bank, N.A., 445 P.3d 846 (Nev. 2019) (Nevada Supreme Court accepts similar servicer/GSE database evidence to prove ownership)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment standard)
- Scott v. Harris, 550 U.S. 372 (2007) (no genuine factual dispute when record cannot lead a rational trier of fact to find for nonmoving party)