Bayview Loan Servicing, LLC v. G2 Ventures LLC
2:17-cv-00120
| D. Nev. | Feb 10, 2020Background
- Property at 1565 Pasture Lane, Las Vegas, was subject to a deed of trust from a 2007 BANA loan; BANA assigned the deed to Bayview in 2015.
- Freddie Mac purchased the promissory note and deed of trust in 2007 and was under FHFA conservatorship; Freddie Mac’s servicer (BANA, later Bayview) acted in the servicing role per Freddie Mac’s Single-Family Servicing Guide.
- Homeowners association (Daybreak Gardens HOA) initiated nonjudicial foreclosure under NRS Chapter 116 for unpaid assessments; foreclosure sale occurred January 16, 2013, and G2 Ventures bought the property.
- Freddie Mac (and FHFA) did not consent to the HOA foreclosure; Freddie Mac did not have an assignment recorded in its name at the time of sale.
- Plaintiffs (Bayview and Freddie Mac) sued for declaratory relief under the Federal Foreclosure Bar, 12 U.S.C. § 4617(j)(3), seeking a declaration that the HOA sale did not extinguish Freddie Mac’s interest; court granted Plaintiffs’ summary judgment and declared G2 took title subject to Freddie Mac’s deed of trust; lis pendens expunged.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Federal Foreclosure Bar preempts an HOA sale from extinguishing Freddie Mac’s interest | Federal Foreclosure Bar protects Freddie Mac’s interest during FHFA conservatorship because Freddie Mac owned the loan before the HOA sale | HOA/G2 contend the Bar does not apply because Freddie Mac’s interest wasn’t properly recorded or evidenced | Held for Plaintiffs: Federal Foreclosure Bar prevents extinguishment; Freddie Mac had an interest at sale |
| Effect of Freddie Mac not recording assignment under state law | Recording not required pre-2011; Freddie Mac validly acquired the loan despite no recorded assignment | G2 argues failure to record or comply with statute of frauds invalidates Freddie Mac’s interest | Held for Plaintiffs: Nevada law (Daisy Trust) permits enforcement without recorded assignment; recordation argument fails |
| Sufficiency of evidence proving Freddie Mac’s ownership (servicing agreement, loan file) | Freddie Mac’s MIDAS records, Meyer declaration, and the Guide sufficiently show purchase and servicer relationship | G2 argues absence of the servicing agreement and original note means insufficient proof | Held for Plaintiffs: enterprise records, Guide, and declaration suffice under Ninth Circuit and Nevada precedent |
| Procedural due process challenge to the Federal Foreclosure Bar | N/A (G2 raises DP claim) | G2 asserts Bar deprives it of property without adequate process | Held for Plaintiffs: No protected interest in taking property free of a senior deed of trust; no DP violation because Freddie Mac’s interest was not extinguished |
Key Cases Cited
- Berezovsky v. Moniz, 869 F.3d 923 (9th Cir. 2017) (Federal Foreclosure Bar prevents extinguishment of enterprise interests during FHFA conservatorship)
- Daisy Trust v. Wells Fargo Bank, N.A., 445 P.3d 846 (Nev. 2019) (recording not required pre-2011 to enforce an assignment of beneficial interest)
- Federal Home Loan Mortgage Corp. v. SFR Investments Pool 1, LLC, 893 F.3d 1136 (9th Cir. 2018) (no procedural due process right to take property free of a superior deed of trust)
- Saticoy Bay LLC Series Magic Mesa St. Tr. v. JP Morgan Chase Bank, N.A., 448 P.3d 574 (Nev. 2019) (enterprise records and declarations can establish ownership for Foreclosure Bar purposes)