fnma/fannie Mae v. Saticoy Bay LLC Series 8324
20-16359
| 9th Cir. | Dec 8, 2021Background
- Fannie Mae purchased the borrower’s loan and deed of trust before an HOA foreclosure sale on the Las Vegas property at 8324 W. Charleston Blvd.
- Saticoy Bay bought the property at the HOA foreclosure auction.
- The Federal Foreclosure Bar (12 U.S.C. § 4617(j)(3)) applies because a federal entity owned the loan before the sale, which prevents the foreclosure sale from extinguishing Fannie Mae’s deed of trust.
- Saticoy Bay argued the HOA had a duty to disclose that it had not obtained FHFA consent to the sale (or that the loan was federally owned), and that lack of disclosure should void the sale.
- The HOA complied with Nevada law by delivering a deed without warranty as required by Nev. Rev. Stat. § 116.31164(3)(a).
- The district court granted summary judgment to Fannie Mae and the HOA; the Ninth Circuit affirmed, rejecting the claimed disclosure duty and Saticoy Bay’s windfall argument (the latter being unpreserved on appeal).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the HOA foreclosure extinguished Fannie Mae’s deed of trust | Foreclosure sale transferred title free of the deed | Federal Foreclosure Bar prevents extinguishment because Fannie Mae acquired the loan before the sale | The Foreclosure Bar applies; sale did not extinguish Fannie Mae’s deed of trust |
| Whether the HOA owed a duty to disclose lack of FHFA consent or federal ownership under federal law or NRS 116.1113 | HOA had a duty to notify purchasers if FHFA consent was not obtained or if loan was federally owned | No federal statute or NRS provision imposed such a notice duty; HOA’s deed-without-warranty complied with statute | No duty to disclose; neither Federal Foreclosure Bar nor NRS 116.1113 requires the notice Saticoy Bay seeks |
| Whether the foreclosure sale should be voided as an improper windfall to Fannie Mae | Void the sale because it produced an unfair windfall to Fannie Mae | Argument not preserved on appeal; on merits equities don’t support voiding | Argument waived on appeal; alternatively, merits fail—equities do not support voiding |
| Whether appellate review may consider new arguments first raised on appeal | N/A (did not preserve windfall argument below) | Appellate waiver rule prevents consideration absent exceptional circumstances | Court declined to consider the unpreserved argument per established appellate waiver rule |
Key Cases Cited
- CitiMortgage, Inc. v. Corte Madera Homeowners’ Ass’n, 962 F.3d 1103 (9th Cir. 2020) (standard of review: de novo review of summary judgment)
- Nationstar Mortg. LLC v. Saticoy Bay LLC, Series 9229 Millikan Ave., 996 F.3d 950 (9th Cir. 2021) (application of the Federal Foreclosure Bar to prevent extinguishment)
- Fed. Home Loan Mtg. Corp. v. SFR Inv. Pool 1, LLC, 893 F.3d 1136 (9th Cir. 2018) (Federal Foreclosure Bar contains no notice requirement)
- LN Mgmt. LLC Series 356 Desert Inn 206 v. Desert Inn Villas Homeowners’ Ass’n, 478 P.3d 872 (Nev. 2021) (unpublished) (Nevada Supreme Court: no HOA duty to disclose federal ownership or seek FHFA consent)
- In re Am. W. Airlines, Inc., 217 F.3d 1161 (9th Cir. 2000) (appellate rule refusing to consider arguments raised for the first time on appeal)
- U.S. Bank, N.A. v. White Horse Ests. Homeowners Ass’n, 987 F.3d 858 (9th Cir. 2021) (unpublished opinions may be used to infer how Nevada Supreme Court would rule)