996 F.3d 950
9th Cir.2021Background
- 2005: Haberman and Houston executed a $219,200 deed of trust; MERS listed as beneficiary; Fannie Mae purchased the loan March 1, 2005.
- Homeowners defaulted on HOA dues; Independence II HOA foreclosed on the superpriority lien and sold the property at auction on October 5, 2012 to Millikan Avenue Trust.
- Record showed BAC/BANA (the servicer/beneficiary of record) at time of the sale; Nationstar became servicer/assignee in 2013 and Saticoy acquired the property after the sale.
- Nationstar sued in 2015 seeking to quiet title and declared the deed of trust was not extinguished because the FHFA Federal Foreclosure Bar protected Fannie Mae’s interest.
- District court granted summary judgment for Nationstar; Ninth Circuit affirmed, holding the Federal Foreclosure Bar preserved Fannie Mae’s deed and preempted Nevada’s HOA superpriority extinguishment absent FHFA consent.
Issues
| Issue | Plaintiff's Argument (Nationstar) | Defendant's Argument (Saticoy) | Held |
|---|---|---|---|
| Standing & timeliness to invoke Federal Foreclosure Bar | Nationstar, as Fannie Mae’s servicer, has authority and sued within the 6‑year limitations period | Saticoy: Nationstar lacks standing and raised bar untimely | Nationstar has servicer standing and sued timely; threshold challenges fail |
| Applicability of Federal Foreclosure Bar to HOA sale | Fannie Mae owned the loan and was under FHFA conservatorship; servicer agency existed, so the Bar applies | Saticoy: HOA superpriority foreclosure extinguished the deed before assignment to Nationstar | Bar applies because Fannie Mae owned the loan, FHFA was conservator, and servicer agency existed |
| Validity of Fannie Mae’s ownership under statute of frauds / recording rules | Business records and servicer listing on recorded deed establish Fannie Mae’s enforceable interest | Saticoy: No signed writing/recording identifying Fannie Mae means interest invalid as to purchaser | Statute of frauds/recording objections rejected; precedent permits business records/servicer evidence to establish ownership |
| Bona fide purchaser defense | Nationstar: Saticoy had record and constructive notice of superior interest | Saticoy: Took without notice and so is protected as a bona fide purchaser | Saticoy had record/constructive notice (recorded deed and footers); not a bona fide purchaser |
| Preemption and adequacy of legal remedy | Federal Foreclosure Bar preempts state HOA law; equitable relief appropriate because real property rights are unique | Saticoy: Nevada law should govern or monetary damages are adequate | Federal Foreclosure Bar preempts Nevada superpriority to the extent it would extinguish Fannie Mae’s deed; no evidence FHFA consented; equitable relief appropriate |
Key Cases Cited
- Fed. Home Loan Mortg. Corp. v. SFR Invs. Pool 1, LLC, 893 F.3d 1136 (9th Cir.) (discusses FHFA conservatorship and interplay with state foreclosure law)
- Berezovsky v. Moniz, 869 F.3d 923 (9th Cir.) (servicer standing and Federal Foreclosure Bar analysis)
- M & T Bank v. SFR Invs. Pool 1, LLC, 963 F.3d 854 (9th Cir.) (statute of limitations and preemption of Nevada HOA law)
- Daisy Tr. v. Wells Fargo Bank, N.A., 445 P.3d 846 (Nev. 2019) (Nevada Supreme Court: servicer standing and evidentiary sufficiency for agency/ownership)
- Saticoy Bay LLC Series 9641 Christine View v. Fed. Nat’l Mortg. Ass’n, 417 P.3d 363 (Nev. 2018) (Nevada Supreme Court: Federal Foreclosure Bar preempts state law to extent it extinguishes deed)
- Shadow Wood Homeowners Ass’n, Inc. v. N.Y. Cmty. Bancorp, Inc., 366 P.3d 1105 (Nev. 2016) (bona fide purchaser/constructive notice standard under Nevada law)
- U-Haul Int’l, Inc. v. Lumbermens Mut. Cas. Co., 576 F.3d 1040 (9th Cir.) (permissible foundation for business‑records testimony)