*1 UNITED STATES DISTRICT COURT DISTRICT OF NEVADA
* * *
BANK OF AMERICA, N.A. , Plаintiff, Case No. 2:16-cv-02190-RFB-DJA ORDER v.
LORETTO BAY MASTER ASSOCIATION
ABSOLUTE COLLECTION SERVICES, LLC ,
Defendants.
I. INTRODUCTION Before the Court is Plaintiff Bank of America, N.A.’s (“BANA”) Motion for Partial Summary Judgment (ECF No. 27). For the following reasons, the Court grants BANA’s motion.
II. PROCEDURAL BACKGROUND
Plaintiff BANA filed its complaint against Defendants Absolute Collection Servicеs LLC
(“Absolute”) and Loretto Bay Master Association (“Loretto” or “HOA”) on September 16, 2016.
ECF No. 1. BANA filed a notice of lis pendens on that same date. ECF No. 3 Absolute filed its
answer on October 11, 2016. ECF No. 9. Loretto filed its answer on December 22, 2016. ECF No.
15. On April 6, 2017, the Court granted the parties’ joint motion to stay litigation pending final
resolution of petitions for writ of certiorari to the United State Supreme Court in the Bourne Valley
and Saticoy Bay cases respectively. Bourne Valley Court Tr. v. Wells Fargo Bank, N.A., 832 F.3d
1154 (9th Cir. 2016), cert denied
[1] The Court makes the following findings of undisputed and disputed facts. a. Undisputed Facts
This matter concerns a nonjudicial foreclosure on a property located at 50 Aura De Blanco Street, # 13103, Henderson, NV 89074 (the “property”). The property sits in a community governed by the HOA. The HOA requires its community members to pay HOA dues Nonparties Jesus Ricardo Diaz and Alejandra Ines Rossignoli borrowed funds from listed CCSF, LLC dba Greystonе Financial Group to purchase the property in 2007. To obtain the loan, Diaz and Rossignoli executed a promissory note and a corresponding deed of trust to secure repayment of the note. The deed of trust, which lists Diaz and Rossignoli as borrowers, CCSF, LLC dba Greystone Financial Group as lender and Mortgage Electronic Registration Systems, Inc., (“MERS”) as beneficiary, was recorded on February 20, 2007. MERS subsequently assigned its interest under the deed of trust to BAC Home Loans Servicing, LP fka Countrywide Home Loans Servicing, LP (“BAC). BANA became successor by July 1, 2011 de jure merger with BAC. Diaz and Rossignoli fell behind on their HOA payments. From January 14, 2013 through Septеmber 2013, the HOA, through its agent, recorded a notice of delinquent assessment lien, followed by a notice of default and election to sell and finally a notice of sale against the property. On Seрtember 17, 2013, a foreclosure sale occurred and on behalf of the HOA and sold the property to the HOA, which paid $4,900 for the Property as recorded on September 23, 2013. *3 However, Fannie Mae previously purchased the note and the deed of trust in March 2007. While its interest was never recorded under its name, Fannie Mae continued to maintain its ownership of the note and the deed of trust at the time оf the foreclosure sale. At the time of the sale, BANA was the servicer of the loan for Fannie Mae. As of July 27, 2017, BANA remains the record beneficiary and Fannie Mae remains the owner of the loan.
The rеlationship between Fannie Mae and its servicers, is governed by Fannie Mae’s Single-Family Servicing Guide (“the Guide”). The Guide provides that servicers may act as record beneficiaries for deeds of trust owned by Fannie Mae. It also requires that servicers assign the deeds of trust to Fannie Mae on Fannie Mae’s demand. The Guide states: The servicer ordinarily appears in the land records as the mortgagee to facilitate performance of the servicer's contractual responsibilities, including (but not limited to) the receipt of legal notices that may impact Fannie Mae's lien, such as noticеs of foreclosure, tax, and other liens. However, Fannie Mae may take any and all action with respect to the mortgage loan it deems necessary to protect its ... ownership of the mоrtgage loan, including recordation of a mortgage assignment, or its legal equivalent, from the servicer to Fannie Mae or its designee. In the event that Fannie Mae determines it necessary to reсord such an instrument, the servicer must assist Fannie Mae by [ ] preparing and recording any required documentation, such as mortgage assignments, powers of attorney, or affidavits; and [by] providing recordation information for the affected mortgage loans.
The Guide also allows for a temporary transfer of possession of the note when necessary for servicing activities, including “whenever the servicеr, acting in its own name, represents the interests of Fannie Mae in ... legal proceedings.” The temporary transfer is automatic and occurs at the commencement of the servicer's reprеsentation of Fannie Mae. The Guide also includes a chapter regarding how servicers should manage litigation on behalf of Fannie Mae. But the Guide clarifies that “Fannie Mae is at all times the owner of the mortgage note[.]” Finally, under the *4 Guide, the servicer must “maintain in the individual mortgage loan file all documents and system records that preserve Fannie Mae’s ownership interest in the mortgage loan.” Finally, the Guide “permits the servicer that has Fannie Mae’s [limited power of attorney] to execute certain types of legal documents on Fannie Mae’s behalf.” The legal documents include full or рartial releases or discharges of a mortgage; requests to a trustee for a full or partial reconveyance or discharge of a deed of trust, modification or extensions of a mortgаge or deed of trust; subordination of the lien of a mortgage or deed of trust, conveyances of a property to certain entities; and assignments or endorsements of mortgages, deeds of trust, or promissory notes to certain entities.
In 2008, Congress passed the Housing and Economic Recovery Act (“HERA”), 12 U.S.C. § 4511 et seq. , which established the Federal Housing Finance Agency (“FHFA”). HERA gave FHFA the authority to oversee Fannie Maе. In accordance with its authority, FHFA placed Fannie Mae under its conservatorship in 2008. Neither FHFA nor Fannie Mae consented to the foreclosure extinguishing Fannie Mae’s interest in the property in this matter.
b. Disputed Facts
The parties the legal effect of the circumstances described above.
IV. LEGAL STANDARD Summary judgment is appropriate when the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show “that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a); accord Celotex Corp. v. Catrett,
V. DISCUSSION
[2]
The Federal Foreclosure Bar, 46 U.S.C. § 4617(j)(3) resolves this matter. The Ninth
Circuit has held that the Federal Foreclosure Bar preempts foreclosures conducted under NRS
Chapter 116 from extinguishing a federal enterprise’s property interest while the enterprise is
under FHFA’s conservatorship unless FHFA affirmatively consented to the extinguishment of the
interest. Berezovksy v. Moniz,
declaration from an assistant vice president at Fannie Mae, Graham Babin. ECF No. 88-1. Mr.
Babin authenticates a printout from Fannie Mae’s Servicer & Investor Reporting platform (“SIR”).
The SIR system shows Fannie Mae acquired the loan on March 1, 2007. The printouts also clearly
*6
that BANA has been the servicer of the loan throughout the period that Fannie Mae has owned the
loan.
The Ninth Circuit has found that database reсords are admissible evidence to show that a
government-sponsored-enterprise acquired a loan. Berezovsky v. Moniz,
Based on the forgoing, the Court grants summary judgmеnt in favor of BANA and declares that the Federal Foreclosure Bar prevented the foreclosure sale from extinguishing Fannie Mae’s interest in the property. The Court finds this holding to be decisive as to all claims in this matter and dismisses all remaining claims as a result.
VI. CONCLUSION
IT IS THEREFORE ORDERED that Plaintiff’s Motion for Summary Judgment (ECF No. 27) is granted. The Court grants Plaintiffs’ quiet title claim insofar as it finds that 12 U.S.C. § 4617(j)(3) preempts any Nevada law that would otherwise permit foreclosure of the HOA Lien, and that the HOA sale did not extinguish Fannie Mae’s interest in the Property.
*7 IT IS FURTHER ORDERED that Plaintiff’s lis pendens (ECF No. 3) is expunged. The Clerk of the Court is instructed to close the case.
DATED: November 12, 2019. __________________________________ RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE
Notes
[1] The Court takes judicial notice of the publicly recorded documents related to the deed of trust and the foreclosure
as well as Fannie Mae’s Single-Family Servicing Guide. Fed. R. Evid. 201 (b), (d); Berezovsky v. Moniz, 869 F.3d
923, 932–33 (9th Cir. 2017) (judicially noticing the Guide); Lee v. City оf Los Angeles,
[2] Because the Court finds that the Federal Foreclosure Bar is dispositive in this case, the Court declines to make any findings of fact or to otherwise address BANA’s argument regarding tender.