Nationstar Mortgage LLC v. Saticoy Bay LLCNationstar Mortgage LLC v. Saticoy Bay LLC
FOR PUBLICATION
Appeal from the United States District Court for the District of Nevada
Jennifer A. Dorsey, District Judge, Presiding
Submitted April 13, 2021*
Pasadena, California
Filed May 5, 2021
Before: Richard A. Paez and Lawrence VanDyke, Circuit Judges, and Sharon L. Gleason,** District Judge.
Opinion by Judge VanDyke
SUMMARY***
Nevada Foreclosure Law
The panel affirmed the district court‘s summary judgment in favor of Nationstar Mortgage LLC in a diversity action alleging claims arising from a nonjudicial foreclosure by a homeowners’ association (“HOA“) on real property in Nevada.
Fannie Mae purchased the loan, secured by a Deed of Trust (“Deed“), on a home in Las Vegas, Nevada. The Deed was eventually assigned to Bank of America, N.A. (“BANA“), and then to Nationstar. As a result of the homeowners’ failure to pay HOA dues, the HOA foreclosed on the real property at issue. The buyer at the sale conveyed the property to Saticoy Bay, LLC. Nationstar sued Saticoy Bay to quiet title. The district court granted summary judgment to Nationstar on the grounds that the Federal Foreclosure Bar (prohibiting the foreclosure of Federal Housing Finance Agency (“FHFA“) property without FHFA‘s consent) prevented the extinguishment of Fannie Mae‘s Deed.
The panel rejected Saticoy‘s two threshold challenges, and held that Nationstar properly and timely raised its claims based on the Federal Foreclosure Bar. Specifically, first, the panel held that Nationstar had standing to invoke the Federal Foreclosure Bar where Nationstar presented ample evidence of its servicing relationship with Fannie Mae. This relationship, along with the authority Fannie Mae delegated to its loan servicers to protect Fannie Mae‘s mortgage loans, was more than sufficient to establish that Nationstar was Fannie Mae‘s loan servicer and had the authority to assert the Federal Foreclosure Bar in this case. Second, Nationstar timely invoked the Federal Foreclosure Bar because Nationstar brought a quiet title action within the applicable six-year statute of limitations under
The panel held that the Federal Foreclosure Bar applied to the HOA foreclosure sale here. First, Fannie Mae was, and remains, in FHFA conservatorship. Second, Nationstar‘s evidence demonstrated Fannie Mae‘s ownership interest in the loan. Third, Nationstar demonstrated its agency relationship with BANA at the time of the foreclosure sale. The panel held that, contrary to Saticoy‘s argument, Nationstar did not need to specifically produce the Mortgage Selling and Servicing Contract to establish BANA‘s relationship with Fannie Mae or its own servicing relationship with Fannie Mae because the argument had been explicitly rejected by the Nevada Supreme Court. The panel rejected Saticoy‘s argument that Nationstar‘s supporting declaration was defective because it was not based on “personal knowledge.” The panel also rejected, as foreclosed by binding precedent, Saticoy‘s argument that Fannie Mae did not hold a valid ownership interest in the loan because Nationstar failed to produce a “signed writing” evincing such interest as required by the Nevada statute of frauds. Given that Saticoy was not a party to the underlying loan agreement pursuant to which Fannie Mae acquired the loan, Saticoy could not raise the statute of frauds. The panel also rejected Saticoy‘s contention that Fannie Mae did not comply with the “mandatory language” of the Nevada recording statutes,
The panel held that the Federal Foreclosure Bar preempted the Nevada HOA law. The panel noted that, as with most questions in this case, that this issue had already been clearly and repeatedly answered. The panel rejected Saticoy‘s argument that because Nationstar had an adequate remedy at law, the district court inappropriately granted Nationstar equitable relief from the recitals in the foreclosure deed. Assuming without deciding that the relief granted by the district court was indeed equitable in nature, the panel held that Saticoy failed to explain how, under Nevada law, monetary damages constituted an adequate remedy for loss of real property rights.
COUNSEL
Michael F. Bohn, Law Offices of Michael F. Bohn Esq. Ltd., Henderson, Nevada, for Defendants-Appellants.
R. Aaron Chastain and Benjamin W. Perry, Bradley Arant Boult Cummings LLP, Nashville, Tennessee, for Plaintiff-Appellee.
Leslie Bryan Hart and John D. Tennert III, Fennemore Craig P.C., Reno, Nevada; Asim Varma, Michael A.F. Johnson, and Dirk C. Phillips, Arnold & Porter Kaye Scholer LLP, Washington, D.C.; for Amicus Curiae Federal Housing Agency.
OPINION
VANDYKE, Circuit Judge:
As the saying goes, “there is nothing new under the sun.” That may be true of these types of Nevada homeowners association (HOA) foreclosure lawsuits generally, given that hundreds of such cases have been filed and addressed by both state and federal courts. But it is certainly true of this case in particular, where the arguments espoused by Saticoy Bay LLC, Series 9229 Millikan Avenue (Saticoy) have all been foreclosed by Ninth Circuit and Nevada Supreme Court precedent. With a brooding sense of déjà vu all over again, we re-revisit the interaction of the Federal Foreclosure Bar,
While Nevada law generally gives delinquent HOA dues superpriority over other lienholders, it does not take priority over federal law. And federal law, in the form of the Federal Foreclosure Bar, prohibits the foreclosure of Federal Housing Finance Agency (FHFA) property without FHFA‘s consent.
I. FACTS & PROCEDURAL BACKGROUND
In 2005, Christopher Haberman and Renee Houston took out a $219,200 loan on their home in Las Vegas, Nevada. The deed of trust (the Deed) securing the $219,200 note was recorded on February 25, 2005, and listed Countrywide Home Loans, Inc. as the lender and Mortgage Electronic Registration Systems, Inc. (MERS) as the beneficiary and nominee for the lender and the lender‘s successors and assigns. Fannie Mae purchased the loan in March 2005. On October 28, 2010, MERS recorded an assignment of the Deed to BAC Home Loans Servicing, LP f/k/a Countrywide Home Loans Servicing, LP (BAC).1 BAC then merged into Bank of America, National Association (BANA) effective July 1, 2011.
As a result of the homeowners’ failure to pay HOA dues, the Independence II Homeowners’ Association ultimately foreclosed on the property and sold it to Millikan Avenue Trust at a foreclosure sale on October 5, 2012. In August 2013, BANA recorded an assignment of the Deed to Nationstar, and in September 2013, Millikan Avenue Trust conveyed the property to Saticoy. On November 11, 2015, Nationstar sued Saticoy seeking to quiet title and obtain a declaration that Fannie Mae‘s Deed was not extinguished by the HOA foreclosure sale. The district court granted summary judgment to Nationstar on the grounds that the Federal Foreclosure Bar prevented the extinguishment of Fannie Mae‘s Deed.
Saticoy appeals from this decision by the district court. We have jurisdiction under
II. ANALYSIS
A. Nationstar properly and timely raised its claims based on the Federal Foreclosure Bar.
Saticoy asserts two threshold challenges: (1) that Nationstar lacks standing to invoke the Federal Foreclosure Bar, and (2) that Nationstar did not timely raise it. But the Nevada Supreme Court has declared that “a loan servicer has standing to assert the Federal Foreclosure Bar on behalf of . . . Fannie Mae.” Daisy Tr. v. Wells Fargo Bank, N.A., 445 P.3d 846, 847 n.1 (Nev. 2019) (en banc). And Nationstar presented ample evidence of its servicing relationship with Fannie Mae—including Fannie Mae business records, supported by a declaration from Mr. Curcio, an Assistant Vice President for Fannie Mae, identifying Nationstar as the current loan servicer. This relationship, together with the authority Fannie Mae delegates to its loan servicers to protect Fannie Mae‘s mortgage loans,2 was more than sufficient to establish that Nationstar was Fannie Mae‘s loan servicer and had the authority to assert the Federal Foreclosure Bar in this case. See id. at 850 (concluding that employee declarations confirming the current loan servicer, combined with the Federal Home Loan Mortgage Corporation (Freddie Mac) seller/servicer guide authorizing the loan servicer to “represent and defend Freddie Mac‘s interest in the applicable [m]ortgage(s),” gave the loan servicer standing to assert the Federal Foreclosure Bar (citing Berezovsky, 869 F.3d at 932–33)).
Nationstar also timely invoked the Federal Foreclosure Bar because Nationstar brought a quiet title action, arguing that the Deed had not been extinguished because of the Federal Foreclosure Bar, three years and one month after the HOA foreclosure sale, and the applicable statute of limitations is six years under
B. The Federal Foreclosure Bar applies to the HOA foreclosure sale here.
Saticoy makes several arguments related to whether the Federal Foreclosure Bar preserved Fannie Mae‘s Deed. Saticoy generally asserts that the foreclosure of the HOA‘s superpriority lien in accordance with the Nevada HOA Law extinguished the Deed before it was assigned to Nationstar. This argument fails if the Federal Foreclosure Bar applies and that Bar preempts Nevada state law. The Federal Foreclosure Bar applies if, at the time of the foreclosure sale, (1) Fannie Mae was in FHFA conservatorship, see Berezovsky, 869 F.3d at 928; (2) Fannie Mae owned the Deed; and (3) Fannie Mae had an agency relationship with BANA (formerly BAC), the beneficiary of record on the Deed. See id. at 931–32.
With respect to the first factor, Fannie Mae was placed under FHFA‘s conservatorship on September 6, 2008, Federal Home Loan Mortgage Corp., 893 F.3d at 1140, and remains there today. See LN Mgmt., LLC Series 5664 Divot v. JPMorgan Chase Bank, N.A., 957 F.3d 943, 946 (9th Cir. 2020). Regarding the second and third factors, Nationstar‘s evidence appropriately demonstrates both Fannie Mae‘s ownership interest in the loan and its agency relationship with BANA at the time of the foreclosure sale. Specifically, Nationstar introduced Fannie Mae‘s business records—i.e., printouts from its internal database and the supporting declaration from Mr. Curcio, showing that: (1) Fannie Mae acquired the loan on March 1, 2005, and continued to own it through the October 2012 HOA foreclosure sale, and (2) BANA served as Fannie Mae‘s loan servicer prior to transferring that responsibility to Nationstar on April 30, 2013. In further support of the agency relationship between BANA and Fannie Mae, Nationstar presented excerpts of the Fannie Mae Single Family 2012 Servicing Guide (the Guide), which defined Fannie Mae‘s relationship with its loan servicers at the time of the foreclosure sale. The Guide provides that when Fannie Mae purchases a mortgage, “Fannie Mae may take any and all action with respect to the mortgage loan it deems necessary . . . including recordation of a mortgage assignment . . . from the servicer to Fannie Mae or its designee.” The Guide also gives BANA, as a loan servicer for Fannie Mae, certain authority to foreclose on the loan on Fannie Mae‘s behalf.
This court and the Nevada Supreme Court have previously concluded that for purposes of the Federal Foreclosure Bar, virtually identical evidence established both an enforceable property interest in the loan and an agency relationship with the loan servicer, which was identified as the beneficiary of record on the relevant deed. See, e.g., Berezovsky, 869 F.3d at 932–33 & n.8 (noting that “Freddie Mac‘s database printouts [were] admissible business records” sufficient to support a “valid and enforceable” property interest under Nevada law and that substantially similar language in Freddie Mac‘s servicer guide “mirrors Montierth‘s description of the requisite agency relationship“) (referencing In re Montierth, 354 P.3d 648, 650–51 (Nev. 2015) (en banc)); see also Daisy Tr., 445 P.3d at 850–51. Contrary to Saticoy‘s argument, Nationstar did not need to specifically produce the Mortgage Selling and Servicing Contract to establish BANA‘s agency relationship with Fannie Mae—or its own servicing relationship with Fannie Mae, for that matter. This argument has been explicitly rejected by the Nevada Supreme Court. See Daisy Tr., 445 P.3d at 849–50 (rejecting the argument that Freddie Mac must provide the “actual loan servicing agreement” to establish an agency relationship with the servicer and its own ownership interest).
Saticoy further argues that Nationstar‘s supporting declaration was defective because it was not based on “personal knowledge.” But Mr. Curcio, the declarant in Nationstar‘s declaration, permissibly based his testimony on his knowledge of Fannie Mae‘s recordkeeping system and the data contained in Fannie Mae‘s business records. See, e.g., id. at 850. Mr. Curcio could properly testify to the data entered into Fannie Mae‘s database, even though “he did not input each piece of data . . . . [because] there is no dispute that [Mr. Curcio] . . . was qualified to testify about the business practices and procedures for inputting the underlying data. It is not necessary for each individual who entered a record . . . into the database to testify as to the accuracy of each piece of data entered.” U-Haul Int‘l, Inc. v. Lumbermens Mut. Cas. Co., 576 F.3d 1040, 1044 (9th Cir. 2009).
Saticoy also argues that Fannie Mae does not hold a valid ownership interest in the loan because Nationstar failed to produce a “signed writing” evincing such interest as required by the Nevada statute of frauds. See
Saticoy further contends that Fannie Mae did not comply with the “mandatory language” of the Nevada recording statutes,
Even if we assumed, without deciding, that Nevada‘s bona fide purchaser statutes were implicated here, Saticoy‘s argument would still be doomed because it
In conclusion, Fannie Mae held an enforceable interest in the loan at the time of the HOA foreclosure sale, as established by evidence of Fannie Mae‘s acquisition and continued ownership of the loan throughout that time and by evidence of its agency relationship with BANA (formerly BAC), the named beneficiary on the recorded Deed. Fannie Mae‘s interest in the loan, coupled with the fact that it was under FHFA conservatorship at the time of the sale, means the Federal Foreclosure Bar applies to this case.
C. The Federal Foreclosure Bar preempts the Nevada HOA Law.
Having established that Fannie Mae owned the loan at the time of the sale, and that it was in FHFA conservatorship, the final question is whether the Federal Foreclosure Bar preempts the Nevada HOA law. As with most questions in this case, that too has already been clearly and repeatedly answered: “The Federal Foreclosure Bar preempts the Nevada superpriority lien scheme.” M & T Bank, 963 F.3d at 856 (citing Berezovsky, 869 F.3d at 931); see also Saticoy Bay LLC Series 9641 Christine View v. Fed. Nat‘l Mortg. Ass‘n, 417 P.3d 363, 368 (Nev. 2018) (en banc) (“[T]he Federal Foreclosure Bar implicitly preempts [the Nevada HOA Law] to the extent that a foreclosure sale extinguishes the deed of trust.“). The Federal Foreclosure Bar therefore preserved Fannie Mae‘s Deed, unless FHFA consented to the HOA sale. See
Saticoy finally argues that because Nationstar had an adequate remedy at law, the district court inappropriately granted Nationstar equitable relief from the recitals in the foreclosure deed, namely the default recital. Even assuming, without deciding, that the relief granted by the district court was indeed equitable in nature, Saticoy fails to explain how, under Nevada law, monetary damages constitute an adequate remedy for loss of real property rights. See, e.g., Dixon v. Thatcher, 742 P.2d 1029, 1030 (Nev. 1987) (per curiam) (reasoning that “real property and its attributes are considered unique and loss of real property rights generally results in irreparable harm“); Nev. Escrow Serv., Inc. v. Crockett, 533 P.2d 471, 472 (Nev. 1975) (per curiam) (reversing the trial court‘s denial of a preliminary injunction to halt foreclosure on properties because, unlike the trial court—which concluded that “there existed an adequate remedy at law, to wit, money damages“—the Nevada Supreme Court determined “[i]n this instance the equitable remedy is so far superior that the legal remedy may be rendered inadequate“).4
III. CONCLUSION5
For the reasons above, we AFFIRM the district court‘s grant of summary judgment to Nationstar.6