United States District Court, D. Nevada
C. JONES United States District Judge
case arises out of a homeowners' association foreclosure
sale. Pending before the Court is Plaintiff Nationstar
Mortgage LLC's (“Nationstar”) Motion for
Summary Judgment (ECF No. 27). As the basis for its motion,
Nationstar advances a single argument: That the Federal
National Mortgage Association (“Fannie Mae”)
owned the note and first deed of trust on the subject
property at the time of the foreclosure sale, with Nationstar
as beneficiary of record. Accordingly, Fannie Mae's
interest in the property could not have been extinguished by
the foreclosure sale, because the Federal Housing Finance
Agency (“FHFA”) did not consent to foreclosure.
See 12 U.S.C. § 4617(j)(3).
Nationstar's evidence fails to establish that there is no
genuine dispute of material fact with respect to the
existence, nature, and timing of Fannie Mae's purported
interest in the property, its motion is denied.
FACTS AND PROCEDURAL HISTORY
about October 5, 2007, Laura Kerr purchased real property at
3247 Modena Drive, Sparks, Nevada 89434 (the
“Property”) via a $196, 000 loan (the
“Loan”), secured by a first deed of trust (the
“DOT”) recorded on October 9, 2007. (Compl.
¶¶ 8, 13, ECF No. 1.) The Property is governed by a
set of codes, covenants, and restrictions (CC&Rs) that
establish, among other things, the homeowner's obligation
to pay dues and assessments; that obligation is enforced by
Defendant D'Andrea Community Association (the
“HOA”). (Id. at ¶ 3; Opp'n Mot.
Summ. J. 3- 4, ECF No. 35.)
argues that on or about December 1, 2007, Fannie Mae
purchased the Loan, acquiring the note and DOT, and
thereafter never resold it. (Mot. Summ. J. ¶¶
II(A)(4)-(7), ECF No. 27.) However, on or about October 13,
2011, non-party Mortgage Electronic Registration Systems,
Inc. (“MERS”) recorded an assignment of its
interest in the DOT to non-party Bank of America, N.A.
(“BOA”). (ECF No. 27-6.) Another assignment was
recorded on May 6, 2013, transferring BOA's interest to
Nationstar. (ECF No. 27-8.) These assignments transferred
“all beneficial interest” under the DOT, along
with “the note(s) and obligations therein described and
the money due and to become due thereon with interest and all
rights accrued or to accrue under said Deed of Trust.”
Contrary to the facial import of these assignments,
Nationstar argues that ownership of the note was never
transferred to BOA or Nationstar; rather, the assignments
merely made BOA, and subsequently Nationstar, servicers of
the Loan and beneficiaries of record of the DOT. (Mot. Summ.
J. ¶¶ II(A)(9)-(11), ECF No. 27.)
purchasing the home, Ms. Kerr failed to pay assessments under
the CC&Rs, and the HOA recorded a notice of delinquent
assessment lien on August 12, 2011, a notice of default and
election to sell on May 3, 2013, and a notice of foreclosure
sale on October 21, 2013. (Id. at ¶¶
II(C)(17)-(19).) The Property was ultimately sold to
Defendant LVDG at auction on December 19, 2013 for $5, 233.
(Id. at ¶ II(C)(20).)
around July 21, 2015, Nationstar filed this action against
the HOA and LVDG, primarily seeking a declaration that the
foreclosure sale did not extinguish its interest in the DOT.
Nationstar now moves for summary judgment on the theory that
Fannie Mae owned the note and DOT at the time of the
foreclosure sale, and therefore extinguishment of the DOT is
preempted by 12 U.S.C. § 4617(j)(3).
must grant summary judgment when “the movant shows 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). Material facts are those which may affect
the outcome of the case. See Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). A dispute as to a
material fact is genuine if there is sufficient evidence for
a reasonable jury to return a verdict for the nonmoving
party. See Id. On a summary judgment motion, a
court's function is not to weigh the evidence and
determine the truth, but to decide whether there is a genuine
issue for trial. See Id. at 249.
determining summary judgment, the federal courts use a
burden-shifting scheme. The moving party must first satisfy
its initial burden. “When the party moving for summary
judgment would bear the burden of proof at trial, it must
come forward with evidence which would entitle it to a
directed verdict if the evidence went uncontroverted at
trial.” C.A.R. Transp. Brokerage Co. v. Darden
Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000)
(citation and internal quotation marks omitted). If the
moving party fails to meet its initial burden, summary
judgment must be denied and the court need not consider the
nonmoving party's evidence. See Adickes v. S.H. Kress
& Co., 398 U.S. 144 (1970). If the moving party
meets its initial burden, the burden then shifts to the
opposing party to establish a genuine issue of material fact.
See Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586 (1986).
establish the existence of a factual dispute, the opposing
party need not establish a material issue of fact
conclusively in its favor. It is sufficient that “the
claimed factual dispute be shown to require a jury or judge
to resolve the parties' differing versions of the truth
at trial.” T.W. Elec. Serv., Inc. v. Pac. Elec.
Contractors Ass'n, 809 F.2d 626, 631 (9th Cir.
1987). Moreover, at the summary judgment stage, the evidence
of the non-movant is “to be believed, and all
justifiable inferences are to be drawn in his favor.”
Anderson, 477 U.S. at 255.
The preemptive effect of § 4617(j)(3) is now