United States District Court, D. Nevada
JP MORGAN CHASE BANK, N.A. and FEDERAL HOME LOAN MORTGAGE CORPORATION, Plaintiffs,
GDS FINANCIAL SERVICES, LEODEGARIO SALVADOR, SQUIRE VILLAGE AT SILVER SPRINGS COMMUNITY ASSOCIATION, GARY MCCALL, and DIANA MCCALL, Defendants.
ORDER GRANTING MOTION FOR SUMMARY JUDGMENT AND
DENYING MOTION TO DISMISS (ECF NOS. 28, 33)
P. GORDON, UNITED STATES DISTRICT JUDGE
parties dispute whether a deed of trust still encumbers
property located at 5023 Droubay Drive in Las Vegas following
a non-judicial foreclosure sale conducted by defendant Squire
Village at Silver Springs Community Association (Squire
Village). Plaintiff JPMorgan Chase Bank, N.A. is the
beneficiary of record for the deed of trust and is the
servicer for plaintiff Federal Home Loan Mortgage Corporation
(“Freddie Mac”). The plaintiffs seek a
declaration that the deed of trust continues to encumber the
plaintiffs move for summary judgment on the basis that the
federal foreclosure bar in 12 U.S.C. § 4617(b)(2)(A)(i)
precludes Squire Village's foreclosure sale from
extinguishing Freddie Mac's interest in the property.
Squire Village filed a limited opposition, asserting it does
not oppose the request that the deed of trust continue to
encumber the property, but it does oppose any ruling that the
foreclosure sale it conducted is void. ECF No. 31. Defendant
GDS Financial Services (GDS), a sole proprietorship owned by
defendant Leodegario Salvador, purchased the property at the
foreclosure sale and is the current property owner. Salvador
opposes the plaintiffs' motion and moves to dismiss,
arguing generally that he is a good faith purchaser and the
dispute is really between the plaintiffs and Squire Village.
He also raises a variety of other arguments.
Salvador's motion to dismiss and grant the
plaintiffs' motion for summary judgment. Freddie
Mac's interest cannot be extinguished by a homeowners
association (HOA) sale under the federal foreclosure bar.
Gary McCall and Diana McCall obtained a loan in May 2005 from
MIT Lending to purchase the property. ECF Nos. 28-1 at 2;
28-2 at 4. The loan was secured by a deed of trust
encumbering the property. ECF No. 28-1 at 2. The deed of
trust identified MIT as the lender, Chicago Title Lender
Source as the trustee, and Mortgage Electronic Registration
Systems, Inc. (MERS) as the beneficiary under the deed of
trust solely as nominee for the lender and its assigns.
Id. at 2-3.
Mac purchased the loan and deed of trust on July 14, 2005 and
has owned it since. ECF No. 28-2 at 4. JPMorgan Chase is
Freddie Mac's servicer for the loan. Id. at 5-6.
On March 25, 2011, MERS assigned the deed of trust to
JPMorgan Chase. ECF No. 28-3. That same day, JPMorgan Chase
assigned the deed of trust to Chase Home Finance, LLC.
Id. In August 2012, MERS re-assigned the deed of
trust to JPMorgan Chase, the successor by merger to Chase
Home Finance. Id.
2, 2011, defendant Squire Village recorded a notice of
delinquent assessment because the McCalls owed it unpaid
assessments. ECF No. 28-4. Squire Village filed a notice of
default and election to sell based on the unpaid assessments
on August 8, 2011. ECF No. 28-5. Squire Village recorded a
notice of sale a few weeks later, setting the sale for
September 26, 2012. ECF No. 28-6. The property was sold on
that date to GDS for $5, 100. ECF No. 28-7. On December 13,
2013, JPMorgan Chase recorded a notice of default and
election to sell under the deed of trust. ECF No. 28-8. The
plaintiffs filed this declaratory relief action on September
20, 2017. ECF No. 1.
judgment is appropriate if the movant shows “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), (c). A fact is material if it “might affect the
outcome of the suit under the governing law.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). An issue is genuine if “the evidence is such
that a reasonable jury could return a verdict for the
nonmoving party.” Id.
party seeking summary judgment bears the initial burden of
informing the court of the basis for its motion and
identifying those portions of the record that demonstrate the
absence of a genuine issue of material fact. Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden
then shifts to the non-moving party to set forth specific
facts demonstrating there is a genuine issue of material fact
for trial. Fairbank v. Wunderman Cato Johnson, 212
F.3d 528, 531 (9th Cir. 2000). I view the evidence and
reasonable inferences in the light most favorable to the
non-moving party. James River Ins. Co. v. Hebert Schenk,
P.C., 523 F.3d 915, 920 (9th Cir. 2008).
federal foreclosure bar in 12 U.S.C. § 4617(j)(3)
provides that “in any case in which [the Federal
Housing Finance Agency (FHFA)] is acting as a conservator,
” “[n]o property of [FHFA] shall be subject to .
. . foreclosure[ ] or sale without the consent of
[FHFA].” The plaintiffs argue that under the federal
foreclosure bar, the HOA sale could not extinguish Freddie
Mac's interest in the property because at the time of the
sale, FHFA was acting as Freddie Mac's conservator and
Freddie Mac owned an interest in the property.
question of whether the federal foreclosure bar preserves
Freddie Mac's interest in this property following Squire
Village's foreclosure sale of its superpriority lien is
controlled by Berezovsky v. Moniz, 869 F.3d 923 (9th
Cir. 2017). In that case, the Ninth Circuit held that the
federal foreclosure bar preempts Nevada law and precludes an
HOA foreclosure sale from extinguishing Freddie Mac's
interest in property without FHFA's affirmative consent.
Id. at 927-31. That court accepted as proof of
ownership the same type of evidence offered in this case.
Id. at 932-33.
does not dispute that Freddie Mac owned an interest in the
loan and deed of trust at the time of the HOA foreclosure
sale other than to offer conclusory statements that (1) the
loan was securitized so the plaintiffs lack standing and (2)
Freddie Mac “disowns defective loans” and the
“mere fact that the loan was foreclosed by [the] HOA