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Nationstar Mortgage LLC v. Stonefield Homeowners Association

United States District Court, D. Nevada

May 9, 2019




         I. SUMMARY

         This action arises from a non-judicial foreclosure sale (“HOA Sale”) of real property located at 8670 Kelpie Court, Reno, NV 89506 (“Property”) to satisfy a homeowners' association lien. (ECF No. 43-1 at 5.) Before the Court is Plaintiff Nationstar Mortgage LLC dba Mr. Cooper's (“Nationstar”) motion for summary judgment (“Motion”) (ECF No. 43). Because the relevant deed of trust (“DOT”) is a protected interest of the Federal National Mortgage Association (“Fannie Mae”), the Court finds 12 U.S.C. § 4617(j)(3) (“Federal Foreclosure Bar”) preserved the DOT despite the HOA Sale. Accordingly, the Court will grant the Motion, and declares that Fannie Mae's DOT continues to encumber the Property.[1]


         Defendant Rodney Coffman financed the purchase of the Property with a $240, 000 loan (“Loan”) from Bank of America, N.A. (“BANA”) in October 2007. (ECF No. 21-1 at 4.) In November 2007, Fannie Mae acquired the Loan from BANA and thus the note ("Note") and DOT it secured. (ECF No. 21-5 at 3, 7.) Fannie Mae was thereafter placed under the Federal housing Finance Agency's ("FHFA") conservatorship in 2008[2] and has been in conservatorship since. See, e.g., FHFA, History of Fannie Mae & Freddie Mac Conservatorships,

         On February 24, 2011, BANA recorded a corporate assignment of the DOT to BAC Home Loan Servicing, LP ("BAC"). (ECF No. 43-3.) BANA succeeded BAC's interest in the DOT by merger. (ECF No. 43-4.) On June 17, 2013, BANA recorded an assignment of the DOT to Nationstar. (ECF No. 43-5.)

         Due to Coffman's default on paying HOA assessments, Stonefield Homeowners Association ("HOA") recorded a Notice of Delinquent Assessment Lien, followed by a Notice of Default and Election to Sell, and a Notice of Foreclosure Sale against the Property. (ECF Nos. 43-7, 43-8, 43-9.) The HOA sold the Property at the HOA Sale on September 4, 2013, for $240. (ECF No. 43-10.) The HOA then transferred the Property to Coffman via a quitclaim deed in October 2016. (ECF No. 43-11 at 2.)

         Fannie Mae maintained ownership of the DOT at the time of the HOA Sale and Nationstar was its servicer. (ECF No. 43-2 at 2-3, 7, 13.) At no time did the FHFA consent to the HOA Sale extinguishing or foreclosing Fannie Mae's interest in the Property. (See ECF No. 43-12 (FHFA's Statement on HOA Super-Priority Lien Foreclosures.)

         Fannie Mae sold its interest in the Note and DOT on December 22, 2016, but repurchased the Note and DOT in September 2017. (ECF No. 21 at 2; ECF No. 21-4; ECF No. 43-2 at 4, 10.)


         “The purpose of summary judgment is to avoid unnecessary trials when there is no dispute as to the facts before the court.” Nw. Motorcycle Ass'n v. U.S. Dep't of Agric., 18 F.3d 1468, 1471 (9th Cir. 1994). Summary judgment is appropriate when the pleadings, the discovery and disclosure materials on file, and any affidavits “show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). An issue is “genuine” if there is a sufficient evidentiary basis on which a reasonable fact-finder could find for the nonmoving party and a dispute is “material” if it could affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         The moving party bears the burden of showing that there are no genuine issues of material fact. Zoslaw v. MCA Distrib. Corp., 693 F.2d 870, 883 (9th Cir. 1982). Once the moving party satisfies Rule 56's requirements, the burden shifts to the party resisting the motion to “set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 256. The nonmoving party “may not rely on denials in the pleadings but must produce specific evidence, through affidavits or admissible discovery material, to show that the dispute exists, ” Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991), and “must do more than simply show that there is some metaphysical doubt as to the material facts.” Orr v. Bank of Am., NT & SA, 285 F.3d 764, 783 (9th Cir. 2002) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). “The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient.” Anderson, 477 U.S. at 252. Moreover, a court views all facts and draws all inferences in the light most favorable to the nonmoving party. Kaiser Cement Corp. v. Fischbach & Moore, Inc., 793 F.2d 1100, 1103 (9th Cir. 1986).


         This Court has previously noted “[t]he Federal Foreclosure Bar prohibits nonconsensual foreclosure of Federal Housing Finance Agency (“FHFA”) assets.” Springland Vill. Homeowners Ass'n. v. Pearman, No. 3:16-cv-00423-MMD-WGC, 2018 WL 357853, at *2 (D. Nev. Jan. 10, 2018) (citing Berezovsky v. Moniz, 869 F.3d 923, 925 (9th Cir. 2017)). “As a result, the Federal Foreclosure Bar generally protects Fannie Mae's property interests from extinguishment if Fannie Mae was under FHFA's conservatorship, possessed an ...

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