United States District Court, D. Nevada
ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY
JUDGMENT AND DENYING DEFENDANT'S MOTION FOR SUMMARY
JUDGMENT [ECF NOS. 29, 30]
P. GORDON, UNITED STATES DISTRICT JUDGE
a dispute over whether a deed of trust still encumbers
property located at 2807 Mirage Road in Henderson, Nevada.
Plaintiff Federal Home Loan Mortgage Corporation
(“Freddie Mac”) seeks a judicial determination
that its deed of trust still encumbers the property following
a non-judicial foreclosure sale conducted by defendant Green
Valley South Owners Association No. 1 after the prior owners
failed to pay homeowners association (HOA) assessments.
Defendant Mirage Property, LLC is the current owner of the
property. In its complaint, Freddie Mac asserts claims to
determine adverse interests in property under Nevada Revised
Statutes § 40.010 based on the contentions that (1) the
federal foreclosure bar in 12 U.S.C. § 4617(j)(3)
precludes the HOA sale from extinguishing the deed of trust
and (2) the HOA sale violated Freddie Mac's due process
Mac moves for summary judgment based on the federal
foreclosure bar. Mirage opposes the motion, arguing that
Freddie Mac failed to record its interest until after the
foreclosure sale, so the federal foreclosure bar does not
apply. Mirage also contends that the HOA foreclosure sale was
properly conducted so the deed of trust was extinguished;
Chapter 116 does not violate Freddie Mac's due process
rights; there was no fraud, oppression, or unfairness to
support setting aside the HOA sale; and Mirage was a bona
fide purchaser without notice of Freddie Mac's alleged
interest in the property. Mirage moves for summary judgment
on these same grounds.
parties are familiar with the facts so I will not repeat them
here except where necessary to resolve the motions. I grant
Freddie Mac's motion and deny Mirage's motion because
the federal foreclosure bar applies to preserve Freddie
Mac's deed of trust.
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].” Freddie Mac argues that under the federal
foreclosure bar, the HOA sale could not extinguish its
interest in the property because at the time of the sale,
FHFA was acting as Freddie Mac's conservator, Freddie Mac
owned an interest in the property, and FHFA did not consent
to that interest being extinguished through the HOA
resolution of these motions 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. Additionally, that court accepted as proof of
ownership the same type of evidence offered in this case.
Id. at 932-33.
was acting as Freddie Mac's conservator, Freddie Mac
owned the loan at the time of the HOA foreclosure sale, and
FHFA did not affirmatively consent to Freddie Mac's
interest being extinguished. Mirage offers no evidence
raising a genuine dispute as to any of these issues and it
does not request relief under Federal Rule of Civil Procedure
contends that Freddie Mac's property interest is not
enforceable against Mirage because Freddie Mac did not record
its ownership interest prior to the HOA foreclosure sale.
This argument has been rejected by the Supreme Court of
Nevada and the Ninth Circuit because although “Nevada
law requires recording of a lien for it to be enforceable,
” it “does not mandate that the recorded
instrument identify the note owner by name.” Fed.
Home Loan Mortg. Corp. v. SFR Investments Pool 1, LLC,
893 F.3d 1136, 1149 (9th Cir. 2018) (quotation omitted).
“Nevada law thus recognizes that, in an agency
relationship, a note owner remains a secured creditor with a
property interest in the collateral even if the recorded deed
of trust names only the owner's agent.”
Berezovsky, 869 F.3d at 932; see also In re
Montierth, 354 P.3d 648, 650-51 (Nev. 2015) (en banc)
(holding that a note remains fully secured by a deed of trust
when the record deed of trust beneficiary is in an agency
relationship with the note holder); CitiMortgage, Inc. v.
TRP Fund VI, LLC, No. 71318, 435 P.3d 1226, 2019 WL
1245886, at *1 (Nev. Mar. 14, 2019).
Mac has presented evidence that Nationstar was both the
beneficiary of record and Freddie Mac's loan servicer at
the time of the HOA sale. ECF Nos. 29-2 at 4; 29-3; 29-8 at
2. The defendants do not present any contrary evidence.
Additionally, the recorded deed of trust in this case states
it is a “Fannie Mae/Freddie Mac UNIFORM
INSTRUMENT.” ECF No. 29-1. Mirage thus had record
notice that Freddie Mac might own the loan. JPMorgan
Chase Bank, N.A. v. GDS Fin. Servs., No.
2:17-cv-02451-APG-PAL, 2018 WL 2023123, at *3 & n.1 (D.
Nev. May 1, 2018); TRP Fund VI, LLC, 2018 WL
1245886, at *1. Further, because the federal foreclosure bar
(1) preserves Freddie Mac's interest by operation of law
rather than through a written instrument and (2)
“preserves a pre-existing interest” rather than
creating or transferring an interest, it “does not
require recording.” Bank of Am., N.A. v. SFR
Investments Pool 1, LLC, 427 P.3d 113, 119-20 (Nev.
2018) (en banc) (concluding that valid tender of the
superpriority amount did not need to be recorded for these
Mirage's status as a bona fide purchaser is irrelevant
because “Nevada's law on bona fide purchasers is
preempted by the federal foreclosure bar.” GDS Fin.
Servs., 2018 WL 2023123, at *3. I therefore grant
Freddie Mac's motion and deny Mirage's motion.
Defendant Green Valley South Owners Association did not
participate in the briefing on this matter, but it is no
longer a necessary party to the pending claims because the
HOA sale will not be unwound. I therefore dismiss it.
THEREFORE ORDERED that plaintiff Federal Home Loan Mortgage
Corporation's motion for summary judgment (ECF
No. 29) is GRANTED. The clerk of court is instructed
to enter judgment in favor of plaintiff Federal Home Loan
Mortgage Corporation and against defendant Mirage Property,
LLC as follows: It is hereby declared that the homeowners
association's non-judicial foreclosure sale conducted on
February 7, 2014 did not extinguish Federal Home Loan
Mortgage Corporation's interest in the property located
at 2807 Mirage Road, Henderson, Nevada 89074, and thus the
property is subject to the deed of trust.
FURTHER ORDERED that defendant Mirage Property, LLC's
motion for summary ...