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Nationstar Mortgage, LLC v. Residential Land Corporation of Nevada

United States District Court, D. Nevada

May 28, 2019

NATIONSTAR MORTGAGE LLC; FEDERAL NATIONAL MORTGAGE ASSOCIATION, Plaintiffs,
v.
RESIDENTIAL LAND CORPORATION OF NEVADA; LVDG LLC SERIES 107; THE MEADOWS HOMEOWNERS ASSOCIATION, Defendants.

          ORDER

          LARRY R. HICKS UNITED STATES DISTRICT JUDGE

         Plaintiffs Nationstar Mortgage LLC (“Nationstar”) and Federal National Mortgage Association (“Fannie Mae”) move this court for summary judgment pursuant to the Federal Foreclosure Bar, 12 U.S.C. 4617(j)(3). ECF No. 31. Defendants Residential Land Corporation of Nevada (“RLCON”) and LVDG LLC Series 107 (“LVDG”) opposed the motion (ECF No. 39) to which plaintiffs replied (ECF No. 40). Under the federal foreclosure bar and Berezovsky v. Moniz, Fannie Mae's interest in the at-issue property cannot be extinguished by a nonjudicial foreclosure without the consent of the Federal Housing Finance Agency (“FHFA” or “the Agency”). 869 F.3d 923, 930-31 (9th Cir. 2017). Because no consent was given, the court now grants plaintiffs' motion for summary judgment.

         I. BACKGROUND

         This matter arises from a nonjudicial foreclosure sale on real property located at 1207 Tule Drive, Reno Nevada, 89511 (“the property”), conducted under Nevada Revised Statute (“NRS”) § 116.3116 et. seq. ECF Nos. 32-5; 39-6.[1] Jose D. Gomez and Betty V. Gomez (“borrowers”) acquired title to and ownership of the property through a Grant, Bargain and Sale Deed, recorded in the Washoe County Recorder's Office on February 19, 2003. ECF No. 1 ¶ 22. On May 3, 2004, the borrowers obtained a loan and executed a deed of trust securing repayment, designating Wells Fargo Home Mortgage, Inc.[2] as the lender and beneficiary and United Title of Nevada as Trustee, in the amount of $339, 150.00. Id. ¶¶ 24-25; ECF Nos. 32-3; 39-1. The deed of trust was recorded in the Washoe County Recorder's Office on May 7, 2004. ECF No. 1 ¶ 26; ECF Nos. 32-3; 39-1. The property sits in Meadows Homeowners Association (“the HOA”) and is therefore subject to HOA assessments. ECF No. 39 at 3. Plaintiffs alleged and argue that Fannie Mae acquired ownership of the loan on May 19, 2004, and retained Wells Fargo to act as servicer of the loan. ECF No. 1 ¶¶ 29, 32; ECF Nos. 31; 32-4 ¶4.

         After the borrowers failed to pay the HOA assessments that came due, the HOA, through its agent, recorded a Notice of Delinquent Assessment (Lien) against the property on July 5, 2011. ECF No. 1 ¶ 41; ECF Nos. 32-8; 39-2. On September 23, 2011, the HOA recorded a Notice of Default and Election to Sell Under Homeowners Association Lien. ECF No. 32-9; 39-3.

         Approximately one and a half years later, on February 27, 2013, Wells Fargo recorded a Notice of Breach and Default and of Election to Cause Sale of Real Property under Deed of Trust in the Washoe County Recorder's Office on the May 5, 2004 deed of trust. ECF No. 39-4. Along with this Notice, Amalia Nix, the Vice President of Loan Documentation for Wells Fargo, submitted an Affidavit of Authority in Support of Notice of Default and Election to Sell. Id. This affidavit provided that Wells Fargo was the current holder, beneficiary, and servicer of the loan. Id. This affidavit also provided that Fannie Mae was a prior beneficiary; however, the field pertaining to date reads “Not Applicable.” Id.

         The HOA then recorded a Notice of Trustee's Sale on March 13, 2013. ECF Nos. 32-10; 39-5. At the nonjudicial foreclosure sale held on April 4, 2013, LVDG purchased the property for $17, 500; a Trustee's Deed Upon Sale was then recorded on May 2, 2013. ECF Nos. 32-5; 39-6. The property was subsequently conveyed to RLCON by Quitclaim Deed, recorded March 7, 2014. ECF Nos. 32-11; 39-7. Wells Fargo and Freddie Mac argue that at no time did the FHFA consent to this foreclosure.[3] ECF No. 1 ¶ 47; ECF No. 31 at 8.

         Wells Fargo initiated this matter on May 22, 2017, asserting eight causes of action[4] and seeking declaratory relief and quiet title. ECF No. 1. On October 23, 2017, Wells Fargo assigned the Deed of Trust to Nationstar, and it was recorded in the Washoe County Recorder's Office. ECF Nos. 32-12; 39-8. Per stipulation, on February 26, 2018, Nationstar was substituted for Wells Fargo and the caption for this action was amended. ECF No. 24. Also per stipulation, on April 3, 2018, the HOA was dismissed without prejudice. ECF No. 26.

         The instant motion, filed on September 20, 2018, by Nationstar and Fannie Mae, moves this court for summary judgment based on the federal foreclosure bar. ECF No. 31. RLCON and LVDG opposed the motion (ECF No. 39) and plaintiffs replied (ECF No. 40). The court's order as to the pending dispositive motion now follows.

         II. LEGAL STANDARD

         Motion for Summary Judgment Pursuant to Federal Civil Procedure Rule 56

         Summary judgment is appropriate only when the pleadings, depositions, answers to interrogatories, affidavits or declarations, stipulations, admissions, and other materials in the record show that “there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). In assessing a motion for summary judgment, the evidence, together with all inferences that can reasonably be drawn therefrom, must be read in the light most favorable to the party opposing the motion. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); County of Tuolumne v. Sonora Cmty. Hosp., 236 F.3d 1148, 1154 (9th Cir. 2001).

         The moving party bears the initial burden of informing the court of the basis for its motion, along with evidence showing the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). On those issues for which it bears the burden of proof, the moving party must make a showing that is “sufficient for the court to hold that no reasonable trier of fact could find other than for the moving party.” Calderone v. United States, 799 F.2d 254, 259 (6th Cir. 1986); see also Idema v. Dreamworks, Inc., 162 F.Supp.2d 1129, 1141 (C.D. Cal. 2001).

         To successfully rebut a motion for summary judgment, the nonmoving party must point to facts supported by the record which demonstrate a genuine issue of material fact. Reese v. Jefferson Sch. Dist. No. 14J, 208 F.3d 736 (9th Cir. 2000). A “material fact” is a fact “that might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Where reasonable minds could differ on the material facts at issue, summary judgment is not appropriate. See v. Durang, 711 F.2d 141, 143 (9th Cir. 1983). A dispute regarding a material fact is considered genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Liberty Lobby, 477 U.S. at 248. The mere ...


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