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Ditech Financial LLC v. Las Vegas Development Group, LLC

United States District Court, D. Nevada

September 3, 2019




         I. SUMMARY

         This matter arises from a non-judicial foreclosure sale (“HOA Sale”) of real property located at 10760 Serratina Drive, Reno, Nevada 89521 (“Property”) to satisfy a homeowners' association lien. Before the Court is Plaintiff Ditech Financial LLC f\k\a Green Tree Servicing LLC's motion for partial summary judgment (“Motion”). (ECF No. 65.) The dispositive issue is whether Plaintiff's first deed of trust was protected from being extinguished by the HOA Sale due to 12 U.S.C. § 4617(j)(3) (“Federal Foreclosure Bar”) acting to protect the Federal National Mortgage Association's (“Fannie Mae”) property interest. Because the Court finds the Federal Foreclosure Bar applies here, the Court will grant Plaintiff's Motion.[1]


         The following facts are undisputed unless otherwise indicated.

         In October 2006, George Florit and Betty Jo Mears (“Borrowers”) obtained a loan (“Loan”) from Bank of America, N.A. (“Lender”) for $325, 200. (ECF No. 65-2 at 3.) The Loan was secured by a deed of trust (“DOT”) recorded against the Property. (Id. at 1-2.) The Property is part of a community administered by the Dorado Homeowners' Association (the “HOA”). (ECF Nos. 1 at 2, 65-6 at 2.)

         Plaintiff has provided the affidavit of Fannie Mae's Assistant Vice President, Graham Babin, and Fannie Mae's business records accompanying Babin's declaration, evidencing that Fannie Mae purchased the Loan in July 2009, and thereby obtained the Lender's property interest in the DOT. (ECF No. 65-3 at 3-4, 7.) On June 3, 2013, Lender recorded an assignment of the DOT to Green Tree Servicing LLC. (ECF No. 65-5 at 2.)

         The Borrowers failed to pay HOA assessments. The HOA, through its agent Nevada Association Services, Inc. (“NAS”), recorded a notice of delinquent assessment lien on January 28, 2011, and a notice of default and election to sell on March 23, 2011. (ECF Nos. 65-6, 65-7.) A foreclosure deed was recorded on June 28, 2013, providing that the Property was sold at the HOA Sale to Defendant Las Vegas Development Group, LLC (“LVDG”) for $6, 200 on June 20, 2013. (ECF No. 65-9.) A grant deed from LVDG to Thunder Properties Inc. (“Thunder”) was recorded on July 22, 2015. (ECF No. 65-10.)

         Fannie Mae maintained ownership of the Loan at the time of the HOA Sale. (ECF No. 65-3 at 3-4, 7.) Plaintiff, then known as Green Tree Servicing LLC, was Fannie Mae's loan servicer at that time, and is the current servicer of the Loan. (ECF Nos. 65-5, 65-3 at 3-4, 7.)

         Plaintiff filed the Complaint on June 20, 2016, asserting the following five claims for relief: (1) declaratory judgment against Thunder based on the Federal Foreclosure Bar; (2) declaratory judgment against all defendants based on a due process argument; (3) quiet title against Thunder; (4) breach of NRS § 116.1113 against the HOA[2] and NAS; (5) wrongful foreclosure against the HOA and NAS; and (6) injunctive relief against Thunder. (ECF No. 1.) ///


         “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. See 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. See Kaiser Cement Corp. v. Fischbach & Moore, Inc., 793 F.2d 1100, 1103 (9th Cir. 1986).

         IV. ...

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