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Nationstar Mortgage LLC v. Copper Creek Homeowners Association

United States District Court, D. Nevada

September 29, 2019

NATIONSTAR MORTGAGE LLC, FEDERAL HOME LOAN MORTGAGE CORPORATION, Plaintiff(s),
v.
COPPER CREEK HOMEOWNER ASSOCIATION, TRAVERTINE LANE TRUST ATC ASSESMENT COLLECTION GROUP, LLC Defendant(s).

          ORDER

          RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE.

         I. INTRODUCTION

         Before the Court is Defendant Travertine Lane Trust’s Second Motion to Dismiss Complaint, Defendant Travertine Lane Trust’s Motion for Summary Judgment, and Plaintiffs Federal Home Loan Mortgage Corporation and National Star Mortgage LLC’s Counter Motion for Summary Judgment. ECF Nos. 35, 38, 40. For the following reasons, the Court grants Plaintiffs’ Motion for Summary Judgment and denies the other motions.

         II. PROCEDURAL BACKGROUND

         Plaintiffs Nationstar Mortgage LLC (“Nationstar”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”) (collectively “Plaintiffs”) filed their complaint against Defendants Copper Creek Homeowners Association, Travertine Lane Trust (“Travertine”), and ATC Assessment Collection Group, LLC on October 9, 2017. ECF No. 1. In their complaint, Plaintiffs stated eight causes of action: 1) declaratory relief under 12 U.S.C. § 4617(j)(3); 2) quiet title under 12 U.S.C. § 4617(j)(3); 3) declaratory relief under the Fifth and Fourteenth Amendments; 4) quiet title under the Fourth and Fifth Amendments; 5) a declaratory judgment; 6) breaches of section 116.1113 of the Nevada Revised Statutes (“NRS”) and Covenants, Conditions and Restrictions (“CCR&Rs”), 7) wrongful foreclosure, and 8) injunctive relief. On March 30, 2018, the action was dismissed without prejudice as to ATC Assessment Collection Group, LLC and Copper Creek Homeowners Association. ECF No. 20.

         Plaintiffs filed a motion for summary judgment on May 7, 2018. ECF No. 22. Travertine filed for summary judgment on June 6, 2018. ECF No. 26. On July 13, 2018 the Court stayed the case pending the Nevada Supreme Court’s response to a question this Court certified regarding the notice requirements of NRS 116. The Court also denied all pending dispositive motions without prejudice. ECF No. 32. The Court lifted the stay on August 23, 2018 and ordered that all dispositive motions be filed no later than September 24, 2018. ECF No. 34. On September 5, 2018, Travertine filed a second motion to dismiss the complaint. ECF No. 35. Travertine also filed a motion for summary judgment on October 3, 2018. ECF No. 38. Plaintiffs filed a counter motion for summary judgment on October 3, 2018. ECF No. 40. All motions have been fully briefed. ECF Nos. 39, 41– 43, 45, 46. On July 23, 2019, Movant Federal Housing Finance Agency filed an amicus curiae brief in support of Plaintiffs’ counter motion. ECF No. 51.

         III. FACTUAL BACKGROUND

         The Court makes the following findings of undisputed and disputed facts.[1]

         a. Undisputed Facts

         This matter concerns a nonjudicial foreclosure on a property located at 6777 Travertine Lane, Las Vegas, NV 89122 (the “property”). The property sits in a community governed by the Copper Creek Homeowners Association (the “HOA”). The HOA requires its community members to pay HOA dues.

         On or about October 18, 2008, nonparty Alberto Marin obtained a loan from Taylor, Bean & Whittaker Mortgage Corp. in the amount of $218, 000. The deed of trust was recorded against the property. The deed listed Alberto Marin as the borrower, Taylor, Bean & Whittaker Mortgage Corp. as the lender, and Mortgage Electronic Registration Systems, Inc. (“MERS”) as the beneficiary.

         Marin fell behind on HOA dues. The HOA, through its agent, recorded a notice of delinquent assessment lien, followed by a notice of default and election to sell, and finally a notice of foreclosure sale on October 11, 2012. On or about November 6, 2012, the HOA held a foreclosure sale of the property under NRS Chapter 116. Travertine purchased the property as evidenced by a trustee’s deed upon sale recorded on November 26, 2012.

         However, Freddie Mac previously purchased the note and deed of trust in November 2007. While its interest was never recorded under its name, Freddie Mac continued to maintain its ownership of the note and the deed of trust at the time of the foreclosure. At the time of the foreclosure sale, Ocwen served as the record beneficiary of the deed of trust as servicer for Freddie Mac. Ocwen then assigned the deed of trust to Nationstar as recorded on June 3, 2013.

         The relationship between Freddie Mac and its servicers is governed by Freddie Mac ’s Single-Family Servicing Guide (“the Guide”). The Guide provides that servicers may act as record beneficiaries for deeds of trust owned by Freddie Mac. It also requires that servicers assign the deeds of trust to Freddie Mac on Freddie Mac ’s demand. The Guide states:

The Seller/Servicer is not required to prepare an assignment of the Security Instrument to the Federal Home Loan Mortgage Corporation (Freddie Mac). However, Freddie Mac may, at its sole discretion and at any time, require a Seller/Servicer, at the Seller/Servicer’s expense, to prepare, execute ...

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