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Federal National Mortgage Association v. Haus

United States District Court, D. Nevada

September 30, 2019

FEDERAL NATIONAL MORTGAGE ASSOCIATION, Plaintiff,
v.
RON HAUS; EVA BEROU; and LOS PRADOS COMMUNITY ASSOCIATION, Defendants.

          ORDER

          RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         Before the Court is Plaintiff Federal National Mortgage Association's Motion for Summary Judgment. ECF No. 26. For the following reasons, the Court grants Plaintiff's motion.

         II. PROCEDURAL BACKGROUND

         Plaintiff Federal National Mortgage Association (“Fannie Mae”) sued Defendants Ron Haus, Eva Berou, and Los Prados Community Association (“the HOA”) on June 26, 2017. ECF No. 1. Fannie Mae seeks declaratory relief that a nonjudicial foreclosure sale conducted in 2013 under Chapter 116 of the Nevada Revised Statutes (“NRS”) did not extinguish Fannie Mae's interest in a Las Vegas property. Id. To obtain the relief, Fannie Mae asserts five claims in the Complaint: (1) declaratory relief under 12 U.S.C. § 4617(j)(3) against Haus and Berou; (2) quiet title under 12 U.S.C. § 4617(j)(3) against Haus and Berou; (3) declaratory relief under the Fifth and the Fourteenth Amendments to the United States Constitution against all Defendants; (4) quiet title under the Fifth and the Fourteenth Amendments to the United States Constitution against Haus and Berou; and (5) permanent and preliminary injunction against Haus and Berou. Id. The HOA answered the Complaint on October 11, 2017, and Haus and Berou answered the Complaint on January 12, 2018. ECF Nos. 14, 16.

         Fannie Mae now moves for summary judgment. ECF No. 26. The HOA opposed the motion as did Haus and Berou. ECF Nos. 27, 28. Fannie Mae filed a single reply. ECF No. 29. On July 23, 2019, the Federal Housing Finance Agency filed an amicus in support of Plaintiff's summary judgment motion.

         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 5208 Las Cruces Drive, Las Vegas, Nevada 89130 (the “property”). The property sits in a community governed by the HOA. The HOA requires its community members to pay HOA dues.

         Nonparty Karen A. Cosner borrowed funds from First Magnus Financial Corporation to purchase the property in 2006. To obtain the loan, Cosner executed a promissory note and a corresponding deed of trust to secure repayment of the note. The deed of trust, which lists Cosner as the borrower, First Magnus Financial Corporation as the lender, and Mortgage Electronic Registration Systems, Inc., (“MERS”) as the beneficiary, was recorded on October 9, 2006. MERS recorded an assignment of the deed of trust to Nationstar. On January 15, 2013, Nationstar executed an assignment of the deed of trust to Fannie Mae.

         Cosner fell behind on HOA payments. From May 2012 through November 2012, the HOA, through its agent, recorded a notice of delinquent assessment lien, followed by a notice of default and election to sell and then a notice of foreclosure sale. On March 29, 2013, the HOA held a foreclosure sale on the property under NRS Chapter 116. Defendants Ron Haus and Eva Berou purchased the property at the foreclosure sale. A foreclosure deed in favor of the Buyers was recorded on April 4, 2013.

         However, Federal National Mortgage Association (“Fannie Mae”) previously purchased the note and the deed of trust in November 2006. While its interest was never recorded under its name, Fannie Mae continued to maintain its ownership of the note and the deed of trust at the time of the foreclosure. Nationstar serviced the note and was listed as the beneficiary of the deed of trust, on behalf of Fannie Mae, at the time of the foreclosure.

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

The servicer ordinarily appears in the land records as the mortgagee to facilitate performance of the servicer's contractual responsibilities, including (but not limited to) the receipt of legal notices that may impact Fannie Mae's lien, such as notices of foreclosure, tax, and other liens. However, Fannie Mae may take any and all action with respect to the mortgage loan it deems necessary to protect its ... ownership of the mortgage loan, including recordation of a mortgage assignment, or its legal equivalent, from the servicer to Fannie Mae or its designee. In the event that Fannie Mae determines it necessary to record such an instrument, the servicer must assist Fannie Mae by [ ] preparing and ...

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