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Bank of America, N.A. v. Loretto Bay Master Association

United States District Court, D. Nevada

November 12, 2019

BANK OF AMERICA, N.A., Plaintiff,




         Before the Court is Plaintiff Bank of America, N.A.'s (“BANA”) Motion for Partial Summary Judgment (ECF No. 27). For the following reasons, the Court grants BANA's motion.


         Plaintiff BANA filed its complaint against Defendants Absolute Collection Services LLC (“Absolute”) and Loretto Bay Master Association (“Loretto” or “HOA”) on September 16, 2016. ECF No. 1. BANA filed a notice of lis pendens on that same date. ECF No. 3 Absolute filed its answer on October 11, 2016. ECF No. 9. Loretto filed its answer on December 22, 2016. ECF No. 15. On April 6, 2017, the Court granted the parties' joint motion to stay litigation pending final resolution of petitions for writ of certiorari to the United State Supreme Court in the Bourne Valley and Saticoy Bay cases respectively. Bourne Valley Court Tr. v. Wells Fargo Bank, N.A., 832 F.3d 1154 (9th Cir. 2016), cert denied 137 S.Ct. 2296 (2017); Saticoy Bay LLC Series 350 Durango 104 v. Wells Fargo Home Mortg., 388 P.3d 970 (Nev. 2017). ECF No. 20. On April 8, 2019, the Court lifted the stay. ECF No. 26. BANA filed its motion for partial summary judgment on May 13, 2019. ECF No. 27. The motion was fully briefed. ECF Nos. 30, 31.


         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 50 Aura De Blanco Street, # 13103, Henderson, NV 89074 (the “property”). The property sits in a community governed by the HOA. The HOA requires its community members to pay HOA dues Nonparties Jesus Ricardo Diaz and Alejandra Ines Rossignoli borrowed funds from listed CCSF, LLC dba Greystone Financial Group to purchase the property in 2007. To obtain the loan, Diaz and Rossignoli executed a promissory note and a corresponding deed of trust to secure repayment of the note. The deed of trust, which lists Diaz and Rossignoli as borrowers, CCSF, LLC dba Greystone Financial Group as lender and Mortgage Electronic Registration Systems, Inc., (“MERS”) as beneficiary, was recorded on February 20, 2007. MERS subsequently assigned its interest under the deed of trust to BAC Home Loans Servicing, LP fka Countrywide Home Loans Servicing, LP (“BAC). BANA became successor by July 1, 2011 de jure merger with BAC.

         Diaz and Rossignoli fell behind on their HOA payments. From January 14, 2013 through September 2013, 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 sale against the property. On September 17, 2013, a foreclosure sale occurred and on behalf of the HOA and sold the property to the HOA, which paid $4, 900 for the Property as recorded on September 23, 2013.

         However, Fannie Mae previously purchased the note and the deed of trust in March 2007. 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 sale. At the time of the sale, BANA was the servicer of the loan for Fannie Mae. As of July 27, 2017, BANA remains the record beneficiary and Fannie Mae remains the owner of the loan.

         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 recording any required documentation, such as mortgage assignments, powers of attorney, or affidavits; and [by] providing recordation information for the affected mortgage loans.

         The Guide also allows for a temporary transfer of possession of the note when necessary for servicing activities, including “whenever the servicer, acting in its own name, represents the interests of Fannie Mae in ... legal proceedings.” The temporary transfer is automatic and occurs at the commencement of the servicer's representation of Fannie Mae. The Guide also includes a chapter regarding how servicers should manage litigation on behalf of Fannie Mae. But the Guide clarifies that “Fannie Mae is at all times the owner of the mortgage note[.]” Finally, under the Guide, the servicer ...

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