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Bank of America, N.A. v. Madeira Canyon Homeowners Association SFR Investments Pool 1, LLC

United States District Court, D. Nevada

November 12, 2019

BANK OF AMERICA, N.A., FEDERAL NATIONAL MORTGAGE ASSOCIATION, Plaintiff,
v.
MADEIRA CANYON HOMEOWNERS ASSOCATION SFR INVESTMENTS POOL 1, LLC NEVADA ASSOCIATION SERVICES, INC, Defendants.

          ORDER

          RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         Before the Court are Plaintiffs Bank of America, N.A (“BANA”) and Federal National Mortgage Association's (“Fannie Mae”) Motion for Partial Summary Judgment, and Defendant SFR Investments Pool 1, LLC's (“SFR”) Motion for Summary Judgment. ECF Nos. 36, 44. For the following reasons, the Court denies BANA and Fannie Mae's Motion for Partial Summary Judgment and grants SFR's Motion for Summary Judgment.

         II. PROCEDURAL BACKGROUND

         BANA and Fannie Mae sued Defendants Madeira Canyon Homeowners Association (“the HOA”), SFR Investments Pool 1, LLC (“SFR”) and Nevada Association Services, Inc. (“NAS”) on May 10, 2016. ECF No. 1. Plaintiffs seek 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, Plaintiffs assert the following claims in the Complaint: (1) declaratory relief under 28 U.S.C. § 2201 against SFR; (2) quiet title against SFR; (3) breach of NRS 116.1113 as against the HOA and NAS; (4) wrongful foreclosure against the HOA and NAS; and (5) injunctive relief against SFR. Id. NAS answered the complaint on June 3, 2016. ECF No. 7. On August 25, 2016, the Court administratively stayed the case pending the mandate of Bourne Valley Court Trust v. Wells Fargo Bank. 832 F.3d 1154 (9th Cir. 2016), cert denied 137 S.Ct. 2296 (2017) . On April 8, 2019, the Court lifted the stay. ECF No. 30. SFR filed its answer on July 2, 2019. ECF No. 38.

         On June 24, 2019, Plaintiffs moved for summary judgment. ECF No. 36. The motion was fully briefed. ECF Nos. 46, 48. SFR also moved for summary judgment. ECF No. 44. That motion was also fully briefed. ECF Nos. 45, 49.

         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 2673 Rimbaud Street, Henderson, Nevada 89044 (the “property”). The property sits in a community governed by the HOA. The HOA requires the community members to pay community dues.

         Nonparty Ronaldo A. Bumbasi borrowed funds from Pulte Mortgage LLC to purchase the property in 2006. To obtain the loan, Bumbasi executed a promissory note and a corresponding deed of trust to secure repayment of the note. The deed of trust, which lists Bumbasi as the borrower, Pulte Mortgage LLC as the lender, Lawyers Title of Nevada as the original trustee, and Mortgage Electronic Registration Systems, Inc. (“MERS”) as the original beneficiary was recorded on November 30, 2006. MERS substituted nonparty Recontrust Company as trustee under the deed of trust as recorded on October 2, 2008. On July 12, 2010 MERS assigned the Senior Deed of Trust to BAC Home Loans Servicing, LP fka Countrywide Home Loans Servicing.

         Bumbasi failed to pay the required HOA dues or his required loan payments. On October 16, 2008, a notice of default and election to sell under deed of trust was recorded. The notice stated that MERS, as beneficiary of record, had executed and delivered to Recontrust Company a written declaration of default and demand for sale, based on Bumbasi's “failure to pay the installment of principal, interest and impound which became due on 07/01/2008” and “does hereby declare all sums secured thereby immediately due and payable.” On November 5, 2010, a rescission of election to declare default was recorded that stated as follows:

“Recontrust Company, N.A., acting as an agent . . . does hereby rescind, cancel and withdraw the Notice of Default and Election to Sell . . . provided however, that this rescission shall not be construed as waiving, curing, extending to, or affecting any default, either past, present or future . . . and it . . . shall be deemed . . .only an election without prejudice not to cause a sale to be made.”

         From September 10, 2009 through March 2013, a notice of delinquent assessment lien, a notice of default and election to sell, and a notice of foreclosure sale were all recorded by the HOA. On May 10, 2013 SFR purchased the property for $18, 000. On June 4, 2019, a second notice of rescission of notice of default and election to sell under deed of trust was recorded. This rescission notice provided that the present beneficiary “does hereby rescind, cancel, withdraw and revoke without prejudice the acceleration of the Note, or Deed of Trust, or both, as referenced in ...


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