Federal National Mortgage Association v. Hollywood Ranch Homeowners Association et al

Filing 48

ORDER Granting 45 Motion for Summary Judgment. See Order for details/deadlines. Signed by Judge Andrew P. Gordon on 5/3/2018. (Copies have been distributed pursuant to the NEF - MR)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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FEDERAL NATIONAL MORTGAGE
ASSOCIATION,
Plaintiff,

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v.

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HOLLYWOOD RANCH HOMEOWNERS
ASSOCIATION, et al.,

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Case No. 2:17-cv-01900-APG-CWH
ORDER GRANTING MOTION FOR
SUMMARY JUDGMENT
(ECF No. 45)

Defendants.

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This case revolves around whether a deed of trust still encumbers property located at 6505

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Za Zu Pitts Avenue #103 in Las Vegas following a non-judicial foreclosure sale conducted by a

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homeowners association (HOA). Plaintiff Federal National Mortgage Association (Fannie Mae)

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seeks a declaration that the deed of trust continues to encumber the property. Fannie Mae also

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seeks damages if the court rules its deed of trust on the subject property was extinguished by the

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HOA foreclosure sale. I previously dismissed the claims against defendant Hollywood Ranch

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Homeowners Association. ECF No. 46. Fannie Mae has moved for reconsideration of that

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decision. ECF No. 47.
Fannie Mae moves for summary judgment against the current property owners

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(defendants Nohemi Pena, Sarai Santana, Aldo Santana, and Samantha Santana), seeking a

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declaration that the deed of trust continues to encumber the property after the HOA foreclosure

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sale. These defendants have not answered the complaint, have not asserted any defenses, and did

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not oppose Fannie Mae’s summary judgment motion.

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I. BACKGROUND
Nohemi Santana1 purchased the property located at 6505 Za Zu Pitts Avenue #103 in Las

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Vegas, Nevada in 2007 through a loan from First National Bank of Nevada. ECF No. 45-1 at 2.

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That loan was secured by a deed of trust listing Nohemi Santana as the buyer, First National Bank

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of Nevada as the lender, DHI Title as the trustee, and Mortgage Electronic Registration Systems,

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Inc. (MERS) as the beneficiary of record as nominee for the lender and its assigns and successors.

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Id. at 2-3. In September 2007, Fannie Mae purchased the note and deed of trust, and has owned

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them ever since. ECF No. 45-7 at 3.

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In March 2009, Hollywood Ranch recorded a notice of delinquent assessment because

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Nohemi Santana had failed to pay her HOA assessments. ECF No. 45-3. Hollywood Ranch

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recorded a notice of default and election to sell on January 20, 2010. ECF No. 45-4. In August

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2010, MERS assigned the deed of trust to BAC Home Loans Servicing. ECF No. 45-2.

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On August 21, 2012, Hollywood Ranch filed a notice of trustee’s sale, with the sale set for

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September 19, 2012. ECF No. 45-5. The sale took place on that date and the property was sold to

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Hollywood Ranch for $8,263.96. ECF No. 45-6. At the time of the sale, Fannie Mae still owned

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the note and deed of trust, and Bank of America, N.A. was Fannie Mae’s loan servicer. ECF No.

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45-7 at 4. On February 11, 2015, Hollywood Ranch quitclaimed the deed to Nohemi Pena, Sarai

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Santana, Aldo Santana, and Samantha Santana. ECF No. 45-8.

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II. ANALYSIS

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Summary judgment is appropriate if the movant shows “there is no genuine dispute as to

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any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a),

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(c). A fact is material if it “might affect the outcome of the suit under the governing law.”

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Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue is genuine if “the evidence

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is such that a reasonable jury could return a verdict for the nonmoving party.” Id.

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It is unclear whether Nohemi Santana (the former owner) is the same person as Nohemi Pena
(one of the current owners). Regardless, Fannie Mae is entitled to judgment as a matter of law that the
deed of trust still encumbers the property, so joinder of the former homeowner is not necessary because
the HOA sale will not be aside.

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The party seeking summary judgment bears the initial burden of informing the court of the

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basis for its motion and identifying those portions of the record that demonstrate the absence of a

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genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden

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then shifts to the non-moving party to set forth specific facts demonstrating there is a genuine

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issue of material fact for trial. Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 531 (9th Cir.

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2000). I view the evidence and reasonable inferences in the light most favorable to the non-

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moving party. James River Ins. Co. v. Hebert Schenk, P.C., 523 F.3d 915, 920 (9th Cir. 2008).
The federal foreclosure bar in 12 U.S.C. § 4617(j)(3) provides that “in any case in which

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[the Federal Housing Finance Agency (FHFA)] is acting as a conservator,” “[n]o property of

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[FHFA] shall be subject to . . . foreclosure[ ] or sale without the consent of [FHFA].” Fannie Mae

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argues that under the federal foreclosure bar, the HOA sale could not extinguish Fannie Mae’s

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interest in the property because at the time of the sale, FHFA was acting as Fannie Mae’s

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conservator and Fannie Mae owned an interest in the property.
The question of whether the federal foreclosure bar applies to preserve Freddie Mac’s

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interest in this property following the HOA’s foreclosure sale of its superpriority lien is controlled

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by Berezovsky v. Moniz, 869 F.3d 923 (9th Cir. 2017). In that case, the Ninth Circuit held that the

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federal foreclosure bar preempts Nevada law and precludes an HOA foreclosure sale from

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extinguishing Freddie Mac’s interest in property without FHFA’s affirmative consent. Id. at 927-

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31. Additionally, that court accepted as proof of ownership the same type of evidence offered in

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this case. Id. at 932-33.
The defendants offer no evidence raising a genuine dispute about Fannie Mae’s interest,

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and they do not request relief under Federal Rule of Civil Procedure 56(d). Consequently, no

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genuine dispute remains that Fannie Mae owned an interest in the property at the time of the

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HOA foreclosure sale. Under the federal foreclosure bar and Berezovsky, this interest cannot be

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extinguished without FHFA’s consent. I therefore grant Fannie Mae’s motion for summary

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judgment.

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III. CONCLUSION
IT IS THEREFORE ORDERED that plaintiff Federal National Mortgage Association’s

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motion for summary judgment (ECF No. 45) is GRANTED. It is hereby declared that the

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homeowners association’s non-judicial foreclosure sale conducted on September 19, 2012 did not

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extinguish Federal National Mortgage Association’s interest in the property located at 6505 Za Zu

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Pitts Avenue #103 in Las Vegas, Nevada, and thus the property is subject to the deed of trust.

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IT IS FURTHER ORDERED that on or before May 23, 2018, plaintiff Federal National

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Mortgage Association and defendant Hollywood Ranch Homeowners Association shall file a

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joint status report regarding whether, in light of this ruling, the motion to reconsider is moot, and

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whether the case can be closed.
DATED this 3rd day of May, 2018.

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ANDREW P. GORDON
UNITED STATES DISTRICT JUDGE

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