Source: http://openjurist.org/611/f2d/1229
Timestamp: 2015-07-31 01:31:12
Document Index: 8662716

Matched Legal Cases: ['§ 1331', '§ 1716', '§ 846', '§ 1716', '§ 1723', '§ 1717', '§ 1722', '§ 1717', '§ 1701']

611 F2d 1229 Warren v. Government National Mortgage Association | OpenJurist
611 F. 2d 1229 - Warren v. Government National Mortgage Association Home
611 F2d 1229 Warren v. Government National Mortgage Association 611 F.2d 1229
Vivian WARREN, Appellant,v.GOVERNMENT NATIONAL MORTGAGE ASSOCIATION et al., Appellees.
No. 79-1244.
Submitted Oct. 10, 1979.Decided Jan. 2, 1980.Rehearing Denied Jan. 29, 1980.
James L. Muller, Legal Aid of Western Missouri, Kansas City, Mo., for appellant.
Alan E. South, Crews, Milliard & South, Kansas City, Mo., for appellees.
This is an appeal by Vivian Warren (plaintiff) from a final judgment in favor of Government National Mortgage Association (GNMA), holding no violation of her fifth amendment rights resulting from an extra-judicial foreclosure under a deed of trust. In her complaint, predicated principally under 28 U.S.C. § 1331 (federal question), plaintiff sought declaratory and mandamus relief.1
Plaintiff and her husband2 were the owners of a residence in Kansas City, Missouri, which they purchased in August of 1966 from the United States Department of Housing and Urban Development (HUD). As part of the purchase price, they executed a note, secured by a deed of trust, to the Federal National Mortgage AssociationMA. Thereafter, by Congressional Act, FNMA was converted into GNMA, a private corporation wholly-owned by the federal government. 12 U.S.C. § 1716 Et seq. Plaintiff's note and deed of trust were transferred and assigned to GNMA. The deed of trust included a "Power of Sale" clause,3 which in the event of default permitted the trustee to initiate an extrajudicial foreclosure sale in accordance with Missouri statutory procedures.4
In September of 1970, the successor trustee under the deed of trust a private attorney retained by GNMA and not otherwise employed by the federal government mailed a letter, first class not registered nor certified receipt, to the plaintiff and her husband, notifying them that GNMA deemed the payments on the note to be in default and that, as holder of the note, GNMA had elected to declare the entire principal due. The letter, therefore, demanded payment of the entire balance but contained no mention or threat of foreclosure by a trustee's sale. For whatever reasons,5 plaintiff made no response to the letter.
Thereafter, GNMA foreclosed against plaintiff by causing the trustee to advertise in a newspaper, used almost exclusively for such legal notices, and to conduct a public sale, all in compliance with the power of sale clause in the deed of trust. GNMA was the purchaser at this sale.
After the foreclosure sale, plaintiff was notified by letter of the sale and demand was made for possession on or before October 26, 1970. She did not vacate the premises and GNMA brought an action for unlawful detainer in the Missouri Magistrate's Court, securing a judgment in that case on January 11, 1971. GNMA secured possession of the property by a writ of restitution on or about April 7, 1971.
Plaintiff's challenge rests essentially on her contention that she was denied fifth amendment due process rights to notice and hearing Prior to the foreclosure sale.6 We affirm on the basis of no federal government action.
The Due Process Clause of the Fifth Amendment to the United States Constitution provides that: "No person shall . . . be deprived of . . . property, without due process of law; . . . " It applies to federal government not private action, Public Utilities Comm'n v. Pollak, 343 U.S. 451, 461, 72 S.Ct. 813, 96 L.Ed. 1068 (1952); while the fourteenth amendment due process clause applies to the states, See, e. g., Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 172-73, 92 S.Ct. 1965, 32 L.Ed.2d 627 (1972); Shelley v. Kraemer, 334 U.S. 1, 13, 68 S.Ct. 836, 92 L.Ed. 1161 (1948). The standard for finding federal government action under the fifth amendment is the same as that for finding state action under the fourteenth amendment. See, e. g., Geneva Towers Tenants Org. v. Federated Mortgage Investors, 504 F.2d 483, 487 (9th Cir. 1974); Ponce v. Housing Authority of Tulare County, 389 F.Supp. 635, 648 (E.D.Cal.1975). That standard is that there must exist "a sufficiently close nexus between the (government) and the challenged action of the regulated entity so that the action of the latter may be fairly treated as that of the (government) itself." Jackson v. Metropolitan Edison Co., 419 U.S. 345, 351, 95 S.Ct. 449, 453, 42 L.Ed.2d 477 (1974).
It is undisputed in this case that GNMA is a corporate entity, wholly-owned by the federal government, 31 U.S.C. § 846. It was created by the partition of the FNMA under the National Housing Act of 1968, 12 U.S.C. § 1716 Et seq., and is under the management and control of the Secretary of HUD, 12 U.S.C. §§ 1723(a) & 1723a(d). It has no capital stock, 12 U.S.C. § 1717(a)(2)(A). The economic benefits and burdens of its administration inure to the Secretary of the Treasury, 12 U.S.C. § 1722. Moreover, under 12 U.S.C. § 1717(b)(1), it is authorized to purchase, service, sell or otherwise deal in mortgages insured under 12 U.S.C. §§ 1701-1750g by the Federal Housing Authority (FHA).