Court Opinion

ID: 4695337
Source: CourtListenerOpinion
Date Created: 2021-06-14 20:03:00.936803+00
Date Added: 2024-06-11T08:05:33.663858
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        JUN 14 2021
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

DITECH FINANCIAL LLC; FEDERAL                   No.    20-15526
NATIONAL MORTGAGE
ASSOCIATION,                                    D.C. No.
                                                2:16-cv-02812-JAD-NJK
                Plaintiffs-Appellees,

 v.                                             MEMORANDUM*

T-SHACK, INC.,

                Defendant-Appellant.

                   Appeal from the United States District Court
                             for the District of Nevada
                   Jennifer A. Dorsey, District Judge, Presiding

                             Submitted June 7, 2021**
                               Pasadena, California

Before: GRABER, CALLAHAN, and FORREST, Circuit Judges.

      Defendant T-Shack, Inc., timely appeals the summary judgment in favor of

Plaintiffs Ditech Financial LLC ("Ditech") and Federal National Mortgage

Association ("Fannie Mae"). In 2013, Defendant purchased a property in Nevada

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
at a foreclosure sale by a homeowners association ("HOA"). The district court

held that, at the time of the sale, Fannie Mae had a secured property interest and

that, by operation of the Federal Foreclosure Bar, 12 U.S.C. § 4617(j)(3), the sale

did not extinguish the deed of trust. The court declared that Defendant owns the

property subject to the deed of trust. Reviewing de novo, Berezovsky v. Moniz,

869 F.3d 923, 927 (9th Cir. 2017), we affirm.

      Under Nevada law, a foreclosure by an HOA may, in some circumstances,

extinguish an existing deed of trust. See generally Bank of Am., N.A. v. Arlington

W. Twilight Homeowners Ass’n, 920 F.3d 620, 621–22 (9th Cir. 2019) (per

curiam). But the Federal Foreclosure Bar preempts that result where, at the time of

sale: (1) Fannie Mae or the Federal Home Loan Mortgage Company ("Freddie

Mac") has a secured interest in the property; (2) those organizations are under

conservatorship by the Federal Housing Finance Agency ("Agency"); and (3) the

Agency has not consented to the foreclosure sale. 12 U.S.C. § 4617(j)(3);

Berezovsky, 869 F.3d at 928–31; Saticoy Bay LLC Series 9641 Christine View v.

FNMA, 417 P.3d 363, 367–68 (Nev. 2018) (en banc).

      1. The district court correctly held that no genuine issue of material fact

exists as to Fannie Mae’s property interest at the time of the foreclosure sale in

2013. Business records and sworn declarations by employees of Fannie Mae and

Ditech sufficiently establish that, in 2013, Fannie Mae owned the note. Nationstar

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Mortg. LLC v. Saticoy Bay LLC, Series 9229 Millikan Ave., 996 F.3d 950, 956

(9th Cir. 2021). Additionally, Fannie Mae’s Servicing Guide requires the servicer

to prepare and record a mortgage assignment whenever requested by Fannie Mae,

thus establishing the requisite principal-agency relationship such that Fannie Mae

possessed a secured property interest under Nevada law. Id. Both we and the

Nevada Supreme Court have rejected the argument, advanced by Defendant here,

that Fannie Mae’s interest must be recorded. Id. at 957; Daisy Tr. v. Wells Fargo

Bank, N.A., 445 P.3d 846, 849 (Nev. 2019) (en banc).

       2. At the time of the foreclosure sale in 2013, Fannie Mae and Freddie Mac

were under conservatorship. Nationstar, 996 F.3d at 955–56.

       3. The district court correctly held that no genuine issue of material fact

exists as to whether the Agency has consented to the foreclosure sale. The Agency

has declared publicly that it has not consented to any foreclosure by an HOA,

Statement on HOA Super-Priority Lien Foreclosures (Apr. 21, 2015),

https://www.fhfa.gov/Media/PublicAffairs/Pages/Statement-on-HOA-Super-

Priority-Lien-Foreclosures.aspx, and Defendant has not introduced any evidence to

the contrary. See Berezovsky, 869 F.3d at 929 (holding that the Federal

Foreclosure Bar "cloaks Agency property with Congressional protection unless or

until the Agency affirmatively relinquishes it"); accord Christine View, 417 P.3d at

368.

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      4. The Federal Foreclosure Bar does not violate a purchaser’s right to due

process. Fed. Home Loan Mortg. Co. v. SFR Invs. Pool 1, LLC, 893 F.3d 1136,

1147–51 (9th Cir. 2018).

      AFFIRMED.

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