This case involved an HOA foreclosures dispute between the purchaser of a property at a foreclosure sale and the Federal Home Loan Mortgage Corporation (FreddieMac) over the validity of FreddieMacs lien on the property that was purchased by the plaintiff in the action. The purchaser contended that the superpriority lien provisions contained in Nevada statutes empowered the foreclosing homeowners association to sell the property free and clear of all other liens or interests, including the interest held by FreddieMac. FreddieMac contended that the purchaser purchased the property subject to its interest in the property because a Federal Foreclosure Bar preempts Nevadas state law that purports to extinguish other interests such as the interest held by FreddieMac. Because FreddieMac had not consented to the associations foreclosure of its lien, the district court concluded that the Federal Foreclosure Bar prevented the extinguishment of FreddieMacs interest in the property upon foreclosure. The purchaser contended that the Federal Foreclosure Bar does not apply to private HOA foreclosures
The appellate court did not agree in holding that, the Federal Foreclosure Bar applies to any property for which the Agency serves as conservator and immunizes such property from any foreclosure without Agency consent. The court further held that the requisite consent an affirmative act and consent could not be implied from a lack of action to prevent the foreclosure sale.
The appellate court ruled that the Federal Foreclosure Bar implicitly demonstrates a clear intent to preempt Nevadas superpriority lien law and because the foreclosure sale in question was conducted without FreddieMacs consent to the relinquishment of its interest in the property, the interest was not extinguished by the sale because the Federal Foreclosure Bar supersedes the Nevada state statutes that provide homeowners associations with superpriority lien status.
PUBLISHED United States Court of Appeals for the Ninth Circuit decision (August 25, 2017).
See case decision: Berezovsky_v._Moniz_(9th_Cir._2017)1