Lexology-

Given the significant role Fannie Mae and Freddie Mac have in the national housing market, it is unsurprising that both have become embroiled in the Nevada HOA super-priority lien litigation. Since July 2008 – well before the Nevada Supreme Court held that an HOA’s foreclosure on its super-priority lien could extinguish a first deed of trust – Fannie Mae and Freddie Mac have been in the conservatorship of the Federal Housing Finance Agency (FHFA). The Housing and Economic Recovery Act of 2008 (Federal Foreclosure Bar), which created FHFA, includes a provision commonly referred to as the Federal Foreclosure Bar, which provides that FHFA’s property shall not be subject to foreclosure without FHFA’s consent. Fannie Mae and Freddie Mac, as well as loan servicers acting on their behalf, have long argued that the Federal Foreclosure Bar preempts the Nevada HOA super-priority lien statute and prevents HOA foreclosure sales from extinguishing the interests of Fannie Mae and Freddie Mac. While the Ninth Circuit already held that the Federal Foreclosure Bar preempts Nevada’s HOA super-priority lien statute, the Nevada Supreme Court had not weighed in until now. On March 21, 2018, the Nevada Supreme Court released a unanimous, en banc opinion in Saticoy Bay LLC Series 9641 Christine View v. Federal National Mortgage Association, siding with the Ninth Circuit on federal preemption.

[LEXOLOGY]

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