HOA Lien Update Michelle A Mierzwa, Esq. Partner Compliance - - PowerPoint PPT Presentation
Nevada HOA Lien Update Michelle A Mierzwa, Esq. Partner Compliance Division Wright Finlay & Zak, LLP mmierzwa@wrightlegal.net The views expressed in this Presentation should not be relied on as legal advice. Please consult your own
The views expressed in this Presentation should not be relied on as legal advice. Please consult your own counsel before relying on any information provided in this Session.
mmierzwa@wrightlegal.net
NRS 116.3116 (2) – an HOA’s lien is “prior to all other liens and encumbrances on a unit” except for “(b) a first security interest on the unit recorded before the date on which the assessment sought to be enforced became delinquent…”
However, the HOA lien is “prior to all security interests described in (b)… to the extent of the assessments for [HOA dues] … which would have become due in the absence of acceleration during the 9 months (6 months for Fannie or Freddie) immediately preceding institution of an action to enforce the lien…”
The views expressed in this Presentation should not be relied on as legal advice. Please consult your own counsel before relying on any information provided in this Session.
The views expressed in this Presentation should not be relied on as legal advice. Please consult your own counsel before relying on any information provided in this Session.
The views expressed in this Presentation should not be relied on as legal advice. Please consult your own counsel before relying on any information provided in this Session.
expressly require notice be given to the lender (until October 1, 2015).
expressly provide any right for the lender to obtain the lien payoff amount (until October 1, 2013).
Identify if other items than assessments were part of the super- priority lien.
require the HOA or its Trustee to state the super-priority and the sub- priority amounts (until October 1, 2015).
require the HOA or its Trustee to accept the super-priority amount or release the lien (until October 1, 2015).
require the HOA or its Trustee to accept any payment by the lender (until October 1, 2015).
permit the lender to collect HOA dues as part of an escrow account (until October 1, 2013).
The views expressed in this Presentation should not be relied on as legal advice. Please consult your own counsel before relying on any information provided in this Session.
The HOA Sale had in fact complied with the notice requirements of the Statute.
The recitals of the Foreclosure Deed regarding notice are conclusive.
Tender of the super-priority amount is sufficient to void sale.
The Statute met due process requirements.
The HOA Sale was commercially reasonable.
Mortgage Savings Clauses in CC&Rs recorded before the Statute went into effect (1/1/1992) are valid.
The decision should be applied retroactively for NOSs before decision.
The views expressed in this Presentation should not be relied on as legal advice. Please consult your own counsel before relying on any information provided in this Session.
Sale took place and district court entered summary judgment before SFR.
Lender foreclosed before the HOA, so this was REO property.
Lender knew sale had been scheduled and disputed lien amount, yet it did not attend sale, request arbitration to determine the amount owed, or seek to enjoin the sale, and did not tender full amount of lien in NOS.
The views expressed in this Presentation should not be relied on as legal advice. Please consult your own counsel before relying on any
Recitals in Foreclosure Deed are not conclusive; courts can set aside defective foreclosure sale when appropriate despite NRS 116.31166.
A showing of grossly inadequate price plus fraud, unfairness, or
Purchase price less than 20% of value at time of sale may be.
Conflicting lien payoff statements or including fees and costs not permitted under Statute, rising to “level of misrepresentations and nondisclosures that prevented [lender’s] ability to cure the default” might support setting aside the sale.
Proof of tender of full lien, or possibly just super-priority amount, which is rejected by HOA may be sufficient to set aside the sale.
Lender obligated to pay 9 mos. assessments before + all after HOA sale.
Court must look at “totality of the circumstances” to set aside sale.
The views expressed in this Presentation should not be relied on as legal advice. Please consult your own counsel before relying on any
NRED Adv. Op. No. 13-01 – An association may collect as a part of the super- priority lien interest, authorized late fees or charges, charges for preparing any statements of unpaid assessments and “costs of collecting.”
NAC 116.470 – caps fees at $1,950, allows cost of a trustee’s sale guarantee and
express delivery, skip trace, and certain attorneys fees.
The views expressed in this Presentation should not be relied on as legal advice. Please consult your own counsel before relying on any information provided in this Session.
The views expressed in this Presentation should not be relied on as legal advice. Please consult your own counsel before relying on any information provided in this Session.
The views expressed in this Presentation should not be relied on as legal advice. Please consult your own counsel before relying on any information provided in this Session.
The views expressed in this Presentation should not be relied on as legal advice. Please consult your own counsel before relying on any information provided in this Session.
Washington & Sandhill Homeowners Ass’n v. Bank of America, N.A., 2014 WL 4798565 (D. Nev. Sept. 25, 2014) – Judge Gloria Navarro
A title or mortgage interest in real property held by a federal agency is federal property protected by the Constitution.
Federal rather than state law applies in cases involving FHA- insured mortgages to assure the protection of the federal program against loss.
Where a mortgage is insured by a federal agency under the FHA insurance program, state laws cannot operate to undermine the FHA’s ability to obtain title after foreclosure and resell the property.
Accordingly, the Supremacy Clause of the U.S. Constitution trumps SFR v. U.S. Bank: an HOA foreclosure sale cannot extinguish a deed of trust on an FHA loan.
The views expressed in this Presentation should not be relied on as legal advice. Please consult your own counsel before relying on any information provided in this Session.
In July of 2008, Congress passed the Housing and Economic Recovery Act of 2008 (“HERA”), codified at 12 U.S.C. §4511 et seq., which established the Federal Housing Finance Agency (“FHFA”) for the purpose of regulating Fannie Mae and Freddie Mac.
As conservator for Fannie Mae and Freddie Mac, FHFA immediately succeeded to all their “rights, titles, powers, and privileges.”
Congress granted FHFA numerous privileges and exemptions to carry out its statutory functions including an “exemption” captioned “Property protection” providing that when acting as conservator, “[n]o property of [FHFA] shall be subject to levy, attachment, garnishment, foreclosure, or sale without the consent of [FHFA], nor shall any involuntary lien attach to the property of [FHFA].” 12 U.S.C. §4617(j)(3).
The views expressed in this Presentation should not be relied on as legal advice. Please consult your own counsel before relying on any information provided in this Session.
The plain language of 12 U.S.C. §4617(j) prevents the HOA’s foreclosure of its super-priority lien from extinguishing Fannie Mae’s or Freddie Mac’s Deed of Trust.
12 U.S.C. §4617(j)(3) preempts NRS 116.3116.
The views expressed in this Presentation should not be relied on as legal advice. Please consult your own counsel before relying on any information provided in this Session.
NRS Chapter 116 did not expressly require that an HOA provide any notice to the lender of the delinquent assessment despite the fact that its property rights are directly threatened by the foreclosure.
The Statute required the lender to “opt in” and request notice.
U.S. Supreme Court has held due process requires “notice by mail or other means as certain to ensure actual notice.”
The views expressed in this Presentation should not be relied on as legal advice. Please consult your own counsel before relying on any information provided in this Session.
The bill clarifies and limits the amount of the “collection costs” in enforcing a lien as part of the super-priority portion of lien.
A lienholder who advances funds to pay the homeowner’s debt can recover that sum from the homeowner.
The NOD must describe the super-priority portion of the lien.
HOA trustee must serve NOD and NOS on each lienholder of record.
Association must record an affidavit setting forth the name and address of each lienholder served with the NOD/NOS.
HOA sales must now be conducted in the same location as lenders’ foreclosure sales, with similar notice requirements.
The views expressed in this Presentation should not be relied on as legal advice. Please consult your own counsel before relying on any information provided in this Session.
Postponements up to a maximum of 3 times or new notice required.
Auctioneer must announce at auction if the super-priority portion of the lien has been satisfied.
Sale must be commercially reasonable.
If First Deed of Trust holder pays the super-priority lien at least 5 days before the date of the HOA sale, and the HOA records a “record of such payment” no later than 2 days before the sale, then the HOA foreclosure does not extinguish the First Deed of Trust.
Unit owner or any lien holder has a right of redemption within 60 days of the HOA sale.
HOA Purchaser is a BFP if no redemption within 60 days.
The views expressed in this Presentation should not be relied on as legal advice. Please consult your own counsel before relying on any information provided in this Session.
If a unit is subject to foreclosure mediation, an HOA may foreclose if the HOA dues are not paid during the pendency of the mediation.
Deed of Trust Trustee must notify HOA if unit is subject to the mediation program.
Lender must provide to the Div. of Financial Institutions (Dept.
borrower or borrower’s representative may send information and notices to facilitate mediation under the Foreclosure Mediation Program.
HOA may mail notices concerning the HOA lien. This information must be maintained and displayed by the Division on its web site.
Super-priority lien is “rolling.”
The views expressed in this Presentation should not be relied on as legal advice. Please consult your own counsel before relying on any information provided in this Session.
The views expressed in this Presentation should not be relied on as legal advice. Please consult your own counsel before relying on any
The views expressed in this Presentation should not be relied on as legal advice. Please consult your own counsel before relying on any information provided in this Session.