Nevada HOA Lien Law Unconstitutional
Shareholder Can’t Inspect Freddie Mac’s Records A Virginia federal court ruled August 23 that Freddie Mac shareholders cannot force the mortgage finance company to allow it to inspect their records, dismissing a lawsuit brought on by a Freddie Mac shareholder. U.S. District Judge James C. Cacheris dismissed a lawsuit brought by Timothy J. Pagliara, a shareholder of Freddie Mac. Pagliara had asked the court to order Freddie to allow him to inspect its books and records. He has filed lawsuits in both Delaware and Virginia state courts seeking access to corporate records from both the GSEs related to the net worth sweep. The court held that Freddie shareholders no longer possess a right to inspect the company’s records because those rights had been transferred to the Federal Housing Finance Agency (FHFA), when the company went into conservatorship in 2008. Fannie Mae and Freddie Mac received a combined $187.5 billion bailout from taxpayers in 2008 to remain afloat. In September 2008, they were taken into conservatorship by the Federal Housing Finance Agency.
A federal appeals court ruled that a Nevada law that stripped lenders of their first deed of trust rights when a homeowners’ association (HOA) forecloses on a property is unconstitutional. In a 2-1 decision, the Ninth Circuit Court of Appeals overruled a 2014 Nevada Supreme Court decision, which held that HOA foreclosures were a super lien and can extinguish a first mortgage. In Bourne Valley Court Trust v. Wells Fargo Bank , the federal appellate court held that the non-judicial foreclosure of a Nevada HOA super lien cannot constitutionally extinguish a mortgage lender’s security interest. In 2014, the Nevada Supreme Court held that, as a matter of lien priority, HOA super lien foreclosures can extinguish a first mortgage.
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The case is Timothy J. Pagliara v. Federal Home Loan Mortgage Corporation .
Source: The Wall Street Journal
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