HOA Super Priority Liens

UPDATE: Ninth Circuits Denies Rehearing of <i>Bourne Valley</i> Decision Holding Nevada HOA Super-Priority Lien Statute UnconstitutionalThe Ninth Circuit denied the plaintiff’s request to rehear Bourne Valley Court Trust v. Wells Fargo Bank, N.A., in which the Ninth Circuit found NRS 116 to be unconstitutional on its face because the statute violates a first lien holder’s due process rights by impermissibly shifting the burden to mortgage lenders to affirmatively request notice

Ninth Circuit Denies Motion to Dismiss and Motion to Stay Publication of Decision Holding Nevada HOA Super-Priority Lien Statute Facially UnconstitutionalAs we have previously covered in a series of blog posts, the Nevada Supreme Court held in September 2014 that Nevada Revised Statute chapter 116 allows homeowners’ associations (HOAs) to non-judicially foreclose on homeowners who have overdue assessments, which may extinguish a first lien holder’s deed of trust. That holding, as well as the

The Ninth Circuit Weighs In: NRS 116 is Facially Unconstitutional

The tide may finally be turning in Nevada.  Since the Nevada Supreme Court dealt a devastating blow to the whole of the financial services industry in September 2014 by holding that an HOA could foreclose on its super-priority lien and thereby extinguish a first deed of trust, first lien holders have been battling to protect

Nevada Supreme Court Strikes Significant Blow Against HOA Super-Priority Foreclosure-Sale PurchasersIn September 2014, the Nevada Supreme Court held that an HOA could foreclose on its nominal super-priority lien and extinguish a senior mortgage in SFR Investments Pool 1, LLC v. U.S. Bank, N.A., a ruling that initially seemed cataclysmic to the mortgage industry. SFR Investments spawned thousands of contentious quiet-title actions, each pitting the

Rhode Island Joins Lists of True Super-Priority Lien States for Condo AssociationsIn December 2015, the Rhode Island Supreme Court issued an opinion holding that Rhode Island’s Uniform Condominium Act provides a true “super-priority” lien to condominium owner associations (COAs) when a condominium owner is delinquent in paying the COA assessments. This super-priority lien—applicable to condo association liens only—takes priority over a lender’s first security interest in

Be Prepared: How to Avoid the Super-Priority TrapBenjamin Franklin once said, “By failing to prepare, you prepare to fail.” Servicers can face significant obstacles in preservation of their rights vis a vis assessments by homeowners’ associations and condo associations (a “property association”). The most important action servicers can take in addressing this issue, not surprisingly, is foresight and preparation by putting procedures

Nevada Supreme Court Clarifies Limits to its SFR Investments DecisionIn September 2014, the Nevada Supreme Court, in SFR Investments Pool 1, LLC v. U.S. Bank, N.A., held that a portion of a homeowners’ association (HOA) lien for delinquent assessments has true super-priority status over a first deed of trust, meaning that the foreclosure of that lien could extinguish the first deed of

Nevada District Judge Voids HOA Foreclosure Following Evidence that HOA Hindered Bank’s Efforts to Preserve its MortgageNevada Eighth Judicial District Judge Elizabeth Gonzales has voided a 2014 homeowners association (HOA) foreclosure sale and ruled that a first mortgage held by Bank of America, N.A. was unaffected by the sale. The April 20, 2016 ruling in Nevada New Builds, LLC v. Bank of America, followed a trial in which Bank of America

Mortgage Industry Scores Big Nevada Supreme Court Win in Continued Battle over HOA Super-Priority LiensThe mortgage lending community was dealt a serious blow in September 2014, when the Nevada Supreme Court held that an HOA’s foreclosure of its nominal super-priority lien could extinguish a first lien interest in SFR Investments Pool 1, LLC v. U.S. Bank, N.A. This decision potentially rendered hundreds of millions of dollars in secured loans

Tennessee Amends Condominium Lien Law to Clarify Lack of Superpriority RightOn Tuesday, Tennessee Governor Bill Haslam signed HB 2401, amending Tennessee’s condominium statue to make it clear that condominium associations cannot acquire a “superpriority” lien that trumps a first security interest on the same property. As a result of the amendment, it is now clear that under Tennessee law a condominium only has a “payment