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In October 2011, Parks recorded a notice of default and election to sell. Then, on April 9, 2012, Parks recorded a notice of trustee/foreclosure sale against the property. The Horse Pointe Avenue Trust then paid $4,145 for the home at a homeowners’ association foreclosure sale, before conveying its interest in the property totheBourne Valley Court Trust, which then filed an action to quiet title and extinguish any other junior liens. As the Ninth Circuit writes, the foreclosure of a homeowners’ association “super priority” lien extinguished all junior interests in the property, including even a mortgage lender’s first deed of trust. Therefore, using the Nevada Supreme Court’s interpretation of the state’s laws, the district court held that Parks’ foreclosure extinguished Wells Fargo’s interest in the property. Wells Fargo then appealed, leading to this decision. According to the Ninth Circuit’s decision, Nevada state law contained a “peculiar scheme” for providing mortgage lenders with information about when an HOA intended to foreclose on a property. How to find personal information? “Even though such foreclosure forever extinguished the mortgage lenders’ property rights, the statute contained “opt in” provisions requiring that notice be given only when it had already been requested,” the Ninth Circuit wrote in its opinion. “Thus, despite that only the homeowners’ association knew when and to what extent a homeowner had defaulted on her dues, the burden was on the mortgage lender to ask the homeowners’ association to please keep it in the loop regarding the homeowners’ association’s foreclosure plans,” the court continued. “How the mortgage lender, which likely had no relationship with the homeowners’ association, should have known to ask is anybody’s guess.” The setup was not only “strange,” according to the Ninth Circuit, it was also unconstitutional. But that the foreclosure sale itself is a private action is irrelevant to Wells Fargo’s due process argument.

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