KEEPING CURRENT PROPERTY CASES FORECLOSURE: Fannie Mae’s nonjudicial foreclosure is not state action. The Federal National Mortgage Association (Fannie Mae) acquired home mortgage loans that were in default and conducted nonjudicial foreclosure sales of the properties under Rhode Island law. The homeowners filed a putative class action suit against Fannie Mae and its conservator, the Federal Housing Finance Agency (FHFA), alleging deprivation of property without adequate notice and opportunity for meaningful hearings in violation of the Fifth Amendment. FHFA and Fannie Mae moved to dismiss, asserting that they were not government actors for purposes of a Fifth Amendment claim. The district court dismissed the complaint on this ground. The First Circuit Court of Appeals affirmed. Its opinion began by describing the turmoil in the housing markets that led to the creation of FHFA, pointing out that FHFA’s mission is to prevent the ultimate collapse of the government-sponsored entities (GSEs), which include Fannie Mae. See Housing and Economic Recovery Act of 2008 (HERA), 12 U.S.C. § 4511. The court explained that when a federal agency, such as FHFA, exercises one statutory power in the role of government actor, that does not make the agency a federal actor for all purposes. Here, under the succession clause of HERA, when the FHFA became the GSEs’ conservator, it succeeded to “all rights, titles, powers, and privileges of the regulated entity … and [its] assets” Id. § 4617(b)(2)(A). One of these powers was the GSEs’ private contractual right to foreclose on Keeping Current—Property Editor: Prof. Shelby D. Green, Elisabeth Haub School of Law at Pace University, White Plains, NY 10603, sgreen@law.pace.edu. Contributor: Prof. Darryl C. Wilson.
Keeping Current—Property offers a look at selected recent cases, literature, and legislation. The editors of Probate & Property welcome suggestions and contributions from readers.
plaintiffs’ mortgages, and plaintiffs did not allege that the FHFA relied on any power other than the one to conduct nonjudicial foreclosures. This means that FHFA stepped “into Fannie Mae’s private shoes” and thus became a private actor. Also, Fannie Mae did not become a federal actor by virtue of the conservatorship because the government did not reserve any permanent authority over Fannie Mae. Instead, by its terms the conservatorship is temporary and for the limited purpose of “reorganizing, rehabilitating, or winding up [its] affairs,” id. § 4617(a)(2), and to take actions “necessary to put the regulated entity in a sound and solvent condition.” Id. § 4617(b)(2)(D)(i). Montilla v. Fed. Nat’l Mortg. Ass’n, 999 F.3d 751 (1st Cir. 2021). HOMESTEAD: Truck used as shelter qualifies as homestead. Long lived in his truck where he stored his work tools and his personal items. After his truck broke down, he parked in a gravel lot owned by the city for three months, when the police told him that a city ordinance prohibited parking in one location for more than 72 hours. He did not move the truck, so the city impounded it, and at an impoundment hearing, the magistrate waived the $44 ticket, reduced the impoundment charges from $946 to $547, and drafted a payment plan requiring Long to pay $50 per month. Long stated that he felt
“forced” to agree or risk losing his truck at a public auction. Long appealed the magistrate’s findings, arguing that the impoundment violated the excessive fines clauses of the state and federal constitutions, substantive due process, and the homestead act. The municipal court denied his claims. The superior court affirmed and reversed in part, rejecting the substantive due process claim but ruling that the impoundment costs were unconstitutionally excessive under the Eighth Amendment of the federal constitution and that the payment plan violated the homestead act. The court of appeals concluded that the payment plan was invalid under the homestead act but rejected the claim that the impoundment and associated costs were excessive. The supreme court affirmed in part and reversed in part. The court began by hailing the concept of homestead as a “uniquely American contribution” to real property law: “homestead exemptions are based on the notion that citizens should have a home where family is sheltered and living beyond the reach of financial misfortune and the demands of certain classes of creditors.” The court ruled that Long’s truck automatically qualified as a homestead because it was occupied personal property. The homestead act did not require Long to file a declaration; occupying the vehicle as his principal residence sufficed. Wash. Rev. Code § 6.13.040(1). Relying on historical sources going back to Magna Carta and on recent scholarship regarding the disproportionate effects of ostensibly neutral principles on certain groups, the court declared the fines excessive because they did not take into account Long’s ability to pay them. City of Seattle v. Long, 493 P.3d 94 (Wash. 2021). INSTALLMENT LAND CONTRACTS: Statute of limitations bars vendor’s action for specific
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