United States District Court, D. Massachusetts
Ramon Suero, Rosanna Suero, Plaintiffs: Eloise P. Lawrence,
LEAD ATTORNEY, Harvard Legal Aid Bureau, Cambridge, MA.
Federal Home Loan Mortgage Corporation, also known as Freddie
Mac, Defendant: Justin M. Fabella, LEAD ATTORNEY, Hinshaw &
Culbertson LLP, Boston, MA; Robert T. Ferguson, Jr., Hinckley
Allen & Snyder, LLP, Boston, MA.
Federal Housing Finance Agency, Intervenor: Asim Varma,
Howard N. Cayne, LEAD ATTORNEYS, PRO HAC VICE, Arnold &
Porter LLP, Washington, DC; Michael A.F. Johnson, LEAD
ATTORNEY, PRO HAC VICE, Arnold & Porter, Washington, DC; Eric
F. Eisenberg, Robert T. Ferguson, Jr., Hinckley, Allen and
Snyder, LLP, Boston, MA.
OF DECISION AND ORDER ON CROSS-MOTIONS FOR SUMMARY
Gail Dein, United States Magistrate Judge.
plaintiffs, Ramon and Rosanna Suero (the " Sueros"
), have brought this action against the Federal Home Loan
Mortgage Corporation, commonly known as " Freddie
Mac," in order to challenge Freddie Mac's refusal to
sell their foreclosed home to Boston Community Capital
(" BCC" ), a not-for-profit lender that purchases
foreclosed homes at their current fair market value, and
resells or leases them back to the former homeowners. At the
time it refused to sell the Sueros' former property to
BCC, Freddie Mac was carrying out policies that prohibited it
from selling foreclosed real estate to entities that intended
to resell the property to the former borrower. By their
claims in this action, the Sueros allege, inter alia, that
Freddie Mac's implementation of those policies violates
the Non-Profit Buyback Provision of the Massachusetts
Foreclosure Law, Mass. Gen. Laws ch. 244, § 35C(h)
(" Section 35C(h)" ), and constitutes an unfair or
deceptive act or practice that violates Mass. Gen. Laws ch.
(" Chapter 93A" ). Since 2008, the Federal Housing
and Finance Agency (" FHFA" or " Agency"
) has been acting as both the regulator and Conservator of
Freddie Mac pursuant to the Housing and Economic Recovery
Act, 12 U.S.C. § 4501 et seq. (" HERA" ). FHFA
has intervened in this action, and is participating in the
defense of the claims that the Sueros have brought against
matter is presently before the court on the "
Plaintiffs' Motion for Partial Summary Judgment"
(Docket No. 46). It is also before the court on Freddie
Mac's and FHFA's " Cross-Motion for Partial
Summary Judgment" (Docket No. 63). By their motions,
each of the parties contends that it is entitled to judgment
as a matter of law on Count I of the Verified Complaint.
Pursuant to Count I, the Sueros are seeking to hold Freddie
Mac liable for the alleged violations of Section 35C(h) and
Chapter 93A, and to obtain declaratory and/or injunctive
relief requiring Freddie Mac to sell the Sueros' former
home to BCC.
threshold issue raised by the parties' cross-motions is
whether HERA's anti-injunction clause precludes this
court from considering the plaintiffs' state law claims
on the merits. That clause provides that " no
court may take any action to restrain or affect the exercise
of powers or functions of the [FHFA] as a conservator"
of Freddie Mac. 12 U.S.C. § 4617(f). The defendants
contend that an order compelling Freddie Mac to sell the
foreclosed property to BCC would constitute an unlawful
restraint on the Conservator's statutory authority to
dispose of an asset of the conservatorship on terms that it
deems appropriate. In response, however, the plaintiffs argue
that the anti-injunction provision is inapplicable because
the defendants have failed to show that FHFA took any action
or exercised its powers as a Conservator with respect to
Freddie Mac's sales of foreclosed homes.
not the first time these issues have arisen in the context of
a lawsuit challenging Freddie Mac's refusal to sell
foreclosed property to BCC. In Massachusetts v. Fed. Hous.
Fin. Agency, the Commonwealth of Massachusetts, by its
then-Attorney General, Martha Coakley, brought claims against
Freddie Mac, FHFA and the Federal National Mortgage
Association (" Fannie Mae" ) alleging, inter alia,
that Freddie Mac's and Fannie Mae's refusal to sell
foreclosed homes to BCC violated Section 35C(h) of the
Massachusetts Foreclosure Law and constituted an unfair or
deceptive business practice in violation of Chapter 93A. See
Massachusetts v. Fed. Hous. Fin. Agency, 54
F.Supp.3d 94, 97 (D. Mass. 2014) (the " Common-wealth
Action" ). As in this case, the plaintiff in that action
sought to enjoin Freddie Mac from enforcing its policy on
sales of foreclosed homes. Id. On July 14, 2014, the
defendants filed a motion to dismiss pursuant to Fed.R.Civ.P.
12(b)(1) & (6) in which they argued that the anti-injunction
provision of HERA barred the court from granting such relief.
Id. On October 21, 2014, the court (Stearns, J.),
issued a decision allowing the motion to dismiss, holding
that HERA's anti-injunction
clause applied and that the court lacked authority to
consider the Commonwealth's claims on the merits.
Id. at 101-02.
Judge Stearns' issuance of his decision in the
Commonwealth Action, this court heard oral argument on the
pending motions for summary judgment and took the matter
under advisement. Shortly thereafter, the Commonwealth filed
a notice of appeal in the Commonwealth Action. Because the
appeal presented issues that were identical to the issues
presented to this court on summary judgment, it was prudent
to await a ruling from the First Circuit before addressing
the parties' cross-motions. Accordingly, this court
continued to hold the matter under advisement pending a
decision from the Court of Appeals.
the defendants notified this court that the Commonwealth, by
its new Attorney General, Maura Healey, had filed a motion to
voluntarily dismiss its appeal in the Commonwealth Action,
and that the First Circuit had allowed the motion and entered
Judgment accordingly. (Docket No. 96 at Ex. A). The record
does not indicate why the Commonwealth decided to abandon its
appeal. In any event, as a result of that action, Judge
Stearns' decision in the Commonwealth Action remains
unchallenged, and the issues presented on summary judgment in
the present case must now be decided without the benefit of a
ruling from the First Circuit.
careful consideration of the undisputed facts set forth in
the record, as well as the parties' written submissions
and their oral arguments, this court finds that HERA's
anti-injunction clause bars this court's jurisdiction
over the claims asserted in Count I of the Sueros'
complaint. Therefore, and for all the reasons set forth
below, the plaintiffs' motion for partial summary
judgment as to Count I is DENIED, and the defendants'
cross-motion for partial summary judgment as to Count I is
STATEMENT OF FACTS
following facts are undisputed unless otherwise indicated.
plaintiffs, Ramon and Rosanna Suero, are the former owners
and current occupants of residential property that is located
on Elder Street in Dorchester, Massachusetts (the "
Property" ). (PF ¶ 1). The Sueros purchased the
Property for $283,000 on August 31, 2005. (Id.
¶ 3). They refinanced their mortgage approximately two
years later, on August 7, 2007. (Id. ¶ 4). In
connection with the refinancing, the Sueros granted a
mortgage to the Mortgage Electronic Registration System for
$298,000. (Id.). The mortgage was subsequently
assigned to Ocwen Loan Servicing, LLC (" Ocwen" ),
which became the servicer of the loan. (See id. ¶ 5; DR
¶ 5; Compl. (Docket No. 1) at Ex. I ¶ 2). This case
arises out of events that occurred after the Sueros defaulted
on their mortgage and Ocwen foreclosed on their home.
defendant, Freddie Mac, is a government-sponsored enterprise
(" GSE" ), which Congress created, along with
Fannie Mae, in order to " 'establish secondary
market facilities for residential mortgages,'
'provide stability in the secondary market for
residential mortgages,' and 'promote access to
mortgage credit throughout the Nation.'" Fed.
Hous. Fin. Agency v. City of Chicago, 962 F.Supp.2d
1044, 1048 (N.D.Ill. 2013) (quoting 12 U.S.C. § 1716).
The GSEs have worked toward achieving these goals by "
buy[ing] residential mortgages from banks, repackag[ing] them
for sale as mortgage-backed securities, and guarantee[ing]
these securities by promising to make investors whole if
borrowers default." Id. (quoting Judicial
Watch, Inc. v. FHFA, 646 F.3d 924, 925, 396 U.S.
App.D.C. 200 (D.C. Cir. 2011)). Together, " Freddie Mac
and Fannie Mae own or guarantee roughly half of the
outstanding residential mortgage loans in the United
States." Massachusetts v. Fed. Hous. Fin.
Agency, 54 F.Supp.3d at 96. Since September 10, 2007,
Freddie Mac has been the investor on the Sueros' mortgage
loan, and the holder of the promissory note for the loan. (PF
¶ 6; DR ¶ 6).
intervenor, FHFA, is a federal agency that was created
pursuant to HERA as " the safety, soundness, and housing
mission regulator" of Fannie Mae and Freddie Mac. (See
Pl. 3d Supp. Ex. A at 11). In addition to its role as the
regulator of the GSEs, FHFA has the power to be appointed as
a conservator or receiver of Fannie Mae and Freddie Mac
" for the purpose of reorganizing, rehabilitating, or
winding up the affairs" of those entities. See 12 U.S.C.
§ 4617(a)(2). Since September 2008, FHFA has held Fannie
Mae and Freddie Mac in conservatorship with the goal of
preserving and conserving their assets and property, putting
them in a " sound and solvent condition[,]" and
restoring confidence in the GSEs. (Pl. 3d Supp. Ex. A at 12).
A critical issue in this case is whether FHFA's status as
the Conservator for Freddie Mac strips this court of subject
matter jurisdiction over Count I of the Sueros'
complaint. For the reasons described below, this court finds
that it does.
Sueros' Involvement with BCC
September 2010, Ocwen foreclosed on the plaintiffs'
mortgage, and Freddie Mac took title to the Property. (PF
¶ 5; DR ¶ 5; Compl. ¶ 5; Answer (Docket No.
24) ¶ 5). Although the Sueros no longer own the
Property, they have continued to reside there since the
foreclosure. (See PF ¶ 21; DF ¶ 32). They have also
made monthly use and occupancy payments to Freddie Mac since
October 2012. (See PF ¶ 21; Compl. ¶ ¶ 11, 14;
Answer ¶ ¶ 11, 14). According to the plaintiffs,
those payments have amounted to $700 per month. (PF ¶
21; PSF ¶ 4).
about December 2011, the Sueros applied and received approval
from BCC for a mortgage loan to repurchase the Property. (PF
¶ 7). BCC is a non-profit
community financial development institution that is exempt
from taxation under section 501(c)(3) of the Internal Revenue
Code. (Id.; Pl. 2d Supp. Ex. 1). Its aim is to build
healthy communities in areas where low-income people live and
work. (Pl. Ex. 3 ¶ 2). In an effort to achieve that
goal, BCC has implemented what is known as its Stabilization
Urban Neighborhoods (SUN) Initiative. (See id. ¶ ¶
1-3; Pl. Supp. Ex. A at 1). Through its SUN Initiative, BCC
assists struggling homeowners in their efforts to avoid
foreclosure or otherwise stabilize their housing situation by
purchasing their properties and renting or selling those
properties back to the homeowners with a mortgage that they
can afford. (Pl. Ex. 3 ¶ 3; PF ¶ 16). According to