Reported / Citable
Background
NewRez, LLC d/b/a Shellpoint Mortgage Servicing brought this foreclosure action against borrower Lori D. Greene, the United States, and Sundown Glen Community Association. NewRez alleged that Greene defaulted on a loan secured by her property and sought foreclosure.
NewRez moved for a default judgment against Greene and requested an order authorizing foreclosure. Its complaint asserted federal jurisdiction because it sued an agency or officer of the United States, naming the United States through the Secretary of Housing and Urban Development based on the government’s asserted interest in the property.
The Court’s Holding
Magistrate Judge Yvonne Y. Ho held that the court could not consider NewRez’s default-judgment request until it confirmed subject-matter jurisdiction. The party invoking federal jurisdiction bears the burden to establish it, including when seeking a default judgment.
The court concluded that NewRez’s pleaded jurisdictional theory appeared insufficient. Relying on a recent Southern District of Texas decision applying Fifth Circuit precedent, the court explained that 28 U.S.C. § 2410 permits the United States to be named in certain lien and foreclosure actions but does not itself create federal subject-matter jurisdiction. Naming the United States because it may have an interest in the property therefore did not establish jurisdiction.
The court ordered NewRez to show cause by July 14, 2026, why the case should not be dismissed for lack of jurisdiction, vacated remaining scheduling deadlines, and recommended denying the default-judgment motion without prejudice to refiling if jurisdiction is ultimately established.
Key Takeaways
- A federal court must independently confirm subject-matter jurisdiction before entering default judgment.
- Section 2410 authorizes naming the United States in qualifying property-lien actions but does not supply federal jurisdiction.
- The lender must show another valid jurisdictional basis or face dismissal for want of jurisdiction.
Why It Matters
The decision underscores that a lender cannot place an otherwise state-law foreclosure dispute in federal court merely by joining the United States as a lienholder or interested party. Practitioners should identify and plead an independent jurisdictional basis before seeking foreclosure relief or default judgment in federal court.