PROPERTY LAW
Melissa English
In Anderson v. Alaska Housing Finance Corp., the supreme court held that a foreclosure was a deprivation of the borrower’s property, and that the borrower therefore constitutionally entitled to a pre-deprivation opportunity to be heard. The borrower borrowed from Wells Fargo Bank, N.A. to purchase a home, which then assigned the note and deed to AHFC. After AHFC accelerated the debt, the borrower defaulted, and AHFC instructed Wells Fargo to proceed with a foreclosure sale. After the borrower sued Wells Fargo and AHFC to enjoin the sale, Wells Fargo settled, and the borrower’s due process claim for AHFC’s failure to provide him a pre-foreclosure opportunity to be heard remained. The superior court granted AHFC’s motion for summary judgment and the borrower appealed. On appeal, the supreme court noted that the Alaska constitution requires that a due process claimant prove the existence of state action and the deprivation of a sufficient individual interest to warrant constitutional protection. The supreme court found ruled that AHFC was a state actor because it was created by the legislature to further governmental objectives (addressing low- and middle-income housing shortages) and was wholly controlled by the State because its board was comprised of governmental officials. The court further found that the borrower’s interest in his home was a sufficient property interest to invoke due process protections, including a pre-deprivation hearing. Accordingly, the court found that the borrower did not receive a constitutionally sufficient opportunity to be heard. The court also found that the borrower did not need to demonstrate prejudice because the right to be heard does not require that one will prevail at the hearing. Reversing the lower court’s decision, the supreme court held that the foreclosure was a deprivation of the borrower’s property and the borrower was constitutionally entitled to a pre-deprivation hearing.
