Dang v. PennyMac Loan Services, LLC
Andy Kim Dang v. PennyMac Loan Services, LLC, and Federal National Mortgage Association
- Paul Magnuson
- 0:24-cv-04256
- U.S. District Court · District of Minnesota
- 4
In Andy Kim Dang v. PennyMac Loan Services, LLC, and Federal National Mortgage Association, Judge Magnuson denied Plaintiff Andy Kim Dang's emergency motion for a temporary restraining order to stop his eviction, holding that a federal law called the Anti-Injunction Act bars federal courts from halting ongoing state court eviction proceedings.
Homeowners in foreclosure who have filed related federal lawsuits and seek to use the federal court to halt state court eviction proceedings; also mortgage servicers and mortgage holders involved in post-foreclosure eviction disputes.
What happened
In Andy Kim Dang v. PennyMac Loan Services, LLC, and Federal National Mortgage Association, Andy Kim Dang took out a mortgage in 2017 on a home in St. Louis Park, Minnesota. After financial difficulties and two bankruptcy filings, PennyMac foreclosed on the property and sold it at auction in April 2024. The redemption period — the window during which Dang could have bought his property back — expired in October 2024 without him doing so. Federal National Mortgage Association (FNMA), which received the property from PennyMac, then filed an eviction action in state court, and in September 2025 a state court issued a judgment and order requiring Dang to vacate the property.
Dang asked the federal court to stop Defendants and county officials from carrying out the eviction writ. His federal lawsuit includes claims under a federal mortgage law (the Real Estate Settlement Procedures Act) and several Minnesota state law claims, including allegations that PennyMac improperly pursued foreclosure at the same time it was supposedly working with him on a loan modification (known as 'dual tracking'), as well as claims for misrepresentation, breach of contract, and related theories.
Judge Magnuson denied the motion, ruling that a federal statute called the Anti-Injunction Act prohibits federal courts from stopping ongoing state court proceedings unless one of three narrow exceptions applies. The judge found that none of those exceptions applied here: Congress has not specifically authorized federal courts to halt state eviction cases, the federal court has not yet issued any judgment of its own to protect, and the state eviction proceedings do not seriously threaten the federal court's ability to handle the federal case. The judge also noted that even setting aside the Anti-Injunction Act, Dang had not offered any argument in support of the relief he sought.
The detailed version
Case: Andy Kim Dang v. PennyMac Loan Services, LLC, and Federal National Mortgage Association, Civ. No. 24-4256 (PAM/DLM), U.S. District Court for the District of Minnesota. Decided October 8, 2025, by United States District Court Judge Paul A. Magnuson.
Background
In April 2017, Plaintiff Andy Kim Dang executed a mortgage on real property at 4180 Xenwood Avenue South, St. Louis Park, Minnesota. The mortgage was assigned to Defendant PennyMac Loan Services, LLC in June 2020. Dang filed Chapter 13 bankruptcy petitions in 2020 and 2024. PennyMac initiated foreclosure proceedings, and the property was sold at a sheriff's auction on April 25, 2024, with PennyMac as the buyer. In July 2024, PennyMac conveyed the Sheriff's Certificate of Sale to Defendant Federal National Mortgage Association (FNMA). The statutory redemption period — the period under Minnesota law during which a homeowner may reclaim foreclosed property by paying what is owed — expired on October 25, 2024, without Dang redeeming the property.
Dang originally sued PennyMac in Minnesota state court on October 23, 2024, seeking a temporary restraining order to set aside the foreclosure sale and prevent eviction. The state court denied that motion on October 25, 2024, partly because PennyMac had already transferred its interest to FNMA and could not initiate eviction. Dang amended his complaint to add FNMA. Defendants then removed the case to federal court.
The operative Amended Complaint asserts claims for: (1) violations of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2605(k)(1)(E); (2) violations of Minnesota's dual-tracking prohibition, Minn. Stat. § 582.043, subd. 6(d)(1) (which restricts lenders from simultaneously pursuing foreclosure while reviewing a borrower's application for a loan modification); (3) negligent and fraudulent misrepresentation; (4) breach of contract; (5) promissory estoppel; and (6) declaratory and injunctive relief.
In May 2025, FNMA filed a state court eviction action against Dang. On September 25, 2025, the Hennepin County state court entered an eviction judgment in favor of FNMA and issued a Writ of Recovery of Premises and Order to Vacate.
The Motion
That same day, September 25, 2025, Dang filed an Emergency Motion for a Temporary Restraining Order (TRO) in federal court, seeking to enjoin Defendants from seeking a writ of recovery, the Hennepin County Housing Clerk from issuing any writ, and the Hennepin County Sheriff from enforcing any writ.
Legal Analysis — Anti-Injunction Act
Judge Magnuson denied the motion solely on the basis of the Anti-Injunction Act, 28 U.S.C. § 2283. That statute provides that a federal court 'may not grant an injunction to stay proceedings in a State court' unless one of three narrow exceptions applies: (1) an Act of Congress expressly authorizes it; (2) it is necessary in aid of the federal court's jurisdiction; or (3) it is necessary to protect or effectuate a judgment the federal court has already entered. The court noted that all three exceptions are to be construed narrowly.
The court found none of the exceptions applicable: - First exception (Act of Congress): The court found no federal statute expressly authorizing a federal court to halt a state eviction proceeding, and Dang cited none. - Third exception (protect or effectuate a judgment): The federal court had not yet entered any judgment, so there was nothing to protect or effectuate. - Second exception (aid of jurisdiction): This exception applies only where a state court's actions would seriously impair the federal court's flexibility and authority to decide the federal case. The court found no such interference had occurred.
Because the Anti-Injunction Act barred the relief sought, the court expressly declined to reach the Dataphase factors — the Eighth Circuit's four-factor test (likelihood of success on the merits, threat of irreparable harm, balance of harms, and public interest) used to evaluate requests for preliminary injunctive relief. See Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d 109, 111 (8th Cir. 1981).
The court also observed in the alternative that even if the Anti-Injunction Act did not apply, Dang had not offered any argument supporting the relief he sought.
Disposition
Plaintiff's Emergency Motion for Temporary Restraining Order (Docket No. 36) and Supplemental Motion for Temporary Restraining Order (Docket No. 47) were both DENIED. The underlying federal lawsuit remains pending.
Reviewer note from the AI+
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