Thursday, December 29, 2011

Utah Federal Court Rulings On Unqualified BofA Foreclosure Trustee In Conflict

In Salt Lake City, Utah, KCSG-TV Channel 14 reports:

  • Utah senior federal Judges Dee Benson and Bruce Jenkins have ruled Bank of America's foreclosure arm, ReconTrust Company, N.A. (NYSE: "BAC") may not be qualified to perform non-judicial foreclosures in Utah.

  • However, [last] week senior federal Judge David Sam ruled that ReconTrust is operating under the National Bank Act regulated by the Office of the Comptroller of the Currency (OCC), is a trustee under the Texas law where ReconTrust is located rendering Utah Code 57-1-21(3) inapplicable. Ruling

  • The ruling comes in a case filed by attorney John Christian Barlow, in which ReconTrust is being sued by Utah homeowner Garry Franklin Garrett accusing ReconTrust of conducting an unlawful foreclosure sale because it's is not a qualified trustee under Utah Law. The judge's decision conflicts with rulings by other Utah federal judges over the Bank of America's Utah foreclosure activities.

  • The Utah Attorney General intervened in another Utah homeowner's lawsuit filing an Amicus Curiae petition charging that the Bank of America was illegally foreclosing on Utah homeowners. Peni Cox vs ReconTrust

  • The Utah Attorney General accused the Bank of America in May 2011 of illegal foreclosure activities using its subsidiary ReconTrust Company. In the letter, the Attorney General said that ReconTrust is in violation of Utah law as set forth in Utah Code Sections 57-1-21 and 57-1-23, which outline the requirements for lawful non-judicial foreclosures. Support for the attorney general's position is found in a recent 10th Circuit case, Shurtleff v. Kleinsmith in which Utah Code Sections 51-1-21 and 57-1-12 were found to be constitutional.

  • The letter said that ReconTrust is in violation of the National Bank Act, which does not allow national banks to operate in contravention of State and local law. ReconTrust's exercise of the fiduciary powers in the State of Utah is a violation of State law and applicable federal law, the Attorney General said.

For more, see Utah Federal Judges Decisions Conflict in ReconTrust Utah Home Foreclosure Actions.

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