Utah Judge Stops All Foreclosures by BofA, Reconstrust, Home Loan Services et al

6 05 10Injunction-Stopping-ALL-Foreclosure-Proceedings-by-Bank-of-America-Rec-on-Trust-Home-Loan-Servicing-Et-Al1

Bombshell – Judge Orders Injunction Stopping ALL Foreclosure Proceedings by Bank of America; Recontrust; Home Loan Servicing et al Today, June 06, 2010, 2 hours ago | Foreclosure Fraud

(St. George, UT) June 5, 2010 – A court order issued by Fifth District Court Judge James L. Shumate May 22, 2010 in St. George, Utah has stopped all foreclosure proceedings in the State of Utah by Bank of America Corporation, ; Recontrust Company, N.A; Home Loans Servicing, LP; Bank of America, FSB; www.envisionlawfirm.com. The Court Order if allowed to become permanent will force Bank of America and other mortgage companies with home loans in Utah to adhere to the Utah laws requiring lenders to register in the state and have offices where home owners can negotiate face-to-face with their lenders as the state lawmakers intended (Utah Code ‘ 57-1-21(1)(a)(i).). Telephone calls by KCSG News for comment to the law office of Bank of America counsel Sean D. Muntz and attorney Amir Shlesinger of Reed Smith, LLP, Los Angeles, CA and Richard Ensor, Esq. of Vantus Law Group, Salt Lake City, UT were not returned.

The lawsuit filed by John Christian Barlow, a former Weber State University student who graduated from Loyola University of Chicago and receive his law degree from one of the most distinguished private a law colleges in the nation, Willamette University founded in 1883 at Salem, Oregon has drawn the ire of the high brow B of A attorney and those on the case in the law firm of Reed Smith, LLP, the 15th largest law firm in the world.

Barlow said Bank of America claims because it’s a national chartered institution, state laws are trumped, or not applicable to the bank.

That was before the case was brought before Judge Shumate who read the petition, supporting case history and the state statute asking for an injunctive relief hearing filed by Barlow. The Judge felt so strong about the case before him, he issued the preliminary injunction order without a hearing halting the foreclosure process. The attorney’s for Bank of America promptly filed to move the case to federal court to avoid having to deal with the Judge who is not unaccustomed to high profile cases and has a history of watching out for the “little people” and citizen’s rights.

The legal gamesmanship has begun with the case moved to federal court and Barlow’s motion filed to remand the case to Fifth District Court.

Barlow said is only seems fair the Bank be required to play by the rules that every mortgage lender in Utah is required to adhere; Barlow said, “can you imagine the audacity of the Bank of America and other big mortgage lenders that took billions in bailout funds to help resolve the mortgage mess and the financial institutions now are profiting by kicking people out of them homes without due process under the law of the State of Utah.

Barlow said he believes his client’s rights to remedies were taken away from her by faceless lenders who continue to overwhelm home owners and the judicial system with motions and petitions as remedies instead of actually making a good-faith effort in face-to-face negotiations to help homeowners. “The law is clear in Utah,” said Barlow, “and Judge Shumate saw it clearly too. Mortgage lender are required by law to be registered and have offices in the State of Utah to do business, that is unless you’re the Bank of America or one of their subsidiary company’s who are above the law in Utah.”

Barlow said the Bank of America attorneys are working overtime filing motions to overwhelm him and the court. “They simply have no answer for violating the state statutes and they don’t want to incur the wrath of Judge Shumate because of the serious ramifications his finding could have on lenders in Utah and across the nation where Bank of America and other financial institutions, under the guise of a mortgage lender have trampled the rights of citizens,” he said.

“Bank of America took over the bankrupt Countrywide Home Loan portfolio June 3, 2009 in a stock deal that has over 1100 home owners in foreclosure in Utah this month alone, and the numbers keep growing,” Barlow said.

The second part of the motion, Barlow filed, claims that neither the lender, nor MERS*, nor Bank of America, nor any other Defendant, has any remaining interest in the mortgage Promissory Note. The note has been bundled with other notes and sold as mortgage-backed securities or otherwise assigned and split from the Trust Deed. When the note is split from the trust deed, “the note becomes, as a practical matter, unsecured.” Restatement (Third) of Property (Mortgages) § 5.4 cmt. a (1997). A person or entity only holding the trust deed suffers no default because only the Note holder is entitled to payment.

Basically, “[t]he security is worthless in the hands of anyone except a person who has the right to enforce the obligation; it cannot be foreclosed or otherwise enforced.” Real Estate Finance Law (Fourth) §

5.27 (2002).

*MERS is a process that is designed to simplifies the way mortgage ownership and servicing rights are originated, sold and tracked.

Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans. www.mersinc.org

Jake Naumer  Union Capital

Licensed Financial Advisor

3187 Morgan Ford

St Louis Missouri 63116

314 961 7600

Fax Voice Mail 314 754 9086

19 Responses

  1. Patrick,

    I concede that you were right, however, I beleive this is a step backwards from where the Supreme Court was heading with regard to banls’ preemptive rights.

    I am waiting to read the memo & order to see how this judge came to his conclusions. I have not read the memos of law filed by the parties, but that also has a bearing on why the federal court ruled the way it did.

    I hope the attorney for this homeowner appeals this decision. They have a very good chance of winning on the appellate court level if they use Cuomo and Rose.

  2. Sorry, I meant to address my comment to you Paul, again good call!

  3. Alina:

    Good call, we read the pleadings as well, not legally or factually correct to create a remedy. Just gave a seminar in St George Utah where the attorney, who filed the case, and homeowner were present, and where now they understand such cases are a waste of time and money.

  4. Alina,

    I called it. The Injunction got dissolved. There really was no credible argument from a Federal Preemption point of view.

    Now, it would have been “interesting” if Utah had tried to separate portfolio and Fannie Mae/Freddie Mac out from the Privately Securitized loans. The private loans might have offered a bit better hope for the injunction.

  5. If they can’t conduct foeclosures, how can they do loan mod’s?

  6. Wish this would happen in California.

  7. yes!!!!! we are not alone there are judges who are brave and still believe in justice all judges should be so BRAVE AND STAND UP TO THIS MONSTER Bank of AMERICA AND THE LOT OF THE SAME

  8. It seems to me that the reason this worked is because the judge actually READ the pleadings! I’m seeing judges who don’t read the pleadings or even attempt to understand the real issues.

  9. oops ,, should have said records not property appraiser…

  10. HELP

    Cut/paste this into your browser … lots of info http://www.google.com/search?sourceid=ie7&q=bank+of+america+cig+hfi&rls=com.microsoft:en-us:IE-SearchBox&ie=UTF-8&oe=UTF-8&rlz=1I7ACAW ,, including a foreclosure screw up on a paid off home. From the articles that will be in the search results you can find names and counties from which you can pull documents from property appraiser websites.

  11. Patrick,

    You need to read Cuomo. As the Supreme Court state, the Watters case was limited only to the question of whether a subsidiary of a national bank enjoys the same immunity as its parent.

    12 C.F.R. § 34.4:
    (b) State laws on the following subjects are not inconsistent with the real estate lending powers of national banks and apply to national banks to the extent that they only incidentally affect the exercise of national banks’ real estate lending powers:

    (1) Contracts;

    (2) Torts;

    (3) Criminal law; 2
    2 But see the distinction drawn by the Supreme Court in Easton v. Iowa, 188 U.S. 220, 238 (1903) between “crimes defined and punishable at common law or by the general statutes of a state and crimes and offences cognizable under the authority of the United States.” The Court stated that “[u]ndoubtedly a state has the legitimate power to define and punish crimes by general laws applicable to all persons within its jurisdiction * * *. But it is without lawful power to make such special laws applicable to banks organized and operating under the laws of the United States.” Id. at 239 (holding that Federal law governing the operations of national banks preempted a state criminal law prohibiting insolvent banks from accepting deposits).

    (4) Homestead laws specified in 12 U.S.C. 1462a(f);

    *****(5) Rights to collect debts;

    *****(6) Acquisition and transfer of real property;

    (7) Taxation;

    (8) Zoning; and

    (9) Any other law the effect of which the OCC determines to be incidental to the real estate lending operations of national banks or otherwise consistent with the powers and purposes set out in §34.3(a).

  12. Alina,

    The rulings on Federal Preemption run across the board, some for and some against. However, I think that Watters will play an important role in this case.

    We shall see…………..

  13. Not so fast Patrick,

    Banks do not have blanket preemptive rights. Recently the U.S. District Court for the Eastern District of Pennsylvania defined a federally chartered bank’s preemption to state laws by citing recent Supreme Court decisions.

    From Mwantembe v. TD Bank, NA, (ED PA 2009):

    National banks are authorized by the NBA, 12 U.S.C. § 1, et seq., and are regulated by the OCC, §§ 24, 93(a) and 371(a). The NBA grants national banks the authority to exercise certain enumerated powers and “all such incidental powers as shall be necessary to carry on the business of banking.” 12 U.S.C. § 24 Seventh. Congress has authorized the OCC to oversee the operations of national banks and to define these “incidental powers.” NationsBank of N.C., N.A. v. Variable Annuity Life Ins. Co., 513 U.S. 251, 258 n. 2 (1995); 12 U.S.C. § 93a.

    To curtail intrusive state regulation of national banks, these “incidental powers” have been deemed “grants of authority not normally limited by, but rather ordinarily pre-empting, contrary state law.” Barnett Bank of Marion County, N.A. v. Nelson, 517 U.S. 25, 32 (1996). See also Watters v. Wachovia Bank, N.A., 550 U.S. 1, 12 (2007) (“when state prescriptions significantly impair the exercise of authority, enumerated or incidental under the NBA, the State’s regulations must give way”). Nevertheless, states may regulate the activities of national banks so long as they do not prevent or significantly interfere with the exercise of the banks’ authority. Barnett Bank, 517 U.S. at 33.
    In its recent decision, Cuomo v. Clearing House Ass’n, L.L.C., 129 S. Ct. 2710 (2009), the Supreme Court caused a sea change in the perception of the preemptive effect of the NBA and the OCC regulations. Before this pronouncement, courts appeared to be expanding the scope of federal preemption for national banks. See, e.g., Adam J. Levitin, Hydraulic Regulation: Regulating Credit Markets, 26 Yale J. on Reg. 143, 157-58 (2009) (noting the strengthening trend in recent years of federal preemption of state laws regulating: late fees, various loan closing fees, disclosures in credit agreements, mortgage-broker subsidiaries of national banks, check-cashing fees, gift cards, tax refund anticipation loans, and credit card convenience checks); Rashmi Dyal-Chand, From Status to Contract: Evolving Paradigms for Regulating Consumer Credit, 73 Tenn. L. Rev. 303, 320-21 and n.107 (2006) (noting how federal courts have limited the effectiveness of state consumer protection laws to protect credit-card borrowers by expanding the preemptive effect of § 85 of the National Bank Act). Cuomo reverses this trend and has dispelled the popular notion that all state laws that affect national banks in any way or to any degree are preempted.

    The Supreme Court held that the OCC’s regulation preempting states from prosecuting enforcement actions against national banks is not a reasonable interpretation of the NBA; and, accordingly, it is not entitled to Chevron deference.[12] Cuomo, 129 S. Ct. at 2715, 2721. In reaching its decision, the Court distinguished between a sovereign’s visitorial powers and its enforcement power. It clarified that only visitorial powers are preempted, leaving the states free to enforce their laws so long as they are not contrary to and not preempted by federal law. Id. It cleared the way for state attorneys general to file suit against national banks for violating state consumer protection laws.

    Noting that “[n]o one denies that the National Bank Act leaves in place some state substantive laws affecting banks,” the Court underscored that Congress has declined to exempt national banks from all state banking laws or state enforcement of those laws. Id. at 2717-18, 2720. The Court reaffirmed the holding of First Nat’l Bank in St. Louis v. Missouri, 263 U.S. 640, 660 (1924), that where a state statute of general applicability is not substantively preempted, the power of enforcement must rest with the state and not with the national government. Cuomo, 129 S. Ct. at 2717. The Court also emphasized that Watters was limited to the narrow question before it, that is, whether a national bank’s subsidiary is entitled to the same immunity from state visitorial powers as its parent. It stated that Watters “is fully in accord with the well established distinction between supervision and law enforcement.” Id. at 2717. Thus, against this backdrop, the Court concluded that the OCC’s regulation went too far because it prohibits states from enforcing “valid, non-preempted laws against national banks.” Id. at 2718.

  14. The Court Order if allowed to become permanent will force Bank of America and other mortgage companies with home loans in Utah to adhere to the Utah laws requiring lenders to register in the state and have offices where home owners can negotiate face-to-face with their lenders as the state lawmakers intended (Utah Code ‘ 57-1-21(1)(a)(i).)

    This will be challenged under Federal Preemption and HOLA. And it is likely that Federal Preemption will win. So don’t count on this going anywhere.

  15. IT IS TIME TO EXPOSE THESE BANANA REPUBLIC JUDGES TO THE COMMUNITY AT LARGE. THROUGH YOUTUBE FACEBOOK ETC………..

    MAKE THEM FAMOUS. ANY JUDGE THAT TAKES THE LAW INTO THEIR LAW (JUST LIKE A COMMON CRIMINAL) AND THINKS HE/SHE IS ABOVE THE LAW MUST BE EXPOSED. AT LEAST ADOLF HITLER AND HAMAS CHANGED THEN ENFORCED IT. THESE JUDGES DONT EVEN BOTHER TO CHANGE THE LAW.

    NEVER AGAIN
    GOD BLESS AMERICA

  16. Aren’t the note and mortgage inseparable, according to Carpenter v. Longan? Is Carpenter still in effect? I see above that Restatement says that note and mortgage can be split. Which is it? Any thoughts appreciated–post here or email to

    mreggs@eggsistense.com

    Thanks

  17. CIG HFI 1st Lien Mortgage- NEED any info at all. Post it please to share with other BofA folks too.

  18. CIG HFI 1st Lien Mortgage- Does anyone have documents with this name on them from BofA, that tells you/borrower that CIF HFI 1st Lien Mortgage is your investor. I need them for my lawsuit and proof. Email anything in privacy to opgc2010@gmail.com

  19. read this over at Matt’s blog… this should be happening in each and every state… the time has come to splite the wheat from the shaft!

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