Recontrust | FORECLOSURE FRAUD | by DinSFLA

Tag Archive | "Recontrust"

Utah AG: We will fight foreclosure ruling Judge said BofA’s actions in Utah are governed by Texas laws.

Utah AG: We will fight foreclosure ruling Judge said BofA’s actions in Utah are governed by Texas laws.


“Texas does not pass banking laws for Utah,” Assist. AG Jerrold Jensen wrote. “And Utah does not pass banking laws for Texas.”

The Salt Lake Tribune-

The Attorney General’s Office is seeking to intervene in a lawsuit in which a federal judge has ruled that Texas law governs foreclosures carried out by a unit of Bank of America in Utah.

The Feb. 8 ruling by U.S. District Judge Ted Stewart “is not something the State of Utah can let pass,” Assistant Attorney General Jerrold Jensen wrote in seeking to intervene in the lawsuit.

Federal judges in Utah have split over the question of whether BofA’s foreclosure arm, ReconTrust, may have violated state law in thousands of actions taken in recent years against Utah homeowners.

Stewart ruled that because ReconTrust is headquartered in Texas, where it carries out many of its foreclosure functions, the National Bank Act says the bank’s actions are governed by that state’s laws.

[THE SALT LAKE TRIBUNE]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (1)

Full Deposition of Michele Sjolander, Executive Vice President of Countrywide Home Loans, Inc. “Stamp Endorsement”

Full Deposition of Michele Sjolander, Executive Vice President of Countrywide Home Loans, Inc. “Stamp Endorsement”


Remember Michele Sjolander? Well, you can read about her in MERS, Endorsed Note Get SLAMMED by Kings County NY Supreme Court | BANK of NEW YORK v. ALDERAZI

As well as in ARIZONA BK COURT ORDERS BONY MELLON TO PRODUCE ORIGINAL CUSTODIAN DOCUMENTS

and finally in the FULL DEPOSITION OF BANK OF AMERICA ROBO SIGNER RENEE D. HERTZLER

Fresh off the depo wagon comes her Full Deposition courtesy of 4closurefraud.

Excerpts:

Q It’s employees at Recontrust that stamp the
7 endorsements on the notes in general, including this one;
8 is that right?
9 A Yes.
10 Q And you’ve seen that taking place?
11 A Yes.
12 Q In Simi Valley?
13 A Yes.
14 Q Is there some type of manual or set of
15 instructions?
16 A They have my power of attorney.
17 Q Well, okay. That’s not what I’m asking. But I
18 do want to know about that. But what I’m saying: Is
19 there some sort of manual or instructions or –
20 A If you want to know the desk procedures, you
21 would have to speak with an associate of Recontrust.
22 Q Okay. Okay. Sorry. I’m just reading the notes
23 again. Now, I’m going to try to explain this. I may
24 have to do it a couple of times, but just bear with me.
25 And you’ve been very helpful so far. I appreciate it,
1 there it sat is I guess what I’m asking.
2 A In safekeeping, yes.
3 Q Okay. All right. Now, this is something you
4 touched on a minute ago. I’m going to try to phrase it
5 in a way that makes sense. Who — and let’s just deal
6 with Countrywide in 2007.
7 Who is allowed to be an endorser as you were? I
8 mean, who — let me leave it at that and see if that
9 makes sense to you.
10 A I don’t know what you’re asking.
11 Q What I’m saying is: Are there people other than
12 you at Countrywide in 2007 whose names would appear on a
13 note as an endorsement?
14 A For Countrywide Home Loans, Inc.?
15 Q Yes.
16 A In 2007, I was the endorser for Countrywide Home
17 Loans, Inc.
18 Q Okay. And, I mean, can you explain why you, in
19 particular? I mean, how is that established?
20 A Just lucky.
21 Q I mean, I know this is going to sound silly, but
22 was there some competition for it? Did they come to you
23 and say, “Ms. Sjolander, we choose you?” I mean, how did
24 you come to be designated the person?
25 A It is the position I held within Countrywide.
1 Q Okay. And did you know that going in; you know,
2 if you take this job, you’re going to be the endorser?
3 Was that explained to you at some point?
4 A I knew that my previous boss was the endorser,
5 yes.
6 Q Oh, okay. Now, we covered this, that other
7 people stamped your signature and the other — her name
8 is — oh, it’s Laurie Meder?
9 A Meder.
10 Q Okay. So other people have a stamp with her
11 name and your name on it, and how do those people have
12 the authority to put her name and your name on a note for
13 it to be an effective endorsement?
14 A With my name, they have a power of attorney.
15 Q And what does the power of attorney say?
16 A The power of attorney allows them to place my
17 endorsement stamp on collateral.
18 Q How do they come to have your power of attorney?
19 A I gave that to them.
20 Q But, I mean, in what sort of process? You know,
21 how does someone at Recontrust — I mean, I understand
22 that a power of attorney document exists, I’m assuming;
23 correct?
24 A Yes.
25 Q And how do those people come to operate under
1 it?
2 A It’s common, standard practice.
3 Q I may not be asking it quite right. I guess
4 what I’m asking is: Do they — the people who actually
5 use the stamps — is there more than one, or is there
6 just one stamp? I said “stamps” multiple. Is there only
7 one, or is there –
8 A No, there’s multiple stamps.
9 Q So do these people sign something that says, “I
10 understand I’m under Michele Sjolander’s power of
11 attorney”?
12 A Once again, you would have to look at the desk
13 procedures for Recontrust, and you would have to talk to
14 someone at Recontrust.
15 Q So that’s your understanding that you — did you
16 sign a power of attorney document?
17 A Yes, I did.
18 Q And, I mean, can you explain just in — you
19 know, in general, not word for word what it says, but
20 what does it purport to grant as power of attorney?
21 A It grants Recontrust. They can endorse and
22 assign notes on behalf of myself.
23 Q And do you know if this applies to a select
24 group of people?
25 A I do not have — I would have to read the
1 document.
2 Q Okay. But just to clarify, once again, you
3 don’t actually know the legal mechanism by which these
4 people with the stamps operate under this power of
5 attorney?
6 A As I said, I would have to go back through all
7 of the documentation that surrounds the power of
8 attorney, and Recontrust has desk procedures, and it
9 would be their procedures for them to assign that, to
10 place the stamp on the collateral.
11 Q And this was a procedure in 2007, what we’re
12 talking here is 2007?
13 A Correct.
14 Q And to the present?
15 A No.

<SNIP>

4 Q All of it, okay. Let’s see. Now, you mentioned
5 documents that you had reviewed. The AS-400, that’s a —
6 can you just refresh my memory? What was that again?
7 A A servicing system.
8 Q A servicing system, okay. Now, when you looked
9 over these records and documents before that you
10 mentioned before, where were you when you looked at
11 those?
12 A Simi Valley.
13 Q Simi Valley. And where were the documents that
14 you were looking at?
15 A At that time, they were brought into my office.
16 Q Do you have any idea where they were brought
17 from?
18 A They were printed off the system.
19 Q Printed off the system.
20 A From one of my associates.
21 Q Is that a computer system?
22 A As I said, the collateral tracking is printed
23 off the AS-400, which is our servicing system. The
24 investor number commitment was printed off — it’s a
25 web-based application from secondary marketing. It’s
1 printed off of that. The note was printed off of our
2 imaging system. And I think in this case I asked for a
3 copy of the note showing the endorsements, because in our
4 imaging system it does not — the note is actually imaged
5 prior to my endorsement stamp being in place. So I had
6 my associate contact the bank, which is Recontrust, to
7 get a copy of the original note to show my endorsement
8 stamps, because in imaging it is not shown.
9 Q So if a copy is made of a note that you got from
10 Recontrust, it doesn’t have an endorsement? Is that what
11 you’re saying?
12 A From our bank, it does. In our imaging system,
13 it does not. The note is imaged prior to an
14 endorsement — in ’07, the note is imaged prior to an
15 endorsement being placed on the note. So if you look in
16 our imaging system, you wouldn’t see the chain of title
17 of endorsement.
18 Q And where would you see that?
19 A On the original note.
20 Q Which is — which is where?
21 A In this case, it was in the Fannie Mae vault in
22 Simi Valley, California.
23 Q We’ll come back to the Fannie Mae vault. Okay.
24 So they’re printed off in AS-400 imaging system.
25 A AS-400 and the imaging system are two different
systems.
2 Q Oh, you said AS-400 is a servicing software
3 platform of some type?
4 A Yes.
5 Q And the imaging system, what — can you describe
6 that?
7 A It’s a —
8 Q You know —
9 A It’s when all of the collateral documents and
10 credit file documents are imaged after the closing of a
11 loan, and they are put in our imaging system, and we can
12 go into the system by loan number and pull up the
13 documentation of a loan —
14 Q I guess —
15 A — if you have access to the system.
16 Q But imaging, I mean, I’m imagining a scanner of
17 some sort. Is that what it is?
18 A It is not my area. I cannot tell you.

continue below…

[ipaper docId=86409969 access_key=key-1jwwt069dbt1xut3euia height=600 width=600 /]

 

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUDComments (8)

BELL v. COUNTRYWIDE | Latest foreclosure ruling sides with Utah homeowners  Lawsuit » In split with other judges, jurist says BofA unit can’t rely on Texas law.

BELL v. COUNTRYWIDE | Latest foreclosure ruling sides with Utah homeowners Lawsuit » In split with other judges, jurist says BofA unit can’t rely on Texas law.


SLTrib-

Contrary to the findings of two other federal judges in Utah, U.S. District Judge Bruce Jenkins has ruled that Bank of America must follow state law when it forecloses on homeowners in this state.

Jenkins’ decision widens the split on the federal bench over legal questions about whether Bank of America’s ReconTrust unit has been illegally foreclosing on Utah homeowners. It also ups the stakes by declaring that a rule issued by the Comptroller of the Currency is contrary to Congress’ intent in passing laws that govern national banks.

[THE SALT LAKE TRIBUNE]

Full ruling below courtesy of leagle followed by PDF.

BELL v. COUNTRYWIDE BANK, N.A.

TIMOTHY R. BELL, an individual JENNIFER BELL, an individual, Plaintiffs, v. COUNTRYWIDE BANK, N.A. d/b/a BANK OF AMERICA CORPORATION, a Delaware corporation; BAC HOME LOANS SERVICING, LP, a Texas limited partnership; RECONTRUST COMPANY, N.A., a national association and DOES 1-5, Defendants.

 Civil No. 2:11-CV-00271-BSJ.

United States District Court, D. Utah, Central Division.
March 15, 2012.

Timothy R. Bell, an individual, Plaintiff, represented by Abraham C. Bates, MUMFORD RAWSON & BATES PLLC, Steven D. Crawley & Nariman Noursalehi, WASATCH ADVOCATES.
Jennifer Bell, an individual, Plaintiff, represented by Abraham C. Bates, MUMFORD RAWSON & BATES PLLC, Steven D. Crawley & Nariman Noursalehi, WASATCH ADVOCATES.
Countrywide Bank NA, a Delaware corporation doing business as Bank of America, Defendant, represented by Philip D. Dracht, FABIAN & CLENDENIN, Amy Miller, MCGUIRE WOODS LLP (DC), PRO HAC VICE & Philip C. Chang, MCGUIRE WOODS LLP (DC), PRO HAC VICE.
BAC Home Loans Servicing, a Texas limited partnership, Defendant, represented by Philip D. Dracht, FABIAN & CLENDENIN, Amy Miller, MCGUIRE WOODS LLP (DC), PRO HAC VICE & Philip C. Chang, MCGUIRE WOODS LLP (DC), PRO HAC VICE.
Recontrust Company NA, a national association, Defendant, represented by Philip D. Dracht, FABIAN & CLENDENIN & Amy Miller, MCGUIRE WOODS LLP (DC), PRO HAC VICE.

 

MEMORANDUM OPINION & ORDER
BRUCE S. JENKINS, Senior District Judge.
I. INTRODUCTION

This matter arises out of plaintiffs’ alleged default on a promissory note secured by a deed of trust on their primary residence. On October 8, 2009, defendant ReconTrust, a successor trustee, recorded with the Salt Lake County Recorder a notice of default and election to sell plaintiffs’ property to collect on the note.1 Plaintiffs filed a complaint challenging the prospective sale in Third District Court, Salt Lake County, Utah. Defendants subsequently removed the case to this court, alleging diversity.

At a hearing on August 30, 2011, plaintiffs represented that they “would like to bring an amended complaint seeking judicial determination about the right of ReconTrust [the successor trustee] to foreclose this trust deed.”2 Plaintiffs also requested leave to amend the complaint to state a cause of action for promissory estoppel on the loan modification issues.3 At that time, plaintiffs stated that “as to those two items, we’d like the Court’s leave to file an amended complaint and continue on our way.”4 The court granted leave to amend,5 ordering that plaintiffs file their amended complaint by September 16, 2011.6

Plaintiffs filed an amended complaint on September 15, 2011,7 which asserted the following among other things: (1) absence of authority of ReconTrust and “preliminary injunction” (as against all defendants), (2) breach of an alleged modified contract (as against BAC and BAC Servicing), and (3) promissory estoppel (as against BAC and BAC Servicing).

On September 30, 2011, defendants filed a Rule 12(b)(6) motion to dismiss for failure to state a claim,8 arguing that the complaint exceeded the authorization to amend. Although defendants assert that plaintiffs’ claim for preliminary injunction “is not a claim at all but rather a form of relief that cannot constitute an independent cause of action,”9 paragraphs 52-56 of the amended pleading adequately raise the question as to whether ReconTrust has authority to conduct nonjudicial foreclosures on real property in Utah.

The question is of continuing importance because Utah Code Ann. § 57-1-23.5(2) (Supp. 2011)10 provides a private cause of action to a trustor whose real property has been the subject of an unauthorized sale by an unauthorized person. Plaintiffs assert ReconTrust is unauthorized to “foreclose.”

Defendants may have a point that plaintiffs may have exceeded the scope of the court’s leave to amend,11 but the court need not address the promissory estoppel claim nor the breach of contract issue at this time. The immediate and substantive question before the court is whether ReconTrust has authority to sell real property at a nonjudicial foreclosure sale in Utah.

On November 10, 2011, defendants’ motion came on for hearing and was argued to the court, at which time the court reserved on the matter and requested supplemental briefing from both parties as to the legislative history of 12 U.S.C. § 92a. Curiously, at the hearing, defendants notified the court for the first time that on November 2, 2011, ReconTrust had been succeeded as trustee by an attorney named Armand J. Howell.12 Defendants then asserted that plaintiffs’ claim as to ReconTrust had become moot.13 In light of Mr. Howell’s recent appointment as successor trustee, the court also requested the parties to brief whether the ReconTrust issue was capable of repetition.14

II. DISCUSSION

At this point, the court need only determine whether to grant or deny defendants’ motion to dismiss.

“While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.”15 While “the pleading standard Rule 8 announces does not require detailed factual allegations, . . . it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.”16

Prior to dealing with the substantive question, the court must first determine whether plaintiffs’ claim is now moot.

A. Plaintiffs’ claim against ReconTrust is not moot

This court’s jurisdiction and constitutional authority under Article III of the Constitution do not extend to moot cases, but only to actual cases or controversies.17 The mootness doctrine is grounded in the idea that “`federal courts only decide actual, ongoing cases or controversies,'”18 and that “a case or controversy no longer exists when it is impossible to grant any effectual relief.”19

However, a case is not moot if it “falls within a special category of disputes that are `capable of repetition’ while `evading review.'”20 Two elements must be present for a case to fall within this exception: “(1) the challenged action was in its duration too short to be fully litigated prior to its cessation or expiration, and (2) there was a reasonable expectation that the same complaining party would be subjected to the same action again.”21

The Supreme Court has stated that a federal court’s “concern in these cases, as in all others involving potentially moot claims, [is] whether the controversy [is] capable of repetition and not . . . whether the claimant ha[s] demonstrated that a recurrence of the dispute was more probable than not.”22 Indeed, the possibility of recurrence need not be “established with mathematical precision,” but rather the court need only find a “reasonable expectation” of repetition.23 Certainly, the bar is not high for a party to withstand a challenge for mootness.

When presented with a question of mootness the court also has an “interest in `preventing litigants from attempting to manipulate the Court’s jurisdiction.'”24 “The concern is that a party’s change in position may be temporary and thus abandoned once the litigation ends.”25 Therefore, it is “well settled that a defendant’s voluntary cessation of a challenged practice does not deprive a federal court of its power to determine the legality of the practice.”26 In cases where the court is concerned with a party’s potential manipulation of the court’s jurisdiction, the Tenth Circuit looks at two additional factors: (1) whether “it is not `absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur[,]'”27 and (2) whether the litigant is attempting to seal a favorable decision from review.28

Additionally, there are certain matters that come before a court that are too important to be denied effective review; for example, when the nature of the issue is sufficiently compelling in relation to the enforcement of the laws and the private rights involved.29

Here, defendants assert that “Plaintiffs cannot allege a live case or controversy vis-à-vis ReconTrust and this Court cannot grant Plaintiffs any effectual relief as to the preliminary injunction claim”30 because ReconTrust is no longer the trustee on the plaintiffs’ deed of trust, and “in fact, ReconTrust ceased operations in Utah in October 2011.”31

This court disagrees. The question of mootness arose on November 2, 2011, when defendants substituted a licensed Utah attorney as trustee in the place of ReconTrust. However, plaintiffs and others are certainly capable of being subjected to ReconTrust’s actions once again. Plaintiffs correctly assert that the “beneficiary may appoint a successor trustee at any time,”32 meaning that there is nothing prohibiting defendants from again substituting ReconTrust as successor trustee at a later date.

Although defendants represent that ReconTrust ceased operations in Utah in October 2011, they have supplied this court with one order and one memorandum decision and order from cases in the District of Utah wherein ReconTrust continued to prosecute actions against Utah homeowners as late as December 2011 and February 2012.33 There was no specific representation that ReconTrust would comply with the Utah statutes in the future. It is of course curious that ReconTrust later provided to the court supplemental authority and further argued that ReconTrust did not have to comply with the Utah statutes. Thus, it is not absolutely clear to this court that ReconTrust’s future compliance with Utah statutes can reasonably be expected.

ReconTrust relies on two decisions which apply Texas law to a national bank’s fiduciary activities in Utah.34 The cases on this issue within the District of Utah are evenly split.35 One of them was appealed.36 The Tenth Circuit did not have opportunity to pass on the matter because the plaintiff voluntarily dismissed her complaint in the underlying action prior to the Tenth Circuit having opportunity to issue an opinion.37

The substitution of an attorney as successor trustee occurred on November 2, 2011. The hearing on the motion to dismiss was set for November 10, 2011. Despite having eight days (four days, not including weekends and the dates of substitution and hearing) to notify the court of the substitution—and possibly submit a supplemental brief as to the potential mootness issue—defendants did not notify the court of the substitution until the November 10, 2011 hearing was well underway and 24538 days after the case was commenced.39

The parties have raised a compelling question. Further, the private rights of many Utah citizens are potentially involved. The matter is too important to be denied effective review.

B. ReconTrust is not authorized to exercise a power of sale in a non-judicial foreclosure action within the State of Utah

Utah statutes require banks—including Utah-chartered banks—to foreclose trust deeds only through identified trustees. The question for decision is direct: Does ReconTrust, a Texas corporation, and by definition a “national bank”—although it neither takes deposits nor makes loans—have the power to conduct non-judicial foreclosures in Utah of trust deeds on real property located in Utah without complying with Utah statutes? The direct answer is no. It does not have such power.

A state bank which seeks to foreclose on real property in Utah must comply with Utah law. A federally chartered “bank” which seeks to foreclose on such property must comply with Utah law as well. The reason is found within the federal statutes, the history of federal legislation, as well as principles of Federalism.

Defendants—and the court decisions to which they cite40—rely heavily on 12 C.F.R. § 9.7(d) (2011), a final interpretive rule issued by the Office of the Comptroller of the Currency (“the Comptroller”) which interprets the governing federal statute, 12 U.S.C.A. § 92a (2001). However, none of the decisions to which defendants cite—nor any that this court has examined—have questioned whether the Comptroller’s interpretation deserves deference.41

In determining whether the court should give such deference to the Comptroller’s interpretation of § 92a of the National Bank Act the court applies the Chevron test, which states that

[w]hen a court reviews an agency’s construction of the statute which it administers, it is confronted with two questions. First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.42

In a more recent case, the Supreme Court has stated that “[u]nder the familiar Chevron framework, we defer to an agency’s reasonable interpretation of a statute it is charged with administering.”43

Accordingly, in determining whether the Comptroller’s opinion deserves deference, the court first looks to whether Congress has addressed the precise question at issue, and if Congress has not, the court will then determine whether the Comptroller’s interpretation is based on a permissible construction of the statute, i.e., whether the interpretation is reasonable.

1. The interplay between 12 U.S.C. § 92a and 12 C.F.R. § 9.7(d)

ReconTrust is chartered as a “national bank,” and is governed by the National Bank Act, 12 U.S.C. § 1 et seq. As part of the National Bank Act, 12 U.S.C. § 92a specifically discusses a national bank’s power to act as trustee. Because the Comptroller’s final rule purports to interpret 12 U.S.C. § 92a, this court’s starting point is the plain language of the statute itself. Pertinent also is the intent of Congress as reflected in the language of the statute and its legislative history.

The statute states:

(a) Authority of Comptroller of the Currency

The Comptroller of the Currency shall be authorized and empowered to grant by special permit to national banks applying therefor, when not in contravention of State or local law, the right to act as trustee, executor, administrator, registrar of stocks and bonds, guardian of estates, assignee, receiver, committee of estates of lunatics, or in any other fiduciary capacity in which State banks, trust companies, or other corporations which come into competition with national banks are permitted to act under the laws of the State in which the national bank is located.

(b) Grant and exercise of powers deemed not in contravention of State or local law

Whenever the laws of such State authorize or permit the exercise of any or all of the foregoing powers by State banks, trust companies, or other corporations which compete with national banks, the granting to and the exercise of such powers by national banks shall not be deemed to be in contravention of State or local law within the meaning of this section.44

Congress has spoken directly to this issue: the “State” referenced in § 92a refers, inter alia, to the State where the trust activity occurs—Utah in this case. The statute is clear. However, even if the statute is not clear and demands interpretation, this Court concludes that the Comptroller’s interpretation in 12 C.F.R. § 9.7(d) modifies the statute and is unreasonable—if not irrational—and therefore, does not deserve deference. ReconTrust must comply with Utah law when engaging in trust activities within the State of Utah, which includes trust deed foreclosures. This court further concludes that ReconTrust, by definition a national bank, competes with banks, not title insurance companies. Rather, the Utah Legislature intended that title insurance companies and national or state-chartered banks work in concert with each other when conducting non-judicial foreclosures within the State of Utah.

Defendants argue that § 92a must be read in conjunction with 12 C.F.R. § 9.7(d) (2011), which states that

[f]or each fiduciary relationship, the state referred to in section 92a is the state in which the bank acts in a fiduciary capacity for that relationship. A national bank acts in a fiduciary capacity in the state in which it accepts the fiduciary appointment, executes the documents that create the fiduciary relationship, and makes discretionary decisions regarding the investment or distribution of fiduciary assets. If these activities take place in more than one state, then the state in which the bank acts in a fiduciary capacity for section 92a purposes is the state that the bank designates from among those states.45

Defendants assert that when read in conjunction with 12 C.F.R. § 9.7(d), the “State or local law” referred to in 12 U.S.C. § 92a(a) is clearly Texas law—as opposed to Utah law—because ReconTrust accepts fiduciary appointment, executes the documents that create the fiduciary relationship, and makes discretionary decisions regarding the investment or distribution of fiduciary assets in Texas. Defendants have called the court’s attention to two recent decisions—both within the District of Utah—which arrive at this conclusion, relying on 12 C.F.R. § 9.7(d).46 Although aware of these decisions, this court sees the issue differently.

Texas law allows national banks to act as trustee under deeds of trust, and to exercise the power of sale with regard to such deeds of trust in Texas.47 Utah law does not.48 Because Texas law allows its own state-chartered banks to exercise the power of sale in foreclosure actions in Texas, pursuant to 12 U.S.C. § 92a, national banks are also allowed to exercise the power of sale within Texas. However, because Utah law does not allow Utah state-chartered banks to exercise the power of sale in foreclosure actions, plaintiffs argue that § 92a’s contravention clause (“when not in contravention of State or local law”) also prohibits national banks from exercising the power of sale in Utah.

The threshold issue is whether the court should give credence to 12 C.F.R. § 9.7(d)’s reading of 12 U.S.C. § 92a, as the defendants insist.

(a) Whether Congress has directly spoken to the precise question at issue

The precise question at issue is this: to which “State(s)” does 12 U.S.C. § 92a(a) refer? After carefully examining the statute’s plain meaning, together with the legislative history of the statute, the court has determined that Congress has directly addressed this precise question.

The court begins its analysis by looking to the plain meaning of the statute.49 “The plainness or ambiguity of statutory language is determined by reference to the language itself, the specific context in which that language is used, and the broader context of the statute as a whole.”50 12 U.S.C. § 92a(a) sets forth the Comptroller’s authority to grant national banks the power to act as trustee “when not in contravention of State or local law.” The State law to which § 92a(a) refers is the law “of the State in which the national bank is located.”51 Subsection (b) further states that “whenever the laws of such State authorize” State banks to act as trustee, the granting of such trustee powers to national banks “shall not be deemed to be in contravention of State or local law.”52

The statute’s plain meaning indicates that the national bank is “located” in each state in which it carries on activities as trustee.

The Comptroller’s rule—without providing reasons therefor—limits its interpretation of the location where a national bank acts as trustee to the State in which the bank performs its “core fiduciary functions.”53 The Comptroller has interpreted “core fiduciary functions” to mean “accept[ing] the fiduciary appointment, execut[ing] the documents that create the fiduciary relationship, and mak[ing] discretionary decisions regarding the investment or distribution of fiduciary assets.”54 Notably, the Comptroller failed to include as a core fiduciary function engaging in an act which liquidates the trust assets, e.g., engaging in a non-judicial foreclosure of real property where the trust asset is located. This makes no sense

Such an artificial exclusion contravenes the plain meaning of the statute. When acting as a trustee of a trust deed, one necessarily acts in the capacity as trustee in the State where the real property is located, where notice of default is filed, and where the sale is conducted. In this case, ReconTrust is acting as trustee of a trust deed for real property in the State of Utah. ReconTrust, as trustee, filed a notice of default and election to foreclose on real property within the State of Utah.

The notice is filed in Utah. The sale is conducted in Utah, often on the steps of the local county courthouse. Those acts do not occur in Texas. Those acts may not be performed by Utah-chartered banks. Thus, those acts may not be performed by national banks in Utah. That dual system, it seems to me, is Federalism at its most elementary.

Other courts have also reached this conclusion. In Cox v. ReconTrust Co., N.A.,55 the court stated that it was not convinced by

ReconTrust’s argument that § 92a(b) dictates that the court look to some state law other than Utah state law to evaluate ReconTrust’s foreclosure activities in Utah. .. . Here, . . . ReconTrust is conducting foreclosure activities on behalf of Bank of America in several states, including Utah. . . .

Under a straight forward reading of § 92a(b), this court must look to Utah law in its analysis of whether ReconTrust’s activities in Utah exceed ReconTrust’s trustee powers. The powers granted to ReconTrust under federal law in this case are limited by the powers granted by Utah state law to ReconTrust’s competitors. Accordingly, the extent of ReconTrust’s federal powers must be determined by reference to the laws of Utah, not by reference to the laws of some other state. Under Utah law, the power to conduct non-judicial foreclosure is limited to attorneys and title companies. The scope of the powers granted by federal law is limited to the same power Utah statute confers on ReconTrust’s Utah competitors. . . .56

The legislative history of 12 U.S.C. § 92a demonstrates that Utah law should apply.

The phrase, “when not in contravention of State or local law” originated with § 11(k) of the Federal Reserve Act of 1913.57 Although legislative history does not exist as to the precise meaning of the phrase in § 11(k), a nearly identical phrase was used in § 8 of the same Act. Section 8 provided a means by which state banks could convert to national banks. However, the section placed a condition on state banks that desired to convert to national banks: “Provided, however, That said conversion shall not be in contravention of the State law.”58 When the bill which eventually became the Federal Reserve Act of 1913 was introduced on the floor of the Senate on December 1, 1913, § 8 also contained the word “local” so as to read, “Provided, however, That said acts are not in contravention of the State or local law.”59 That wording of § 8 is almost identical to the language found in § 11(k) that now exists as 12 U.S.C. § 92a(a).

Dialogue as to the purpose of this language that occurred on the floor of the Senate on December 15, 1913 proves instructive:

MR. BURTON: On page 28, lines 6 and 7, there is this proviso: Provided, however, That said acts are not in contravention of the State or local law.

Why should this reservation appear in the preceding section and not in section 9? The preceding section pertains to a change in the form of organization from a State bank to a national bank, while this section, as I have already said, relates to membership by a State bank in this new system. Why is not a reservation of that kind equally as necessary in this section as in the preceding section?

MR. OWEN: Mr. President, I will reply to the Senator that, in my judgment, it is not necessary in the preceding section.

MR. BURTON: That is, it goes without saying?

MR. OWEN: It is merely put in as a courteous observation. In reality I do not think it is actually necessary, because no State bank having its charter under a State law could violate the law of its own being. It was thought well, however, to put it in to show that there was no purpose on the part of Congress to disregard the local State law, but merely to give its assent provided the State law permitted it to be done.60

Senator Owen’s61 response is a clear indication that Congress did not intend to disregard or contravene local State law when giving state banks the opportunity to convert to national banks. That is to say, if State law prohibited a state bank from converting to a national bank, the Federal Reserve Act would not contravene that State’s law, and the state bank would not be able to convert to a national bank.

In light of the near-identical nature of the phrases in §§ 8 and 11(k), it seems clear that Congress intended to preclude any inference that a national bank may disregard local State law in performing its duties as trustee. A contrary interpretation draws precisely that inference and effectively preempts the laws of the local State (presumably the State where the foreclosed property is located and the trustee executes the power of sale) in favor of the laws of another State (the State where the national bank performs its “core fiduciary functions”); this is essentially the effect of the Comptroller’s final rule.

Shortly after the enactment of the Federal Reserve Act of 1913, the Supreme Court had opportunity to interpret § 11(k) when the Michigan Supreme Court upheld a state law that prohibited national banks from exercising trust powers within Michigan.62 Interestingly, the laws of Michigan allowed state banks to exercise trust powers;63 thus the effect of the Michigan law was to discriminate against national banks. The Supreme Court reversed the decision of the Michigan Supreme Court,64 holding that if State law allows a state bank to conduct certain business, the State must also allow a national bank to conduct that same business so long as the Federal Reserve Board grants the national bank permission to do so.65

The next year, Congress successfully codified the Supreme Court’s holding in Fellows by passing H.R. 11283,66 which in present-day form comprises the latter-half of subsection 92a(a) and the entirety of subsection (b). Prior to the passage of H.R. 11283, the House Committee on Banking and Currency’s report regarding the bill stated that

[u]nder a recent decision of the United States Supreme Court it is clearly settled that Congress has the power to confer authority upon national banks to act in these fiduciary capacities, where such powers are exercised by trust companies, State banks, or other competing corporations, even though the State law discriminates against national banks in this regard. The terms of section 11(k) are extended, therefore, to permit such powers to be granted to national banks in those States in which the State law discriminates against national banks in this respect.67

Congress thus intended to create an equal playing field for national banks, and was wary of any potential competitive advantage afforded to State institutions by State law.

Decades later, through the passage of the National Bank Act of 1962, Congress removed the power originally vested in the Federal Reserve Board under § 11(k) and transferred it to the Comptroller of the Currency.68 This Act of Congress effectively repealed69 the language of § 11(k) of the Federal Reserve Act and reenacted it as 12 U.S.C. § 92a(a)-(b). On September 13, 1962, the Senate Committee on Banking and Currency issued Senate Report No. 2039, urging the passage of the National Bank Act of 1962.70 Therein, the committee included a “General Statement” which made abundantly clear that

this bill will result in no change in the present distribution of power between Federal and State Governments, nor will it cause any weakening of the principles underlying the dual banking system. . . . It would not give authority to the Comptroller of the Currency to exercise any supervisory functions over State banks.71

The Office of the Comptroller of the Currency defines “dual banking system” as

parallel state and federal banking systems that co-exist in the United States. The federal system is based on a federal bank charter, powers defined under federal law, operation under federal standards, and oversight by a federal supervisor. The state system is characterized by state chartering, bank powers established under state law, and operation under state standards, including oversight by state supervisors.72

Therefore, when the plain language of § 92a is read in conjunction with the legislative history of the contravention clause, it is certain that Congress did not intend the laws of one State to pre-empt the laws of another State in dealing with a national bank. Rather, Congress made abundantly clear that “there was no purpose on the part of Congress to disregard the local State law, but merely to give its assent provided the State law permitted it to be done.”73 In light of the foregoing, this court determines that Congress has spoken to the precise question at issue, and has determined that the law that shall apply to a national bank acting as trustee under a trust deed is the local State law, which in this instance is Utah law.

(b) Whether the Comptroller’s interpretation is reasonable (in the event that the statute is silent or ambiguous)

Although the reasonableness of the Comptroller’s interpretation need only be addressed if Congress has not previously spoken as to the precise question at issue, which it has, for the sake of completeness, the court will also examine the reasonableness of the Comptroller’s interpretation found in 12 C.F.R. § 9.7(d).

The Comptroller is charged with interpreting the statute in a reasonable manner. It is not charged with amending the law. The Supreme Court has stated in regards to 12 U.S.C. § 92a(a) that “[n]ot surprisingly, this Court has interpreted those explicit provisions to mean what they say.”74 If § 92a is to mean what it says (i.e., the plain meaning), the reference to “State or local law”at a minimum should be construed to mean the State in which the trust activity occurs.

With the legislative history of § 92a in mind, it is important to note that the Comptroller was not always a proponent of the interpretation found in 12 C.F.R. § 9.7(d). Indeed, in large part, the Comptroller based 12 C.F.R. § 9.7(d) on two interpretive letters issued in October 1999.75 But rarely mentioned in this rulemaking is the Comptroller’s Interpretive Letter No. 695, which issued in December 1995.76

The Comptroller issued Interpretive Letter No. 695 in response to a national bank’s inquiry as to whether the national bank had authority to conduct fiduciary activities on a nationwide basis through trust offices in various states.77 Therein, the Comptroller stated that the effect of section 92a is that in any specific state, the availability of fiduciary powers is the same for out-of-state national banks or for in-state national banks and is dependent upon what the state permits for its own state institutions. A state may limit national banks from exercising any or all fiduciary powers in that state, but only if it also bars its own institutions from exercising the same powers. Therefore, a national bank with its main office in one state (such as the proposed trust bank) may conduct fiduciary business in that state and other states, depending upon — with respect to each state — whether each state allows its own institutions to engage in fiduciary business.78

This interpretation is certainly reasonable as it—consistent with Congress’ intent—precludes a competitive advantage as between state-chartered banks and national banks. Such an interpretation also precludes a competitive advantage between in-state national banks and out-of-state national banks. This principle was further emphasized by the Comptroller in Letter No. 695:

This interpretation of the statute also fosters desirable public policies. First, every national bank offering fiduciary services in a given state will have the same authority to conduct fiduciary business. A national bank conducting fiduciary business and administering trust assets at a trust office will be subject to the same standards irrespective of whether the office is part of an in-state national bank or an out-of-state national bank. Second, there will be a level playing field for enhanced competition in the provision of fiduciary services within each state, because more potential providers will be able to compete on similar terms.79

This means that a national bank based in Texas which performs fiduciary functions in Utah cannot have a competitive advantage over a Utah-based national bank that performs its fiduciary functions in Utah. However, under the Comptroller’s final rule, a national bank based in Texas does have a competitive advantage over a national bank based in Utah as well as Utah-chartered banks. Such a result is simply contrary to Congress’ clear intent in enacting § 92a. The Comptroller further stated that

section 92a authorizes national banks to offer fiduciary services in multiple states, but then conditions the exercise of that power within each state on a state-by-state basis under the same test: is the exercise of fiduciary powers by national banks prohibited by state law, and even if it is, does that state permit its state institutions to exercise these powers or not. This result is consistent with other banking statutes that treat a single national bank as present in different states for the purposes of that statute.80

The Comptroller cited various cases to support its position that “for the purposes of these statutes, a national bank is not located only in the place of its main office but can be `located,’ `situated’ or `existing’ in, or be a `citizen’ of, multiple cities, counties, or states.”81 Therefore, in light of Interpretive Letter No. 695, it seems unreasonable, if not irrational, for the Comptroller to now posit that a national bank is only “located” in the place where it conducts “core fiduciary activities.”82

ReconTrust relies on two other interpretive letters83 issued by the Comptroller. Those letters were issued nearly four years after Interpretive Letter No. 695 and ostensibly provide the foundation for the Comptroller’s issuance of 12 C.F.R. § 9.7.84 Seemingly contradicting the plain meaning of § 92a’s contravention clause as well as Interpretive Letter No. 695, the Comptroller in Interpretive Letter No. 866, stated that the location of a national bank is not determined by the location where the trust assets are located,85 but rather, where the bank acts in a fiduciary capacity.86 The Comptroller determined that a bank “acts in a fiduciary capacity” where it reviews proposed trust appointments, executes trust agreements, and makes discretionary decisions about the investment or distribution of trust assets.87 To then say that a bank does not “act in a fiduciary capacity” when it exercises the trustee’s power of sale and does so in Utah is fantasy.

Indeed, how the Comptroller decided to limit the above-listed activities as a trustee’s core fiduciary functions, excluding the liquidation or disposal of trust assets, is nowhere explained.

The Comptroller, after issuing an interpretive letter (No. 695) true to the statute’s plain meaning and Congress’ apparent intent as evinced by Senator Owens’ statement in 1913, and Congress’ subsequent acts (and corresponding statements) in 1918 and 1962, reversed its interpretation of the statute to now posit that the State law referred to in § 92a is solely that of the State where the trustee accepts the fiduciary appointment, executes the documents that create the fiduciary relationship, and makes discretionary decisions regarding the investment or distribution of fiduciary assets.

Interestingly, Letter Nos. 866 and 872 also contradict the view expressed in an article88 co-authored by John D. Hawke, Jr.,89 which was written prior to Mr. Hawke’s appointment as the Comptroller. Mr. Hawke wrote in pertinent part:

Section 92a specifically provides for deference to state law in defining the powers of a national bank to act as a fiduciary, and does not operate as a grant of authority to create federal common law. Section 92a authorizes the Comptroller to grant to national banks the right to act as trustee and “in any other fiduciary capacity in which State banks, trust companies, or other corporations which come into competition with national banks are permitted to act under the laws of the State in which the national bank is located.” On its face, section 92a is geared to principles of state law. Congress has specifically designated the scope of a national bank’s trust powers to be coextensive with the trust powers of state banks in the state where the bank is located. Because the trust powers of state banks vary from state to state, so too do the trust powers of national banks.

The statutory objective is to attain competitive equality between national banks and their state-chartered counterparts in the exercise of trust powers. Congress clearly intended national banks acting as trustees in a given state to have the same rights and duties as local state banks.90

Mr. Hawke authored this passage prior to his appointment as Comptroller, and therefore, the above-excerpt was not written while serving in his official capacity. However, Mr. Hawke’s analysis strikes the court as reasonable and in line with § 92a’s plain meaning and Congress’ intent, whereas the final rule promulgated by the Comptroller does not. Moreover, nothing in the final rule explains why the final rule is preferable—let alone reasonable—to the interpretive approach taken in the above-quoted passage and in Interpretive Letter No. 695.

The Comptroller has conceded that “national banks are [not] divorced from the standards of state law in all respects.”91 Indeed, the Comptroller, in quoting the Supreme Court,92 stated that

national banks are “subject to the laws of the State, and are governed in their daily course of business far more by the laws of the State than of the Nation. All their contracts are governed and construed by state laws. Their acquisition and transfer of property, their right to collect their debts, and their liability to be sued for debts, are all based on state law.”93

Certainly a national bank concerns itself with the acquisition and transfer of property, and its right to collect debts—which are both governed and construed by State law94—when it acts as successor trustee on a deed of real property, and attempts to foreclose the same through a nonjudicial foreclosure sale.

In sum, the national statutes which created a dual banking system operate to deny out-of-state national banks any competitive advantage over local, state-chartered banks or in-state national banks. Such was and is the will of Congress as expressed in statutory language and legislative history, both consistent with the principles of Federalism, as reflected in the Tenth Amendment of the Constitution.

The Comptroller’s interpretation of § 92a, as set forth in 12 C.F.R. § 9.7(d), modifies the statute and gives out-of-state national banks a sizeable competitive advantage over their state-chartered counterparts and in-state national banks in states—such as Utah—where state-chartered banks and in-state national banks are not allowed to perform certain fiduciary functions, namely exercising the power of sale in non-judicial trust deed foreclosures.

Thus, 12 C.F.R. § 9.7(d) does not justify the deference contemplated in Chevron for agency construction of pertinent statutes.

There are fifty States. Each has its own legislature and each its own set of laws relating to state-chartered banks. Texas does not pass Utah banking laws. Utah does not pass Texas banking laws. Utah banks are limited by Utah laws as to the manner of conducting non-judicial foreclosures of real property. National statutes have recognized that local laws have a role to play in a dual banking system and have done so from at least 1913, when the Federal Reserve Act was passed and predecessor language was first installed in that Act.

2. The competition clause of 12 U.S.C. § 92a

12 U.S.C. § 92a(a) permits the Comptroller to grant a national bank the power to act in any fiduciary capacity that a state bank, corporation or organization “which come[s] into competition with national banks are permitted to act under the laws of the State in which the national bank is located.”

Driving the point home, Congress also enacted subsection (b), which provides that

[w]henever the laws of such State authorize or permit the exercise of any or all of the foregoing powers by State banks, trust companies, or other corporations which compete with national banks, the granting to and the exercise of such powers by national banks shall not be deemed to be in contravention of State or local law within the meaning of this section.95

The Supreme Court had an opportunity to examine the statute in Burnes Nat’l Bank v. Duncan,96 wherein Justice Holmes opined that the foregoing passages state “in a roundabout and polite but unmistakable way that whatever may be the State law, national banks having the permit of the Federal Reserve Board may act as executors if trust companies competing with them have that power.”97 The holding in Burnes Nat’l Bank also applies to national banks who wish to act as trustees so long as competing State institutions also act as trustees.

This is of no help to ReconTrust, a subsidiary of a national bank. It is not in competition with a bar member. It is not in competition with a title insurance company. Indeed, the statutes prohibit a bank from engaging in title insurance activity.98

Utah Code Ann. §§ 57-1-21, 57-1-23.5 were both drafted so that the fiduciaries contemplated in 12 U.S.C. § 92a (including both state banks and national banks acting as trustees) would have to work in concert with—not in competition with—title insurance companies and active members of the State bar. Indeed, a state or national bank, acting as trustee, must procure the services of either an active member of the State bar or title insurance company in order to comply with the Utah law.

Banks compete with banks. Indeed, ReconTrust’s status is by definition that of a national bank, and in this specialized and limited area of trust activity, it, like all banks must comply with local law.

III. CONCLUSION
In light of the foregoing, plaintiffs’ claim for declaratory relief under Utah Code Ann. § 57-1-23.5 satisfies the standards set forth in Twombly and Iqbal.

Because of ReconTrust’s lack of authority to exercise the power of sale in a non-judicial foreclosure action within Utah,

IT IS ORDERED that defendants’ motion to dismiss is hereby DENIED.


Footnotes


1. (See Pls.’ Third Am. Compl., filed Sept. 15, 2011 (dkt. no. 68) (“Pls.’ Compl.”), at Ex. C.)
2. (Transcript of Hearing, dated Aug. 30, 2011 (dkt. no. 77) (“Mot. Amend Hr’g Tr.”), at 5:7-9; see also id. at 6:11-13.)
3. (Id. at 5:19-22.)
4. (Id. at 5:23-24.)
5. (Id. at 22:19-20.)
6. (See id. at 23:17-24:9; Order, filed September 21, 2011 (dkt no. 69).)
7. (See Pls.’ Compl.) Plaintiffs titled the amended complaint as “Third Amended Complaint” when in fact it should have been titled “Second Amended Complaint.” Although on May 31, 2011 plaintiffs filed a motion to amend/correct their first amended complaint (dkt. no. 36),—and filed concurrently therewith a proposed second amended complaint (dkt. no. 38)—the court never granted that motion to amend. Accordingly, the proposed second amended complaint was never operative, and what plaintiffs have titled as the “Third Amended Complaint” is actually the “Second Amended Complaint.”
8. (See Defs.’ Mot. Dismiss Pls.’ Third Am. Compl., filed Sept. 30, 2011 (dkt. no. 70) (“Defs.’ Mot. Dismiss”).)
9. (See Defs.’ Mem. Supp. Mot. Dismiss Pls.’ Third Am. Compl. (dkt. no. 71) (“Defs.’ Mem.”), at 2.)
10. Subsection (2)(a) states that “[a]n authorized person who conducts an unauthorized sale is liable to the trustor for the actual damages suffered by the trustor as a result of the unauthorized sale or $2,000, whichever is greater.”
11. (See Defs.’ Mem. at 5-6.)
12. (Transcript of Hearing, dated Nov. 10, 2011 (dkt. no. 80) (“Mot. Dismiss Hr’g Tr.”), at 7:16-8:5, 33:17-19.)
13. (Id. at 33:12-16.)
14. (Id. at 72:22-73:3.)
15. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations and quotations omitted).
16. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (internal quotations omitted).
17. Iron Arrow Honor Soc’y v. Heckler, 464 U.S. 67, 70 (1983).
18. Lucero v. Bureau of Collection Recovery, Inc., 639 F.3d 1239, 1242 (10th Cir. 2011) (quoting Building & Constr. Dep’t v. Rockwell Int’l Corp., 7 F.3d 1487, 1491 (10th Cir. 1993)); see also Matthew I. Hall, The Partially Prudential Doctrine of Mootness, 77 Geo. Wash. L. Rev. 562, 571 (2009).
19. Chihuahuan Grasslands Alliance v. Kempthorne, 545 F.3d 884, 891 (10th Cir. 2008).
20. Turner v. Rogers, 131 S.Ct. 2507, 2514-15 (2011) (quoting S. Pac. Terminal Co. v. ICC, 219 U.S. 498, 515 (1911)).
21. Weinstein v. Bradford, 423 U.S. 147, 149 (1975) (per curiam).
22. Honig v. Doe, 484 U.S. 305, 319 n.6 (1988) (emphasis in original).
23. Id.
24. Wyoming v. U.S. Dep’t of Agric., 414 F.3d 1207, 1212 (10th Cir. 2005) (quoting City of Erie v. PAP’S A.M., 529 U.S. 277, 288 (2000)).
25. Id.
26. City of Mesquite v. Alladin’s Castle, Inc., 455 U.S. 283, 289 (1982). In Alladin’s Castle, a city exempted a business from a city ordinance in response to the business’ challenge that the ordinance was unconstitutional. However, after a state court decision was issued regarding the matter, the city adopted a new ordinance which repealed the business exemption. See id. at 286-87, 289.
27. Seneca-Cayuga Tribe of Okla. v. Nat’l Indian Gaming Comm’n, 327 F.3d 1019, 1028 (10th Cir. 2003) (quoting S. Utah Wilderness Alliance v. Norton, 301 F.3d 1217, 1236 n.17 (10th Cir. 2002)).
28. See Seneca-Cayuga Tribe, 327 F.3d at 1029 (“We, however, read City of Erie as expressing a generalized concern about manipulation of an appellate court’s jurisdiction to seal a favorable decision from review. Here, appellees’ conduct, while presumably not in bad faith, nonetheless implicates the concern over post-trial manipulation.”).
29. Cf. In re Carlson, 580 F.2d 1365, 1372 (10th Cir. 1978) (deciding to entertain the issue as to whether the district court’s judgment denying the IRS application was a final decision even though the petitioner’s business successor-in-interest had already voluntarily paid all the taxes, penalties, and interest of taxpayer Carlson).
30. (Defs.’ Supplemental Mem. Supp. Mot. Dismiss, filed Dec. 1, 2011 (“Defs.’ Supplemental Mem.”) (dkt. no. 83), at 8.)
31. (Id.)
32. Utah Code Ann. § 57-1-22(1)(a) (2010) (emphasis added).
33. Dutcher v. Matheson, 2:11-CV-666-TS (D. Utah Feb. 8, 2012) (Mem. Opinion & Order, dkt. no. 48); see also Garrett v. ReconTrust Co., N.A., 2:11-CV-00763-DS (D. Utah Dec. 21, 2011) (Order, dkt. no. 9).
34. Dutcher v. Matheson, 2:11-CV-666-TS (D. Utah Feb. 8, 2012) (Mem. Opinion & Order, dkt. no. 48); see also Garrett v. ReconTrust Co., N.A., 2:11-CV-00763-DS (D. Utah Dec. 21, 2011) (Order, dkt. no. 9).
35. Just as there are two District of Utah cases that apply Texas law to ReconTrust’s foreclosure operations in Utah, see cases cited supra note 34, there are also two District of Utah cases that apply Utah law on the same issue. See Cox v. ReconTrust Co., No. 2:10-CV-492-CW, 2011 WL 835893, at *6 (D. Utah March 3, 2011) (holding that Utah law applies to ReconTrust’s foreclosure activities within the State of Utah); see also Coleman v. ReconTrust Co., No. 2:10-CV-1099 (D. Utah Oct. 3, 2011) (Order Granting in Part and Denying in Part Motion to Dismiss, dkt. no. 87, at 2) (same).
36. See Cox v. ReconTrust Co., No. 2:10-CV-492-CW (D. Utah June 25, 2010) (Notice of Appeal of Interlocutory Decision, dkt. no. 47).
37. See Cox v. ReconTrust Co., N.A., No. 10-4117, Order at 2 (10th Cir. Aug. 18, 2011).
38. Plaintiffs filed their complaint in Third District Court, Salt Lake County, Utah on March 11, 2011.
39. (SeeMot. Dismiss Hr’g Tr. at 7:16-24, 33:12-23):MS. MILLER: In any event, a new substitution of trustee has been made since that time identifying another trustee. . . .

THE COURT: When was that done?

MS. MILLER: That was done in November of 2011.

THE COURT: Just a day or two ago.

MS. MILLER: A week or two ago, yes.

. . . .

MS. MILLER: We’d also like to point out that there is no immediate or irreparable injury in this case. ReconTrust is not even the appointed substitute trustee anymore, as we pointed out earlier, so the issue is moot—

THE COURT: Why so fast? I notice that you did that on the 2d of November.

MS. MILLER: Yes.

THE COURT: Okay.

MS. MILLER: Yes. The old notice was stale. We would not have been able to act on the old notice. And so a new notice was issued.

40. Dutcher v. Matheson, 2:11-CV-666-TS (D. Utah Feb. 8, 2012) (Mem. Opinion & Order, dkt. no. 48); see also Garrett v. ReconTrust Co., N.A., 2:11-CV-00763-DS (D. Utah Dec. 21, 2011) (Order, dkt. no. 9). Both the preceding cases held that Texas law applies to ReconTrust’s foreclosure activities in Utah. But see Cox v. ReconTrust Co., No. 2:10-CV-492-CW, 2011 WL 835893, at *6 (D. Utah March 3, 2011) (holding that Utah law applies to ReconTrust’s foreclosure activities within the State of Utah); see also Coleman v. ReconTrust Co., No. 2:10-CV-1099 (D. Utah Oct. 3, 2011) (Order Granting in Part and Denying in Part Motion to Dismiss, dkt. no. 87, at 2) (same).
41. See Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842 (1984).
42. Id. at 842-43.
43. Cuomo v. Clearing House Ass’n, 129 S.Ct. 2710, 2715 (2009) (emphasis added).
44. 12 U.S.C.A. § 92a(a)-(b) (2001) (emphasis added).
45. 12 C.F.R. § 9.7(d) (2011).
46. Dutcher v. Matheson, 2:11-CV-666-TS (D. Utah Feb. 8, 2012) (Mem. Decision & Order, dkt. no. 48, at 11 n.25); see also Garrett v. ReconTrust Co., N.A., 2:11-CV-00763-DS (D. Utah Dec. 21, 2011) (Order, dkt. no. 9, at 3).
47. See Tex. Fin. Code Ann. §§ 32.001, 182.001; see also Tex. Prop. Code Ann. §§ 51.0001, 51.0074.
48. See Utah Code Ann. §§ 57-1-23, 57-1-21 (2010) (allowing only an active member of the Utah State Bar or a title insurance company to exercise the power of sale).
49. Robinson v. Shell Oil Co., 519 U.S. 337, 340 (1997) (“Our first step in interpreting a statute is to determine whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case. Our inquiry must cease if the statutory language is unambiguous and `the statutory scheme is coherent and consistent.'” (quoting United States v. Ron Pair Enters., Inc., 489 U.S. 235, 240 (1989))).
50. Robinson, 519 U.S. at 341.
51. 12 U.S.C.A. § 92a(a) (2001).
52. Id. § 92a(b).
53. See Interpretive Letter No. 866, 1999 WL 983923, at Part II.B. (October 8, 1999).
54. 12 C.F.R. § 9.7(d) (2011); see also Interpretive Letter No. 866, 1999 WL 983923, at Part II.B. (adopted in substance by 12 C.F.R. § 9.7(d)).
55. No. 2:10-CV-492 CW, 2011 WL 835893, at *6 (D. Utah March 3, 2011). Plaintiff voluntarily dismissed the underlying district court action while the foregoing case was on appeal before the Tenth Circuit. Thus, the Tenth Circuit found that the appeal was rendered moot. Cox v. ReconTrust Co., N.A., No. 10-4117, Order at 2 (10th Cir. Aug. 18, 2011). Currently, this case and the companion Utah cases all are a form of repetition.
56. Id.; see also Coleman v. ReconTrust Co., No. 2:10-CV-1099 (D. Utah Oct. 3, 2011) (Order Granting in Part and Denying in Part Motion to Dismiss, dkt. no. 87, at 2) (“[T]he court agrees with the reasoning applied in Cox v. ReconTrust Company, N.A., 2011 WL 835893 (March 3, 2011 D. Utah).”).
57. Federal Reserve Act of 1913, Dec. 23, 1913, ch. 6 § 11(k), 38 Stat. 262. At the time of its passage, section 11(k) stated that “[t]he Federal Reserve Board shall be authorized and empowered To grant by special permit to national banks applying therefor, when not in contravention of State or local law, the right to act as trustee, executor, administrator, or registrar of stocks and bonds under such rules and regulations as the said board may prescribe.”
58. Id. § 8, 38 Stat. 258.
59. 51 Cong. Rec. S23 (December 1, 1913) (statement of Sen. Owen).
60. 51 Cong. Rec. S879 (December 15, 1913) (statements of Sens. Owen & Burton) (emphasis added).
61. Senator Owen was the Senate’s principal sponsor of the Federal Reserve Act of 1913.
62. First Nat’l Bank of Bay City v. Fellows, 244 U.S. 416, 421-22 (1917).
63. Id. at 421.
64. Id. at 423-24.
65. Id. at 426.
66. Act of Sept. 26, 1918, ch. 177, 40 Stat. 967, 968-69 (1918).
67. H.R. Rep. No. 65-479, reprinted in U.S. Serial Set vol. 7307 (1918).
68. National Bank Act of 1962, Pub. L. No. 87-722, 76 Stat. 668 (enacting H.R.12577).
69. “Subsection (k) of section 11 of the Federal Reserve Act . . . is repealed by [H.R. 12577] in a purely technical sense only. In effect, the provisions of that subsection become the first section of the bill, with the Comptroller of the Currency being substituted for the Board of Governors of the Federal Reserve System as the responsible administrative agency.” H.R. Rep. No. 87-2255, at 4, reprinted in U.S. Serial Set vol. 12433 (1962).
70. S. Rep. No. 87-2039, reprinted in 1962 U.S.C.C.A.N. 2735-36; see also H.R. Rep. No. 87-2255, reprinted in U.S. Serial Set vol. 12433 (1962) (adopted in substance by S. Rep. No. 87-2039 and referenced in 1962 U.S.C.C.A.N. 2735-36).
71. Id. at 2736.
72. Office of the Comptroller of the Currency, National Banks and the Dual Banking System 1 (September 2003), at http://www.occ.gov/static/publications/DualBanking.pdf.
73. 51 Cong. Rec. S879 (December 15, 1913) (statement of Sen. Owen).
74. Barnett Bank of Marion County, N.A. v. Nelson, 517 U.S. 25, 34 (1996).
75. Interpretive Letter No. 866, 1999 WL 983923 (October 8, 1999); Interpretive Letter No. 872, 1999 WL 1251391 (October 28, 1999).
76. Interpretive Letter No. 695, 1996 WL 187825 (December 8, 1995).
77. Id. at *1.
78. Id. at *4 (emphasis added).
79. Id. at *14 (emphasis added).
80. Id. at *12 (emphasis added).
81. Id. at *13 (citing Citizens & S. Nat’l Bank v. Bougas, 434 U.S. 35, 44 (1977); Fisher v. First Nat’l Bank of Omaha, 548 F.2d 255 (8th Cir.1977); Fisher v. First Nat’l Bank of Chicago, 538 F.2d 1284 (7th Cir. 1976), cert. denied, 429 U.S. 1062 (1977); Seattle Trust & Sav. Bank v. Bank of Cal. N.A., 492 F.2d 48 (9th Cir. 1974), cert. denied, 419 U.S. 844 (1974); Bank of N.Y. v. Bank of Am., 853 F.Supp. 736 (S.D.N.Y. 1994); Conn. Nat’l Bank v. Iacono, 785 F.Supp. 30 (D.R.I. 1992)).
82. The Supreme Court in Cuomo v. Clearing House Ass’n, 129 S.Ct. 2710 (2009), held that the Comptroller’s interpretation of another portion of the National Bank Act—12 U.S.C. § 484(a)—was unreasonable. See id.at 2719 (“The Comptroller’s regulation, therefore, does not comport with the statute. Neither does the Comptroller’s interpretation of its regulation . . . .”).12 U.S.C. § 484(a) provides that “[n]o national bank shall be subject to any visitorial powers except as authorized by Federal law, vested in the courts of justice or such as shall be, or have been exercised or directed by Congress or by either House thereof or by any committee of Congress or of either House duly authorized.”

In Cuomo, the Comptroller interpreted the statute in a way that would have prohibited the New York Attorney General from obtaining records from national banks to determine if the national banks were complying with state fair-lending laws. See Cuomo, 129 S. Ct. at 2714.

83. See supra note 75. Twenty days subsequent to the issuance of Letter No. 866, the Comptroller issued Letter No. 872. The pertinent portion of the Comptroller’s analysis in Letter No. 872 is taken verbatim from Letter No. 866, and as such, the court need not separately discuss the substance of Letter No. 872.
84. See 66 Fed. Reg. 34,792-01, 2001 WL 731641, at *34795 (July 2, 2001) (“These conclusions are consistent with the conclusions set out in IL 866 and IL 872.”).
85. See 1999 WL 983923, at Part II.B.
86. See id.
87. See id. at Part II.C.
88. John D. Hawke, Jr., Melanie L. Fein & David F. Freeman, Jr., The Authority of National Banks to Invest Trust Assets in Bank-advised Mutual Funds, 10 Ann. Rev. Banking L. 131 (1991).
89. According to the Comptroller’s website, Mr. Hawke served as the Comptroller of the Currency from 1998 to 2004, which encompasses the October 1999 publication of Letter Nos. 866 and 872, see http://www.occ.treas.gov/about/who-we-are/leadership/past-comptrollers/comptroller-john-hawk e.html (last visited Mar. 13, 2012).
90. Hawke, Fein & Freeman, supra note 88, at 140 (internal citations omitted) (emphasis added).
91. Office of the Comptroller of the Currency, National Banks and the Dual Banking System 26 (September 2003), at http://www.occ.gov/static/publications/DualBanking.pdf.
92. Nat’l Bank v. Commonwealth, 76 U.S. 353 (1869) (emphasis added).
93. Id. at 362; see also Office of the Comptroller of the Currency, National Banks and the Dual Banking System 27 (September 2003), at http://www.occ.gov/static/publications/DualBanking.pdf (quoting Bank of Am. v. City & County of San Francisco, 309 F.3d 551, 559 (9th Cir. 2002)).
94. See Nat’l Bank v. Commonwealth, 76 U.S. at 362.
95. 12 U.S.C. § 92a(b) (emphasis added).
96. 265 U.S. 17 (1924).
97. Id. at 23.
98. 15 U.S.C.A. § 6713(a) (2009) (“No national bank may engage in any activity involving the under-writing or sale of title insurance.”).

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Court sides with Nevada in BoA foreclosure case

Court sides with Nevada in BoA foreclosure case


REUTERS-

A federal appeals court on Friday granted Nevada’s request to send its lawsuit alleging mortgage modification and foreclosure abuses against Bank of America Corp back to Nevada state court.

The 9th U.S. Circuit Court of Appeals reversed a decision by a lower court, which had concluded that the lawsuit belonged in federal court.

Nevada’s complaint, filed in Clark County, Nevada, in January 2011, alleges that Bank of America misled consumers about the terms of its home mortgage modification and foreclosure processes.

Nevada also accused the bank of violating terms of a consent judgment it and several of its subsidiaries had entered into with the state in February 2009.

After Bank of America removed the lawsuit to federal court, Nevada’s request to send it back to state court was denied.

Chief Judge Robert Clive Jones of the District of Nevada ruled that the lawsuit belonged in his court because the lawsuit was a class action, which gives federal courts jurisdiction.

[REUTERS]

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JAMES v RECONTRUST | Federal court ruling against MERS foreclosure in Oregon comes (again) as Republican lawmakers try to validate it

JAMES v RECONTRUST | Federal court ruling against MERS foreclosure in Oregon comes (again) as Republican lawmakers try to validate it


Oregon Live-

A federal judge has yet again issued a ruling that effectively questions the validity of scores of foreclosures in Oregon, a crisis the Legislature could resolve in the mortgage industry’s favor this week if bank lobbyists and House Republican leaders have their way.

In an opinion issued Wednesday, U.S. District Court Judge Michael Simon rejected a magistrate judge’s finding and rulings by two of his colleagues that big banks could avoid recording notices in local land records each time a loan is sold to other lenders or investors.

Simon sided with two other federal judges in Oregon in ruling that lenders have violated state recording law. They’ve done this, they say, by logging sales within its nationwide Mortgage Electronic Registration Systems Inc. and declaring MERS a “beneficiary” of the loan.

[OREGON LIVE]

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KCSG Television – Utah Federal Judges Decisions Conflict in ReconTrust Utah Home Foreclosure Actions

KCSG Television – Utah Federal Judges Decisions Conflict in ReconTrust Utah Home Foreclosure Actions


There are some judges that get it and some that maybe still do but side the other way!

KCSG-

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, this 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 and accused of conducting an unlawful foreclosure sale because ReconTrust is not a qualified trustee under Utah Law.

[KCSG]

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CARNEY vs. BANK OF AMERICA | 9th Circuit Ct. Appeals “It is clear that MERS and ReconTrust act to usurp Appellant’s property without lawful authority”

CARNEY vs. BANK OF AMERICA | 9th Circuit Ct. Appeals “It is clear that MERS and ReconTrust act to usurp Appellant’s property without lawful authority”


MERS, something of a phantom entity and ReconTrust, subsidiary of BAC and not an independent entity, acting in BAC/BANA/Countrywide’s interests, now are trying to come in and clean up the mess made by the fraudulent DOT and Note by BondCorp in a conspiracy with Countrywide, not because they are any real beneficiary and have or will experience any real loss, but rather to gain substantial fees from the SARM 2005-19XS Trust for foreclosing on Appellant’s property.

It is truly curious as to why the proper parties in this matter are not named and Appellant posits that other, unrelated legal actions are likely a reason. That said, Appellant has shown good cause why a trustee’s sale should not proceed so that the status quo is maintained while he presses his case in the District Court.”


No. 11-56421

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

________________________________________________________
MICHAEL M. CARNEY
Plaintiff

v.

BANK OF AMERICA CORP., ET AL.
Defendants-Appellees

EXCERPT:

III. Merits Of Case Are Compelling And Clear And Likely to Be Successful.
It is clear that MERS and ReconTrust act to usurp Appellant’s property
without lawful authority. MERS Cannot be and in fact is not the beneficiary of the
DOT. There is no named beneficiary in the SOT and ANY and ALL beneficiaries
must be named in the SOT. Therefore the SOT (and consequently the NTS) is
seriously defective and void as an instrument to be implemented to supplant
Appellant from his property.

Defendants act hurriedly and without authority not because they are
uninformed or have made an excusable mistake, but rather because they wish to
elude the central facts and claims against them, hold the wrongful trustee’s sale
and gain title and possession of Appellant’s property to gain a superior position.

The facts are that BondCorp, who has yet to respond to any complaint or
motion related to this case, was in fact named as “Grantee” when it never proffered
any funds and was used by Countrywide to both gain secret, concealed fees and
allow Countrywide to further gain based on intentional concealments, lies,
misrepresentations and related actions.

As has been stated, the core of this matter is the claims against BondCorp
acting at the behest of Countrywide. If BondCorp was found to have acted
fraudulently, as asserted and supported by facts, every other claim and defense is
affected accordingly.

What this court is presented with is a defendant in BondCorp who has
chosen to remain silent in the face of substantial allegations and facts against it,
and a foreclosing entity defendant (MERS) that is acting without authority and in
clear violation of the law.

Meanwhile, Appellant has had to defend and counter all such actions and to
drag out all the facts, all while in the face of losing his family home and efforts to
understand what options would be available to him to avert such a catastrophic
result.

Up until August/September of 2010, Appellant was resigned to the fact that
his misfortune would likely lead to the loss of his family home. It wasn’t until he
received and further researched the information regarding the assignment/transfer
of his DOT and Note to US BANK (June 2010) that was entirely first time news to
him, that he began to understand and realize the fraud, malfeasance and
misfeasance enacted upon him and then which drove him to seek relief and
damages for.

The facts of the case as pertains to BondCorp are clear and undisputed.
BondCorp was not the “lender”. It only acted as such to attain secret fees.
BondCorp utilized illegal, fraudulent means to sell and convince Appellant that the
loan BondCorp wished to engage him in was in his best interests, when it was not
and that all the facts represented to him regarding the alleged loan were true, when
they were not and the real facts were concealed from him and that he was
defrauded of tens of thousands of dollars in the process.

Countrywide was an active conspirator as it allowed BondCorp to utilize its
technological assets, its underwriting resources, account numbering system and
other aids and benefits to entrap Appellant into a loan that was damaging, stated
the wrong parties and took illegal and undisclosed fees.

MERS, something of a phantom entity and ReconTrust, subsidiary of BAC
and not an independent entity, acting in BAC/BANA/Countrywide’s interests, now
are trying to come in and clean up the mess made by the fraudulent DOT and Note
by BondCorp in a conspiracy with Countrywide, not because they are any real
beneficiary and have or will experience any real loss, but rather to gain substantial
fees from the SARM 2005-19XS Trust for foreclosing on Appellant’s property.
It is truly curious as to why the proper parties in this matter are not named
and Appellant posits that other, unrelated legal actions are likely a reason. That
said, Appellant has shown good cause why a trustee’s sale should not proceed so
that the status quo is maintained while he presses his case in the District Court

[Order Granting Stay Via 9Th Cir. PDF]

 

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UT Class Action Lawsuit Alleging Fair Debt Collection Violations to Proceed Against Bank of America and Recontrust Company

UT Class Action Lawsuit Alleging Fair Debt Collection Violations to Proceed Against Bank of America and Recontrust Company


KCSG-

US District Judge Dee Benson ruled Tuesday that a class action lawsuit can proceed against ReconTrust and Bank of America (NYSE: “BAC”).

.

IN THE UNITED STATES DISTRICT COURT, DISTRICT OF UTAH,

CENTRAL DIVISION

JEREMY COLEMAN, DWAYNE WATSON, SAMUEL ADAMSON, ETHNA LYNCH,

Plaintiffs,

vs.

RECONTRUST COMPANY, N.A.,

[…]

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Bank of America-ReconTrust to Face State Court Judicial Process in Illegal Homeowner Foreclosures

Bank of America-ReconTrust to Face State Court Judicial Process in Illegal Homeowner Foreclosures


Via: KCSG

(Salt Lake City, UT) – St. George attorney John Christian Barlow, representating homeowners who have lost their home to the Bank of America’s foreclosure machine ReconTrust, may have finally achieved a measure of victory in the battle of Utah homeowners against ReconTrust fraudulent foreclosures.


IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION

BANK OF AMERICA, N.A., a foreign
corporation,
Plaintiff/Counterclaim
Defendant,

vs.

ERNIE J. FOWLKE,
Defendant/ Counter
claimant/Third Party
Claimant,

vs.

RECONTRUST COMPANY NA; BANK OF
AMERICA and BANK OF AMERICA,
Third Party and
Counterclaim
Defendants.

 

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Oregon Judge Panner issues TRO Against BONY, ReconTrust Because the Presence of MERS Demonstrates Non-Compliance w/ OTDA

Oregon Judge Panner issues TRO Against BONY, ReconTrust Because the Presence of MERS Demonstrates Non-Compliance w/ OTDA


IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

BILL R. LEEP and
JACQUELINE WATTS LEEP, Plaintiffs.

v.

THE BANK OF NEW YORK MELLON
and RECONTRUST COMPANY, N.A., Defendants.

EXCERPT:

Because of the alleged imminent foreclosure sale, and because the presence of MERS demonstrates a high probability that defendants did not comply with the recording requirements of the Oregon Trust Deed Act, I grant plaintiff’s request for a temporary restraing order (#3).

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Nevada AG puts Bank of America on notice over Foreclosure Fraud

Nevada AG puts Bank of America on notice over Foreclosure Fraud


Vegas Inc

Call it Nevada’s version of David versus Goliath.

As foreclosures continue and homeowners cry foul against lenders in their bids to stay in their homes, Nevada’s Attorney General Catherine Cortez Masto is taking on Bank of America in federal court. And the issue is going to heat up as Cortez Masto’s office investigates BofA and other parties in the foreclosure process. She says criminal charges are likely coming to the industry soon, which could provide more ammunition for her foreclosure fraud case.

[VEGAS INC]

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Paralyzed Oregon man, living on $22,000 a month and able to pay, fights foreclosure

Paralyzed Oregon man, living on $22,000 a month and able to pay, fights foreclosure


Many, Many thanks to Brent Hunsberger & Oregon Live for putting this out there. Lets not forget how many disabled and seniors are out there alone in the same situation.

Please watch the video.

Oregon Live-

Robert Galanida was a skinny teenager when a drunken driver rammed the pickup he was riding in, hurtling him to the blacktop and paralyzing him from his shoulders down.

With the help of multimillion-dollar legal and insurance settlements, he and his mother now live comfortably on annuity payments of $22,000 a month.

[OREGON LIVE]

 

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St. George, Utah Homeowner Eviction Case Moved to Federal Court

St. George, Utah Homeowner Eviction Case Moved to Federal Court


STOP: Before reading any further do yourself a favor and check this post from 8/26/2011 Fannie Mae Is At ALL TIMES The Owner And Holder of The Mortgage Note…. and you will see how the pattern is played throughout the country. Then again, if you recall this incident MERS and Fannie Mae sue Short Sale Seller and Buyer due to MERS’ Interest Recording Error!

In plain English… it’s WRONG!

KCSG-

ReconTrust Company, the foreclosure arm of Bank of America, accused of illegal foreclosures against Utah homeowners, moved a state court eviction case to federal court Friday asserting the bank’s national charter exemption from state law. (11-00801)

Utah homeowner, Alexis K. De Azevedo II, represented by St. George attorney John Christian Barlow, said in the counter claim and complaint that the Bank of America through ReconTrust Company knowingly conducted a non-judicial foreclosure sale of the property in Washington, Utah, and recorded a Trust Deed in favor of the Federal National Mortgage Association (Fannie Mae) adverse to De Azevedo. The complaint asserts that ReconTrust knew the Trustee’s Sale was fraudulent since it’s neither a member of the Utah Bar Association or a title insurance company required by Utah law.


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Memo: BofA to Sell Correspondent Mortgage Business

Memo: BofA to Sell Correspondent Mortgage Business


WSJ-

From: Home Loan News Sent: Wednesday, August 31, 2011 4:19am Subject: Important Message From Barbara DeSoer

To All IMS Associates

I wanted to provide this team with information about a strategic announcement our Home Loans business will make today that is consistent with our ongoing efforts to align the business to the bank’s customer-driven strategy.

Earlier this year, when we split out the Legacy Asset Servicing business, we did so in order for our team to focus on the future of the home loans business. We have made significant progress over the past several months and are taking steps to further position our business to serve the needs of the bank’s 58 million households and attract new mortgage customers with the potential to support growth across the franchise.

[WALL STREET JOURNAL]

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BREAKING: Bank of America to Exit Mortgage Business

BREAKING: Bank of America to Exit Mortgage Business


It’s going to tank!

WSJ-

Bank of America Corp. intends to sell its correspondent mortgage business, as the troubled lender looks to narrow its focus and bolster its financial strength, said people familiar with the situation.

Employees could be notified as soon as Wednesday that the lender has decided to exit the correspondent channel because it no longer fits with the long-term strategy for its mortgage unit. The company decided to get out roughly four to six weeks ago, following a review led by mortgage chief Barbara Desoer. The business employs more than 1,000 people.

[WALL STREET JOURNAL]

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The Countrywide settlement that NV AG Masto says BofA is flagrantly violating was also signed by… Tom Miller.

The Countrywide settlement that NV AG Masto says BofA is flagrantly violating was also signed by… Tom Miller.


H/T David Dayen

SURE DID!

.

For immediate release — Monday, October 6, 2008.
Contact Bob Brammer – 515-281-6699.

Miller: AGs Reach Agreement with Countrywide Financial that Will Help Almost 400,000 Borrowers Facing Foreclosure

The Iowa Attorney General says the settlement will offer mortgage loan modifications to more than 1,100 Iowans that will help many avoid foreclosure and loss of their homes.

Des Moines. Attorney General Tom Miller said Monday that mortgage lender Countrywide Financial Corp. has agreed to provide loan modifications to up to 397,000 borrowers nationwide under a settlement with Iowa and other states. Permanent relief to borrowers could equal about $8 billion nationwide, the company estimated.

The agreement was reached late Friday by several states with Bank of America, which acquired Countrywide Financial on July 1, 2008. Miller was a lead negotiator of the agreement.

“Over 1,100 Iowans will be offered mortgage loan modifications that will help many people avoid foreclosure and losing their homes,” Miller said. He said the potential economic relief to borrowers in Iowa from the modifications is estimated to be about $11 million. About one-fourth to one-half of all Countrywide subprime loans in Iowa are delinquent, depending on the type of loan.

“This large, systematic, streamlined modification program is a break-through,” Miller said. “We urge other servicers to adopt this approach to aiding borrowers facing foreclosure. This is the approach we need across this industry to stop the flood of foreclosures, which is at the heart of the problem of falling home prices and the liquidity crisis,” he said.

Under the agreement, eligible subprime borrowers will be able to modify the terms of their loans to make monthly payments more affordable. Modified loan terms will vary according to the circumstances of the borrower, but they may include an automatic freeze or reduction in interest rates, conversion to fixed-term loans, or reduction of principal owed.

First-year payments of principal, interest, taxes and insurance (PITI) will be targeted under the modifications to equate to 34 percent of the borrower’s income (or 25 percent of income for borrowers for whom taxes and insurance are not escrowed.)

Countrywide said the loan modification program will be ready for implementation by December 1, 2008, and that the company would engage in proactive outreach to eligible customers by then. Countrywide also noted that foreclosure sales will not be initiated or advanced for borrowers likely to qualify until Countrywide has made an affirmative decision on a borrower’s eligibility.

The toll-free number for Countrywide subprime customers who want more information is 800-669-6607. There also will be information soon at Countrywide’s web site, www.countrywide.com.

The settlement resolves allegations that Countrywide used unfair and deceptive tactics in its loan-origination and servicing activities – and that borrowers often were put in structurally unfair and unaffordable loans. Countrywide is the largest provider of subprime mortgages in the U.S.

Bank of America / Countrywide also will pay $150 million to states nationwide in a Foreclosure Relief Program for eligible Countrywide customers. The states may use up to half of those funds for programs aimed at preventing foreclosures. Bank of America / Countrywide also will pay up to $70 million nationwide in payments for relocation assistance to borrowers unable to retain their homes, and will waive up to $60-$80 million in prepayment penalties and default fees.

A report issued last week by the State Foreclosure Prevention Working Group led by Miller concluded that industry measures to keep homeowners out of foreclosure had slipped since the Working Group’s previous report in April, and that nearly eight out of ten seriously delinquent homeowners are not on track for any loss mitigation outcome. The group of state Attorneys General and banking departments concluded: “The mortgage industry’s failure to develop systematic approaches to prevent foreclosures has only spurred declines in property values and further increased expected losses on mortgage loan portfolios.” [Go to Foreclosure Prevention Working Group Report, 9-29-08.]

Miller said the Countrywide agreement’s program of loan modifications to prevent foreclosures is a win for all parties. “Foreclosure is the enemy. Most important, loan modifications can help homeowners avoid foreclosures and keep their homes. Avoiding foreclosures also helps the companies, helps communities and neighborhoods, and helps our overall economy by stabilizing the housing market,” he said.

“This is what we have been looking for. This agreement provides for the kind of systematic and streamlined loan modification program that is critical right now,” Miller said. “I strongly urge other servicers to undertake similar aggressive programs to prevent foreclosures.”

– 30 –

More details and background:

Miller urged Countrywide customers in Iowa to call the Countrywide toll-free number, 800-669-6607, for more information, including what records they will need to assemble to determine if they qualify for the loan modification program. Miller also urged any OTHER Iowans facing difficulty making their mortgage payments to call the Iowa Mortgage Help Hotline at 877-622-4866.

Countrywide said the loan modification program was designed to achieve affordable and sustainable mortgage payments for borrowers who financed their homes with subprime loans or pay option adjustable rate mortgages serviced by Countrywide that were originated prior to Dec. 31, 2007, and who are seriously delinquent or are likely to become seriously delinquent as a result of loan features, such as interest rate resets or payment recasts.

Under the settlement, which does not constitute an admission of wrongdoing, Bank of America / Countrywide also agreed to: stop offering pay option ARMs and significantly curtail offering “low-documentation” and “no-documentation” loans; initiate an early identification and contact program for people who have trouble making their payments; and continue working with non-profits, federal agencies, and state Attorneys General on ways to use REO (real estate owned) and other properties for community development.

The Bank of America / Countrywide settlement resolved investigations into Countrywide’s lending practices by Arizona, Iowa, Ohio, Texas and Washington. The settlement also resolved lawsuits against Countrywide initiated by Illinois, California and Florida. Other states also are participating in the settlement.

Miller said he and his colleagues from Arizona, Ohio, Texas and Washington were especially insistent and focused on the loan modification program during extensive negotiations with Bank of America, and making the modification programs available quickly and nationwide.

– END –

NEVADA vs. BANK OF AMERICA CORP. | Second Amended Complaint “The Breach, Trusts Never Became Holders of These Mortgages””

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Bank of America Accused of Breaching Accord – Gretchen Morgenson

Bank of America Accused of Breaching Accord – Gretchen Morgenson


NEVADA vs. BANK OF AMERICA CORP. | Second Amended Complaint “The Breach, Trusts Never Became Holders of These Mortgages””

NY TIMES-

The attorney general of Nevada is accusing Bank of America of repeatedly violating a broad loan modification agreement it struck with state officials in October 2008 and is seeking to rip up the deal so that the state can sue the bank over allegations of deceptive lending, marketing and loan servicing practices.

In a complaint filed Tuesday in United States District Court in Reno, Catherine Cortez Masto, the Nevada attorney general, asked a judge for permission to end Nevada’s participation in the settlement agreement. This would allow her to sue the bank over what the complaint says were dubious practices uncovered by her office in an investigation that began in 2009.

[NEW YORK TIMES]

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NEVADA vs. BANK OF AMERICA CORP. | Second Amended Complaint “The Breach, Trusts Never Became Holders of These Mortgages””

NEVADA vs. BANK OF AMERICA CORP. | Second Amended Complaint “The Breach, Trusts Never Became Holders of These Mortgages””


UNITED STATED DISTRICT COURT
DISTRICT OF NEVADA

STATE OF NEVADA ,

vs.

BANK OF AMERICA CORPORATION,
BANK OF AMERICA, N.A.,
BAC HOME LOANS SERVICING, LP,
RECONTRUST COMPANY, N.A.,
COUNTRYWIDE FINANCIAL CORPORATION,
COUNTRYWIDE HOMELOANS, INC., AND
FULL SPECTRUM LENDING, INC.

Excerpt:

6. In addition, Bank of America misrepresented, both in communication with Nevada consumers and in documents they recorded and filed, that they had authority to foreclose upon consumers’ homes as servicer for the trusts that held these mortgages. Defendants knew (and were on notice) that they had never properly transferred [OMITTED] these mortgages to those trusts, failing to deliver properly endorsed or assigned mortgage notes as required by the relevant legal contracts and state law.

Because the trusts never became holders of these mortgages, Defendants lacked authority to collect or foreclose on their behalf and never should have represented they could.

[ipaper docId=63614235 access_key=key-1w4o8733ipo19ki3pfxf height=600 width=600 /]

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BofA has stopped filing mortgage default notices in Salt Lake County

BofA has stopped filing mortgage default notices in Salt Lake County


Christian Barlow of St. George, asked why ReconTrust had halted filing foreclosures under its name if it believes the practice is legal. “If ReconTrust can foreclose, why did they stop?” he asked.

Salt Lake Times-

Bank of America stopped filing foreclosure default notices in Salt Lake County earlier this month, but its attorney argued in court Thursday that it still has the legal right to do so.

The seeming contradiction wasn’t explained by the bank, though the halt in filing of notices of default in county property records apparently comes ahead of a pending agreement with the Utah Attorney General’s Office to end the practice state attorneys consider illegal.

[THE SALT LAKE TIMES]

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Accord near to halt BofA foreclosures in Utah

Accord near to halt BofA foreclosures in Utah


“All real estate foreclosures conducted by ReconTrust in the state of Utah are not in compliance with Utah’s statutes, and are hence illegal” –

READ | Letter from Utah Attorney General Mark Shurtleff to Bank of America President Brian T. Moynihan re: ReconTrust “ILLEGAL”

Salt Lake Tribune-

The Utah Attorney General’s Office is close to an agreement to halt what it considers illegal foreclosures by Bank of America, which has conducted a majority of foreclosures against homeowners since the subprime-fueled collapse of the housing bubble.

The attorney general’s office had intervened in a homeowner lawsuit to argue that BofA was illegally foreclosing on properties in Utah. But recently it has been negotiating a settlement over foreclosures conducted by ReconTrust, a unit of the giant banking corporation.

A.G. spokesman Paul Murphy said Wednesday an accord is near. Although he declined to provide details, Murphy said in an email that “any settlement would require that all illegal activity [by ReconTrust] stop.”

[SALT LAKE TRIBUNE]

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FISHER v. MERS, ReconTrust | OR Dist. Ct Grants TRO “Presence of MERS demonstrates a high probability didn’t comply w/recording requirements of the Oregon Trust Deed Act”

FISHER v. MERS, ReconTrust | OR Dist. Ct Grants TRO “Presence of MERS demonstrates a high probability didn’t comply w/recording requirements of the Oregon Trust Deed Act”


IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

REBECCA FISHER and TRAVIS FISHER,
Plaintiffs

v.

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., (“MERS”) a Delaware Corporation;
RECONTRUST COMPANY N.A., (“ReconTrust”) a wholly owned subsidiary of Bank of America Corporation
(“BAC”) a Delaware Corporation’
Defendants

EXCERPT:

Plaintiffs allege defendants have not complied with the legal requirements a valid non-judicial foreclosure. Among other allegations, plaintiffs allege defendants failed to record all assignments of the trust deed in the county land records prior to initiating the foreclosure proceedings. (Compl. ~ 22.) In Oregon, a party initiating nonjudicial foreclosure proceedings must record all assignments of the trust deed. ORS 86.735(1); Hooker v. Northwest Trustee 2011 WL 2119103, *3 (D. Or. May 25) (citing Burgett v. MERS, 2010 WL 4282105, at *2 (D. Or. Oct. 20) and re McCoy, 2011 WL 477820, at *3-4 (Bankr. D. Or. Feb. 7)). Plaintiffs allege MERS is listed as the beneficiary on the deed of trust at issue. (Compl. ~ 4.)

Because of the alleged imminent foreclosure sale, and because the presence of MERS demonstrates a high probability that defendants did not comply with t recording requirements of the Oregon Trust Deed Act, I grant plaintiff’ request for a temporary restraining order.

[ipaper docId=62620238 access_key=key-1lsn3x5ngak49wqgdpcz height=600 width=600 /]

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MARTINEZ v. AMERICA’S WHOLESALE LENDER | 9th Cir. Court of Appeals Reverses Part/Remands “Declarations Fail, QUIET TITLE, ReconTrust”

MARTINEZ v. AMERICA’S WHOLESALE LENDER | 9th Cir. Court of Appeals Reverses Part/Remands “Declarations Fail, QUIET TITLE, ReconTrust”


NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

PETRA MARTINEZ,
Plaintiff – Appellant,

v.

AMERICA’S WHOLESALE LENDER;
COUNTRYWIDE HOME LOANS
SERVICING LP; BANK OF AMERICA,
RECONTRUST COMPANY N.A.; and
BANK OF NEW YORK MELLON,
Defendants – Appellees.

Appeal from the United States District Court
for the Northern District of California
William H. Alsup, District Judge, Presiding

Argued and Submitted May 12, 2011
San Francisco, California

Before: GOULD and M. SMITH, Circuit Judges, and ST. EVE, District Judge.**

In this appeal, Petra Martinez contends that the district court erroneously
granted summary judgment in favor of Defendants. As the facts and procedural
history are familiar to the parties, we do not recite them here except as necessary to
explain our disposition. For the reasons explained below, we affirm the district
court’s grant of summary judgment in part and reverse it in part.

We review a district court’s grant of summary judgment de novo. See
Florer v. Congregation Pidyon Shevuyim, N.A., 639 F.3d 916, 921 (9th Cir. 2011).
In doing so, we view the evidence in the light most favorable to the nonmoving
party, and determine both whether any genuine dispute as to any material fact
exists and whether the district court correctly applied the substantive law. See id.

In her Complaint, Martinez brought a number of causes of action against
Defendants based on their alleged role in foreclosing on a property over which she
held a mortgage interest. The relevant causes of action were to quiet title, for an
accounting, for tortious violation of statute (the Real Estate Settlement Procedures
Act), for unfair competition, for unfair debt-collection practices, for declaratory
relief, for slander of title, for intentional infliction of emotional distress, and for
negligent infliction of emotional distress.

Although the district court separately analyzed each of these causes of
action, as well as two implicit “overarching claims” of a “right to initiate
foreclosure proceeding[s]” and “deficient notice,” Martinez abandons all but two

of them on appeal. Specifically, in her opening brief, Martinez only addresses her
claim under California Civil Code Section 2923.5 (though her Complaint does not
identify it as a discrete cause of action) and her action to quiet title on the basis that
Defendants lacked authorization to carry out the foreclosure. She either ignores or
gives mere passing reference to her other causes of action, and so she has waived
them. See United States v. Graf, 610 F.3d 1148, 1166 (9th Cir. 2010) (citing
United States v. Williamson, 439 F.3d 1125, 1138 (9th Cir. 2006)); Rattlesnake
Coal. v. U.S. Envtl. Prot. Agency, 509 F.3d 1095, 1100 (9th Cir. 2007).

We affirm the district court’s grant of summary judgment in favor of
Defendants on Martinez’s Section 2923.5 claim. Although a private right of action
exists under this section, the remedy “is a simple postponement of the foreclosure
sale, nothing more.” Mabry v. Superior Court, 110 Cal. Rptr. 3d 201, 204 (Cal. Ct.
App. 2010). It follows that a claim under Section 2923.5 necessarily fails if a
foreclosure sale has occurred. See Hamilton v. Greenwich Investors XXVI, LLC,
126 Cal. Rptr. 3d 174, 185-86 (Cal. Ct. App. 2011). Defendants observe that the
relevant property was sold in foreclosure on April 28, 2010, and Martinez concedes
this fact in her reply. Martinez’s Section 2923.5 claim therefore fails.

The final issue concerns Martinez’s quiet-title claim. The district court
granted summary judgment to Defendants on this claim because “[u]ndisputed
facts show that plaintiff has an outstanding loan on the property, and that
defendant BNYM [Bank of New York Mellon] holds the promissory note. Plaintiff cannot
quiet the title until she repays the mortgage.” It is generally true that, in California,
“‘an action to set aside a trustee’s sale for irregularities in sale notice or procedure
should be accompanied by an offer to pay the full amount of the debt for which the
property was security.’” Ferguson v. Avelo Mortg., L.L.C., 126 Cal. Rptr. 3d 586,
591 (Cal. Ct. App. 2011) (quoting Arnolds Mgmt. Corp. v. Eischen, 205 Cal. Rptr.
15, 17 (Cal. Ct. App. 1984)). In the present case, however, Martinez has alleged
that the purported trustee, ReconTrust Company, N.A. (“ReconTrust”), had no
interest in the subject property and thus lacked authorization to attempt, or effect, a
nonjudicial foreclosure. If Martinez were to prove this allegation, the foreclosure
sale would be void under California law. See Dimock v. Emerald Props., L.L.C.,
97 Cal. Rptr. 2d 255, 261-63 (Cal. Ct. App. 2000). The tender rule does not apply
to a void, as opposed to a voidable, foreclosure sale. See Ferguson, 126 Cal. Rptr.
3d at 592; Dimock, 97 Cal. Rptr. 2d at 262-63; 4 Miller & Starr, Cal. Real Estate §
10:212 (3d ed.).

There would have been no error if Defendants had introduced admissible
evidence establishing that there is no genuine dispute that ReconTrust was
authorized to carry out the foreclosure sale, such that the sale was not void. Cf.,e.g.,
Ferguson, 126 Cal. Rptr. 3d at 595 (distinguishing Dimock and holding that
trustee’s sale conducted by authorized party is “merely voidable,” not void). In
moving for summary judgment, however, Defendants relied on documents attached
to declarations including those of Kalama M. Lui-Kwan, George Merziotis, and
Eva Tapia. Martinez, in opposing Defendants’ motion for summary judgment,
filed evidentiary objections to these declarations, which the district court overruled
without explanation. We conclude that the district court abused its discretion in
doing so.

A declarant must lay a proper foundation for evidence considered on
summary judgment. Bias v. Moynihan, 508 F.3d 1212, 1224 (9th Cir. 2007). For
documentary evidence submitted on summary judgment, however, “a proper
foundation need not be established through personal knowledge but can rest on any
manner permitted by Federal Rule of Evidence 901(b) or 902.” Secs. & Exch.
Comm’n v. Phan, 500 F.3d 895, 913 (9th Cir. 2007) (quoting Orr v. Bk. of Am., NT
& SA, 285 F.3d 764, 774 (9th Cir. 2002)). Put differently, “[t]he documents must
be authenticated and attached to a declaration wherein the declarant is the ‘person
through whom the exhibits could be admitted into evidence.’” Bias, 508 F.3d at
1224 (quoting Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542,
1551 (9th Cir. 1990)).

Lui-Kwan sought to introduce title documents, a variety of deeds, notices,
and other evidence relevant to the present case. His declaration presents numerous
authentication problems. First, he declared that he had reviewed title documents
that “appear” to have been recorded with the Monterey County Recorder’s office.
Second, he obtained copies of the relevant documents from private websites, which
are not self-authenticating. Cf. United States v. Salcido, 506 F.3d 729, 733 (9th
Cir. 2007) (per curiam); United States v. Tank, 200 F.3d 627, 630 (9th Cir. 2000).

Defendants nevertheless argue that “[a] majority of the exhibits are
documents recorded with the Monterey County Recorder bearing an official stamp
for the date and time of the recording as well as a document number . . . and, as
such, are self-authenticating[.]” The attached documents, however, are not
originals, but are copies, and therefore are not self-authenticating. Compare
United States v. Weiland, 420 F.3d 1062, 1074 (9th Cir. 2005) with United States
v. Hampton, 464 F.3d 687, 689 (7th Cir. 2006). Federal Rule of Evidence 902(4),
which governs “certified copies of public records,” requires the custodian or other
authorized person to certify that the copies are correct. Fed. R. Evid. 902(4).
Defendants failed to satisfy this requirement.

Defendants similarly failed to authenticate the documents attached to
Tapia’s declaration, which claim to be true and correct copies of documents
concerning Martinez’s loan and the Defendants’ corporate relationships. Tapia
asserted her “understanding” and “familiar[ity]” with the stated facts in a
conclusory manner that fails to establish her personal knowledge about the relevant
events and documents. Shakur v. Schriro, 514 F.3d 878, 890 (9th Cir. 2008); Bank
Melli Iran v. Pahlavi, 58 F.3d 1406, 1412 (9th Cir. 1995). Moreover, the
documents attached to her declaration are not admissible as “[c]ertified domestic
records of regularly conducted activity,” Fed. R. Evid. 902(11), because the
declaration contains no certification that ReconTrust made the records at or near
the time of the occurrence of the relevant matters, that it kept the records in the
course of a regularly conducted activity, or that it made the records by the regularly
conducted activity as a regular practice. Because Tapia failed to lay a foundation
for her personal knowledge about the documents, her testimony is not adequate
extrinsic evidence from “a witness who wrote it, signed it, used it, or saw others do
so” to establish admissibility under Federal Rule of Evidence 901(b)(1). Orr, 285
F.3d at 774 n.8 (internal quotation marks omitted). Defendants therefore failed to
authenticate the documents attached to Tapia’s declaration, and Tapia’s nondocumentary
factual assertions fail to meet the personal knowledge requirement of
Federal Rule of Civil Procedure 56(e)(1) (2009).

For the same reasons, we find that the documentary exhibits and factual assertions of
George Merziotis—to the extent that they are even relevant to the remaining
cause of action—fail to satisfy Federal Rule of Civil Procedure 56(e)
and the associated rules of evidence.

In light of these evidentiary problems, Defendants failed to introduce
sufficient admissible evidence to establish that the foreclosure sale was valid. We
therefore reverse as to Martinez’s quiet-title claim and remand to the district court
for further proceedings consistent with this disposition. Because the sole
remaining claim is founded on state law, we invite the district court to consider
whether it has subject-matter jurisdiction over the case.

Each party shall bear its own costs.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

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GARY DUBIN LAW OFFICES FORECLOSURE DEFENSE HAWAII and CALIFORNIA
Kenneth Eric Trent, www.ForeclosureDestroyer.com

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