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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]

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Posted in STOP FORECLOSURE FRAUDComments (1)

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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Mandi Shaw, Utah Woman With Multiple Disabilities, Asks YouTube To Help Save Her Home (VIDEO)

Mandi Shaw, Utah Woman With Multiple Disabilities, Asks YouTube To Help Save Her Home (VIDEO)


HuffPO-

Mandi Shaw was dealt a seemingly insurmountable hand.

The 47-year-old Utah woman’s heart is at only 20 percent of normal capacity, and the results of her birth defects include clubbed feet, no fingers on her right hand and teeth so soft they fell out, according to Deseret News.

Her disabilities are making it impossible for her to work and nearly impossible to pay her mortgage, according to the news site. Now, Shaw is turning to YouTube for help in keeping their home.

To anyone willing to help, Shaw says in the video: “I would be forever grateful and indebted.”

[HUFFINGTONPOST]

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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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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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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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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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Utah Class Action Lawsuit alleges “THOUSANDS OF ILLEGAL UTAH FORECLOSURES”, Lawyers for Bank of America and ReconTrust sued

Utah Class Action Lawsuit alleges “THOUSANDS OF ILLEGAL UTAH FORECLOSURES”, Lawyers for Bank of America and ReconTrust sued


Salt Lake City, UT (UTAH NEWS) July 5, 2011

The Salt Lake City-based law firm Mumford West & Snow, LLC , today announced the filing of a class action lawsuit against the lawyers for Bank of America and its wholly own subsidiary ReconTrust, N.A. for conducting thousands of unauthorized foreclosures in the state. The lawsuit, filed in Utah’s Third Judicial District, is the latest development in an intense, ongoing legal battle in a state where the Utah legislature has recently enacted new civil penalties to assist aggrieved homeowners fighting illegal foreclosures and Utah’s Attorney General, Mark Shurtleff, publicly announced that ReconTrust was not in compliance with Utah law.

Lead counsel Marcus R. Mumford explained, “These parties have demonstrated a long standing pattern of illegal activity in taking thousands of homes from Utah homeowners in unauthorized foreclosures. They continue to kick people out of their homes claiming that they are not required to follow Utah law. We intend to put a stop to that.”

The lawsuit, now before Utah Third District Judge Andrew H. Stone, is the first class action suit filed after the recently enacted changes to Utah law. Attorney Tyson B. Snow explains, “We recently met with the Utah Attorney General’s office on this issue and it is our understanding that one of the purposes of the new law is to encourage this very type of lawsuit.” Mumford West & Snow attorneys also intend to seek a statewide restraining order and a preliminary injunction prohibiting the named defendants from conducting any additional foreclosure sales within the state.

Utah’s new law awards $2,000 or actual damages, whichever is greater, and attorney’s fees to homeowners who have been subject to an unauthorized foreclosure conducted by “unauthorized persons.” In the past month, ReconTrust has foreclosed on approximately 200 properties and currently has more than 800 foreclosure sales scheduled in the coming months. The newly filed lawsuit alleges that lawyers for Bank of America and ReconTrust violate Utah law each time they conduct these foreclosure sales. Utah homeowners who have been foreclosed on by ReconTrust or who may currently be facing a wrongful foreclosure can contact Mumford West & Snow through the firms website at http://www.mumfordwest.com

_______________________________

Mumford West & Snow (www.mumfordwest.com) is a Salt Lake City based firm that specializes in representing entrepreneurs, businessmen, executives and individual clients, in Utah and around the country, in complex civil and criminal litigation. The firm handles both defense work and plaintiff’s litigation for clients ranging from individuals and small enterprises to major corporations.

Mumford West & Snow has been called “one of Salt Lake City’s leading new firms in high-profile litigation.”


###


If you’d like more information about this release, or to schedule an interview with an attorney at Mumford West & Snow, please call 801-599-0020 or email contact@mumfordwest.com.

source: www.mumfordwest.com

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

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


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

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Judge sides with homeowners in foreclosure suit due to foreclosing entities not sure who owns note

Judge sides with homeowners in foreclosure suit due to foreclosing entities not sure who owns note


Salt Lake Tribune-

U.S. District Judge Dee Benson left open a legal window Wednesday for two South Jordan residents facing the loss of their house, one of the first cracks in federal court for Utahns trying to save homes from the wave of foreclosures swamping the state.

Benson declined to grant a motion to dismiss the lawsuit brought by Michael and Dana Geddes to halt the foreclosure on their home while they try to negotiate a loan modification. That means the couple and their attorney can proceed with gathering testimony and documents to try to prove their contention that the foreclosure process to which they’re being subjected does not comply with Utah and federal laws.

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BofA to keep foreclosures despite new Utah law

BofA to keep foreclosures despite new Utah law


Bank of America continued to file foreclosure-related actions in its own name Wednesday, the day after a state law directly aimed at that practice by the mortgage-servicing giant took effect.

The new law allows homeowners who were illegally foreclosed on to go to court to seek payment of damages, penalties of up to $2,000 and legal fees. The Utah Attorney General’s Office asserts that ReconTrust, the foreclosure arm of Bank of America, fails to comply with state law when it institutes foreclosure proceedings under its own name.

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Deposition Transcript of SELECT PORTFOLIO SERVICING (SPS) MINDY LEETHAM

Deposition Transcript of SELECT PORTFOLIO SERVICING (SPS) MINDY LEETHAM


EXCERPTS:

Q Have you reviewed the Pooling and
Servicing Agreement in this case?
A No, I haven’t.
Q It’s my understanding I believe it was
objected to being produced. So up till today, have
you reviewed any document that allows you to speak
on behalf of Bank of New York?
A I haven’t.
Q Have you spoken to anyone at Bank of New
York to confirm that you are allowed to speak on
behalf of a separate corporate entity here today?
A No.

Q So as you sit here, do you know whether
you have the authority from the Bank of New York to
testify to these matters and to bind the Bank of New
York as a corporation?
A No.

Q Okay. And let me go back before I get
into the question one. You are not an officer of
the Bank of New York, correct?
A That’s correct.
Q You’re not a director of the Bank of New
York?
A Correct.
Q You’re not a managing agent of the Bank of
New York?
A Correct.

<SNIP>

Q What I’m getting at is the ownership of
the actual note and mortgage, not the servicing, but
the ownership. Do you have any other document that
would either confirm or contest whether

NationsCredit Mortgage Corporation of Florida owned
this note and mortgage in order to assign it as set
forth in Exhibit 2?
A Not that I know of

<SNIP>

Q So again, do you have anything at all that
suggests that NationsCredit Home Equity Services
Corporation ever owned this note?
A I don’t.

<SNIP>

Q Do you agree that the Bank of New York
lacked standing to file the 2004 case?
A Can you be more specific on your question?
Q Do you agree that the Bank of New York did
not own the note and mortgage at the time it filed
the 2004 case?
A Well, I can say that there’s no recorded
document showing that date.

<SNIP>


Q Do you agree that the lack of standing was clear?
A No.
Q Why not?
A Because of the overlapping of dates and
the obvious issues with the assignment chain, it’s not clear that it was straightforward.

Continue below…
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Panel: No help for Utah homeowners in foreclosure

Panel: No help for Utah homeowners in foreclosure


A Utah House committee Tuesday voted down a bill that would have given homeowners the name of someone with whom they could try to renegotiate a loan during the foreclosure process.

The Business and Labor Committee voted 6-5 to recommend against HB326 despite sponsor Rep. LaVar Christensen’s assurance it was tilted in favor of banks, mortgage lenders and note holders.

At the time a default notice is filed, the bill would have required the holder of the mortgage note to register the name and contact information of a “special servicer” who had authority to renegotiate the terms of a loan before a property could be sold. It also would have required the servicer to give “reasonable consideration” to a home-owner’s request for relief.

The bill pushed by the Draper Republican was created in response to thousands of foreclosures and threatened foreclosures in Utah, the result of the bursting of the real estate bubble in 2007. Home-owners say lenders have failed to negotiate loan modifications with them and, in some cases, they cannot even find anyone to speak to about their loans.

Continue reading … The Salt Lake Tribune

H.B. 326 Substitute
Trust Deed Foreclosure Changes — Christensen, L.

Drafting Attorney: Robert H. Rees

Bill List | Bills by Representative, Senator, or Subject
Similar Bills: Mortgage Business Real Estate


This bill has been substituted. The substitute is H.B. 326 Second Substitute

This bill is a substitute bill. The bill that was substituted is H.B. 326

Bill Status/Votes
Last Action: 01 March 2011, Bill Substituted by Standing Committee
Last Location: House Business and Labor Committee
Bill Status/Votes Last Updated: 1 March 2011, 11:23 AM

Audio Recordings of Debates (Software to listen to audio recordings can be found at real.com.  Questions about audio/video streaming.)
House Business and Labor Committee 3/1

Bill Text (If you are having trouble viewing PDF files, Install Latest Adobe Reader)
Introduced HTML | PDF | WP Zipped 71K  Last Updated: 24 February 2011, 8:13 AM
Compare H.B. 326 Substitute to H.B. 326

Fiscal Note
Fiscal Note HTML | PDF Last Updated: 24 February 2011, 7:59 AM

Printed copies of bills may be obtained from Legislative Printing.

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BLOOMBERG | BofA Unit’s Utah Foreclosures Violate Law, State Says

BLOOMBERG | BofA Unit’s Utah Foreclosures Violate Law, State Says


A Bank of America Corp. unit is breaking the law by foreclosing on homeowners in Utah because it doesn’t meet state requirements, the state attorney general’s office said in a federal appeals court case.

ReconTrust Co., a subsidiary of Bank of America, the biggest U.S. lender by assets, isn’t a member of the state bar or a title insurance company and is unqualified to carry out trustee foreclosures, Utah Attorney General Mark Shurtleff wrote in court papers filed yesterday with the U.S. Court of Appeals in Denver.

“ReconTrust Co. N.A. is a non-depository national bank initiating approximately 4,000 home foreclosures in Utah each year in violation of Utah law,” the attorney general’s office said.

The court filing was made in a homeowner’s lawsuit against ReconTrust and Bank of America.

“National banks must abide by state law,” said John Christian Barlow, an attorney for the homeowner, Peni Cox. “ReconTrust just wants to foreclose, period,” he said.

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Utah’s “Quiet Title Law” Bypasses MERS, Awards Homes Free and Clear; One Homeowner Had $417,000 Debt Erased

Utah’s “Quiet Title Law” Bypasses MERS, Awards Homes Free and Clear; One Homeowner Had $417,000 Debt Erased


Mike “Mish” Shedlock

Monday, January 17, 2011 1:33 AM

The Salt Lake Tribune has an interesting article on Utah’s “Quiet Title Laws”, MERS, clouded titles, and record keeping. Several people won titles free and clear to their houses or condos when debts as great as $417,000 were dismissed in court. Here are a few snips.

A Utah court case in which the owner of a Draper townhouse got clear title to the property, even though he still owed $132,000 on it, raises new legal and financial questions about a property-records database created by mortgage bankers.

The award of a title free of liens means that whoever owns the promissory note on the Draper property — likely a group of faraway investors — no longer has the right to foreclose to collect on a delinquent loan. Indeed, the townhouse owner has sold the property and kept the money. Those who own the promissory note probably don’t even know what occurred.

Last year, the owner of the Draper property contacted attorney Walter T. Keane to help him deal with lenders, though Keane won’t say what the problem was and the owner declined an interview request.

The lawsuit over the title to the townhouse named Garbett Mortgage and Citibank FSB as the holders of promissory notes as recorded on trust deeds filed with the recorder’s office. Integrated Title Services was listed as trustee of the Garbett Mortgage trust deed, while First American Title was the trustee of the CitiBank trust deed.

But there also was another entity listed on the trust deeds called the Mortgage Electronic Registration Systems (MERS). The Mortgage Bankers Association, the Washington, D.C.-based trade group that represents major mortgage lenders, created MERS in the mid-1990s.

Under the state’s quiet title laws, Keane said he did not have to name MERS or serve it legal papers in the lawsuit because it was not the legal owner of title to the property. Those were title companies. In addition, attorneys contend, MERS cannot be the “beneficiary” or holder of the promissory note because it readily has admitted it has no financial interest in any notes or mortgages.

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UTAH: Two Judges Recuse Themselves From The Class Action Against ReconTrust, MERS, BofA et al

UTAH: Two Judges Recuse Themselves From The Class Action Against ReconTrust, MERS, BofA et al


Class Action ReconTrust/Bank of America Case Lands in Federal Judge Dale Kimball’s Court

by Morgan Skinner, KCSG News

(Salt Lake City, UT) – US District Chief Judge Tena Campbell recused [Recusal order] herself in the class action lawsuit against ReconTrust and Bank of America (NYSE: “BAC”), Mortgage Electronic Registration Systems (“MERS”), Countrywide Home Loans, HSBC Bank (NYSE: “HSBC”), Wells Fargo Bank (NYSE: “WFC”), U.S. Bank (NYSE: “USB”), Bank of New York/Mellon (NYSE: “BK”), KeyBank (NYSE: “KEY”) filed in Utah federal court Friday, November 5, 2010, alleging violations of the, Fair Debt Collections Practices Act, Utah Pattern of Unlawful Activity Act (FDCPA), Unlawful Foreclosures, and Intentional Infliction of Emotional Distress.

Upon Judge Campbell recusal from the case [Class Action Complaint] it was sent to Judge Clark Waddoups who has the Peni Cox case pending in his court against ReconTrust and Bank of America. The case is also on appeal to the 10th Circuit Court in Denver, Colorado.

KCSG News has learned from court records filed Thursday that Judge Waddoups has recused himself. [Recusal order] Why did Judge Waddoups recuse himself in the class action matter? He didn’t recuse himself in the Peni Cox case pending in his court on the same issues against the same defendants, ReconTrust and Bank of America.

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UTAH CLASS ACTION: COLEMAN v. BofA, ReconTrust, MERS, Wells Fargo, HSBC, US Bank, Keybank, BNY Mellon

UTAH CLASS ACTION: COLEMAN v. BofA, ReconTrust, MERS, Wells Fargo, HSBC, US Bank, Keybank, BNY Mellon


E. Craig Smay #2985
174 E. South Temple
Salt Lake City, Utah 84111
ecslawyer@aol.com, cari@smaylaw.com
Telephone Number (801) 539-8515
Fax Number (801) 539-8544

John Christian Barlow
40 N 300 E #101
St. George UT 84771
jcb@JohnChristianBarlow.com
435-634-1200
Attorneys for Plaintiffs


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., MORTGAGE
ELECTRONIC REGISTRATION
SYSTEMS, INC., BANK OF AMERICA,
N.A. AS SUCCESSOR TO COUNTRYWIDE
HOME LOANS, INC., BAC HOME
LOAN SERVICING LP, HSBC BANK
USA, N.A., WELLS FARGO BANK, N.A.,
U.S. BANK N.A., BANK OF NEW YORK
MELLON, KEYBANK, N.A. and Does 1-
10, Defendants.

CLASS ACTION
COMPLAINT FOR VIOLATION OF
FAIR DEBT COLLECTION
PRACTICES ACT, UTAH
PATTERN OF UNLAWFUL
AUTHORITY ACT
JURY DEMANDED

Case No. 2:10-cv-02099-TC

Judge Tena Campbell

Plaintiffs Jeremy Coleman, Dwayne Watson, Samuel Adamson, and Ethna Lynch, individually and on behalf of others Similarly Situated (“Plaintiffs”) bring this action under the Fair Debt Collection Practices Act (“FDCPA”), 15 USC §§ 1692-1692p, and Utah state law, including, without limitation, §§ 76-10-1602, 76-10-1603, and 76-10-1605(1), (2), UCA (1953), and allege as follows:

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Conflict of Interest? Federal Judges’ ties to Bank of America…Remember the UTAH CASE???

Conflict of Interest? Federal Judges’ ties to Bank of America…Remember the UTAH CASE???


If youl recall my post Notice of Appeal Filed – Stay of Court Order to Vacate Injunction Stopping Bank of America Foreclosures in Utah Requested

I stated There is something not right here and I think the outcome might surprise us!

WELL HERE IT IS.

Reported by: Kelli O’Hara
Last Update: 1:29 am

SALT LAKE CITY, Utah (ABC 4 News) – “They’re foreclosing illegally here in Utah,” those were the words of St. George Attorney John Christian Barlow spoken in early June. Barlow at the time had appeared before a Federal Judge arguing that the Banking Giant, Bank of America, was foreclosing illegally in the State of Utah. The Southern Utah Attorney believed that because B.O.A was not a registered business or corporation in the state, they lacked authority to do business here.

Barlow had succeeded in getting a 5th Circuit Court Judge to agree with him; as a result the judge imposed an injunction on all Bank of America foreclosures. Weeks later, the case went before a Federal Judge where B.O.A. argued that they were regulated by Federal Laws not State. Federal Judge Clark Waddoups heard case, and threw out the injunction therefore Bank of America’s foreclosure company: ReConTrust was allowed to foreclose once again.

After the decision, ABC4 got a tip about the case and started digging. Our tipster said that the Judge may have a conflict of interest in hearing the B.O.A. cases. Why? Because the Judge Waddoups old law firm represents Bank of America.

We checked into Waddoups background and the Federal Judge did work for Parr,Brown, Gee & Loveless for nearly 30 years. And Waddoups, as of 2008, drew a pension from the law firm. We placed a call to the firm, but they wouldn’t comment if the former firm Partner had ever handled B.O.A cases.

Continue reading …ABC4

RELATED ARTICLE BELOW:

_____________________________________

What does DJSP, Enterprises Newly Appointed Counsel have in common with PBC Judge Meenu Sasser?

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Posted in bac home loans, bank of america, concealment, conflict of interest, conspiracy, CONTROL FRAUD, corruption, djsp enterprises, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, investigation, Law Offices Of David J. Stern P.A., MERS, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Recontrust, stopforeclosurefraud.comComments (2)

Could New Filing Persuade Judge Waddoups to Set Aside Restraining Order on Bank of America Utah Foreclosures and Remand Case to State Court?

Could New Filing Persuade Judge Waddoups to Set Aside Restraining Order on Bank of America Utah Foreclosures and Remand Case to State Court?


My friends with the latest articles I posted…take note momentum is starting to build!



(Salt Lake City, UT) – The Bank of America’s motion for dismissal filed July 2, 2010 in US District Court of Utah may have opened the way for Judge Clark Waddoups to set aside his order halting foreclosures in Utah by ReconTrust Company and remand the case to state court. Attorneys John Christian Barlow and E. Craig Smay, in their plaintiff’s response filed Friday, July 8, 2010 say “the defendant’s motion to dismiss re-opens the issue of preemption of State law which previously arose in the analysis of the courts jurisdiction. There, the court analyzed and relied upon the wrong statute, producing an erroneous conclusion of preemption. That conclusion should now be corrected,” the attorneys said.

“The defendant’s motion to dismiss is based upon claims the plaintiff lacked a cause of action under Utah Code §16-10a-1501 and 57-1-21 addresses an issue not in dispute,” Barlow said. “ReconTrust Company is permitted to serve as trustee in Utah, but the company is still required to register and have offices in the state along with its competitor state banks, and may not foreclose non-judicially,” according to Barlow and Smay. “Bank of America’s motion to dismiss serves to more clearly show the federal court lacks jurisdiction to set aside the restraining order previously issued by the state court,” Barlow said. The Plaintiff filing cites the federal court’s own decision denying federal jurisdiction. (Jensen-ReconTrust)

The attorneys conclude “the motion by the defendant to dismiss must be denied and the prior order setting aside the state court injunction should be withdrawn and the matter remanded to the state court.”

While, the judge ponders his response to the filing, the plaintiff has moved the case to the 10th Circuit Court of Appeals in Denver (Appeal) The Bank of America has become the symbol of what’s wrong in America where homeowners (taxpayers) want less federal control and more accountability. The plaintiff Peni Cox has become a symbol of homeowners everywhere caught in the financial meltdown fighting faceless – paperless financial giants of Wall Street and their legal brain trusts.

Shareholders and mortgage investment portfolio managers are beginning to quietly caution banks about their foreclosure policies. Most of the financial institutions with foreclosures have received TARP TARP (Troubled Asset Relief Program) was designed to get so-called toxic assets off the books of major banks. These assets included mortgage-backed securities deemed impossible to value. Because banks could not buy and sell these securities, they were becoming increasingly illiquid, and a credit crunch began to emerge as lending between banks ground to a halt. TARP funds were utilized to purchase these assets, injecting banks with liquidity.

Barlow continues to champion his client’s rights contending remedies were taken away from her by faceless lenders who continue to overwhelm homeowners and the judicial system with motions and petitions as remedies instead of actually making a good-faith effort in face-to-face negotiations to help homeowners. “Mortgage lenders are required by law to be registered and have offices in the State of Utah to do business, that is unless you’re the Bank of America or one of their subsidiary companies which apparently are above the law in Utah,” Barlow said. “The Bank of America and other financial institutions, under the guise of mortgage lenders are trampling the rights of citizens,” he said.

Bank of America acquired the bankrupt Countrywide Home Loan portfolio in a stock deal June 3, 2009. And, according to the ReconTrust, the bank has over 1162 Utah homeowners in foreclosure as of July 10, 2010.

Next week KCSG News will report on Utah court cases in which the plaintiffs (homeowners) claim neither the lender, MERS (Mortgage Electronic Registration System), nor the Bank of America, nor any other defendant in the case, has any remaining interest in the mortgage promissory note bundled with other notes and sold as mortgage-backed securities or otherwise assigned and split from the Trust Deed. Last month the Florida Supreme Court issued a ruling protecting homeowners from losing their homes to foreclosure mills hired by the lenders to foreclose using bogus documents created for lenders in which the lender had no secured interest. Similar cases are now making there way through Utah courts.

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Posted in bank of america, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, MERS, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Real Estate, Recontrust, STOP FORECLOSURE FRAUD, tarp funds, TROComments (0)

Notice of Appeal Filed – Stay of Court Order to Vacate Injunction Stopping Bank of America Foreclosures in Utah Requested

Notice of Appeal Filed – Stay of Court Order to Vacate Injunction Stopping Bank of America Foreclosures in Utah Requested


There is something not right here and I think the outcome might surprise us!

by Morgan Skinner, KCSG News

St. George, UT) – A Notice of Appeal to Federal Judge Clark Waddoups court order vacating an Injunction against Bank of America and its subsidiary ReconTrust Company halting all foreclosures in Utah was filed Friday, June 25, 2010 by St. George attorney John Christian Barlow.

Barlow told KCSG News he was “troubled by Court ruling but unrelenting in pursuit of redress for his client (Cox) and other homeowners who have become victims of mortgage lending gone mad.” Barlow said he has motioned the court to allow Cox’s complaint to include a “Class of Citizens” currently in foreclosure in Utah. Barlow contends his client’s rights to remedies were taken away from her by a faceless lender who continues to overwhelm homeowners and the judicial system with motions and petitions as a remedy instead of making a good-faith effort in face-to-face negotiations to help homeowners as the Utah legislature intended. The David and Goliath legal battle over federal versus states-citizens rights is headed to the 10th Circuit Court.

Judge Waddoups’ Memorandum of Explanation in support of vacating a statewide Preliminary Injunction halting all foreclosures by the Bank of America only served to raise more questions.

Some of the questions include:

1.) Why is the judge’s ruling at variance with his previous rulings this year as noted in a Letter to Judge Waddoups submitted to the court June 10th, 2010 by the Plaintiff’s counsel John Christian Barlow, Esq. and E. Craig Smay, Esq. and posted June 21, 2010 in the court docket, after the Ruling and Memorandum of Explanation.

2.) Why did Judge Waddoups essentially brush aside the Plaintiff’s pleading that included the Supreme Court decision Cuomo vs. Clearing House Association in which the Court said…“If a State chooses to pursue enforcement of its laws in court, its targets are protected by discovery and procedural rules” meaning a state has a right to enforce its own laws against national banks.

3.) Why hasn’t Judge Waddoups recused himself from all Bank of America or ReconTrust Company related cases since he was a senior partner in the law firm Parr, Waddoups, Brown, Gee & Loveless now Parr, Brown, Gee & Loveless that represented the Bank of America in Utah Fourth District Court, Case No. 070402786 before he took the bench. And, the law firm continues to represent the Bank of America and its subsidiaries. According to the Code of Conduct for US Judges, a judge should recuse himself when there may be a conflict of interest.

4.) Why shouldn’t Judge Waddoups recuse himself from any case in which his old law firm represents either the plaintiff or the defendant until he takes full distribution of his retirement fund with the law firm as disclosed in Judge Waddoups most recent Financial Disclosure Statement that shows he only took a partial distribution of his retirement from the firm’s 401K

“Bank of America acquired the bankrupt Countrywide Home Loan portfolio in a stock deal June 3, 2009. And, according to the ReconTrust website, the Bank of America has over 1113 Utah homeowners in foreclosure this month, and the numbers keep growing,” Barlow said.

The second part of the Plaintiff’s complaint has yet to be addressed. It alleges neither the lender, nor MERS*, nor Bank of America, nor any other Defendant, has any remaining interest in the mortgage promissory note. The note was bundled with other notes and sold as mortgage-backed securities or otherwise assigned and split from the Trust Deed. Barlow said he has begun a quiet title action and expects the court to adjudicate it according to the facts of evidence which will clearly demonstrate lenders bundling notes into securities and trading in the financial markets have created the underlying homeowner’s mortgage nightmare.

*MERS(Mortgage Electronic Registration System) is a process designed to simplify the way mortgage ownership and servicing rights are originated, sold and tracked created by the real estate finance industry. MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans as securities.

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



Posted in bank of america, bogus, breach of contract, foreclosure, foreclosure fraud, foreclosures, MERS, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Recontrust, STOP FORECLOSURE FRAUDComments (2)

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

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