We tell all of our clients that this ride is a roller-coaster. Thanks to an inexplicable ruling by federal judge Ted Stewart, on the heels of another inexplicable ruling by federal judge David Sam, we are in the tunnel of the Texas Giant at Six Flags.
The backstory is this: The Utah legislature enacted law that said anyone who wants to foreclose on a house in Utah must do so using either an attorney in Utah, or a title company doing business in Utah. It did not matter if you were the local bank down the street or Bank of America. The rationale was that it would guarantee Utah homeowners facing foreclosure an actual entity with people and an office in the state they could talk to to obtain information about their foreclosure.
Despite this law, and two previous rulings by Judges Waddopus and Benson, Bank of America continued to foreclose on Utah homes using its foreclosure arm, ReconTrust. ReconTrust is neither a bank or a title company.
Several lawsuits have been filed to get a clear ruling on this matter with the two most recent going in favor of Bank of America.
Essentially, both judges held the National Banking Act trumps Utah law, and therefore Utah, or any other state for that matter, is not allowed to write its own laws as to how foreclosures should proceed. Since ReconTrust is based in Texas, Texas law applies to Utah homeowners or, under these rulings, anywhere else ReconTrust wants to foreclose.
It is bad law. There is no way to sugar coat it. Luckily, the Utah Attorney General has intervened in both cases, and they will be appealed to the 10th Circuit. Unfortunately, it could take years for these matters to be resolved by the Appeals Court and leaves current Utah homeowners in limbo.
There are still several grounds for fighting foreclosures in Utah, and one argument now is to apply the much more favorable law in Texas to ReconTrust’s actions. However, it will not be an easy road to navigate.
Regardless, if you are facing foreclosure, contact an attorney today. As fast as this area of law is changing, it truly appears to be your only hope in getting any sort of favorable outcome.