by David Ellis
on Friday, June 11th, 2010 at 4:20pm.
St George, Utah has had it's share of foreclosures, but one huge source of foreclosures has just been cut off. Bank of America, one of the largest banks in the nation has been halted in it's ability to foreclose on properties in the state of Utah. But...will the ruling hold up?
On May 22, 5th District Court Judge James L. Shumate in St George ruled to stop all foreclosure proceedings in the state of Utah by Bank of America. The ruling, if upheld, would require Bank of America and all other mortgage companies to have local offices in Utah where homeowner's can go meet in person with their bank to negotiate their loan terms. Bank of America does not currently have local offices, and therefore (allegedly) does not conform to state laws.
Bank of America, not surprisingly, does not see it that way. According to Tony Semerad of the Salt Lake Tribune, Bank of America is fighting back...
"bank attorney Roy Arnold argued that 5th District Court Judge James L. Shumate in St. George had run afoul of proper legal procedure, saying he issued the injunction without a hearing or adequate notice to bank officials. Homeowner Cox also had not posted a security bond as required by law, Arnold said.
Bank lawyers attacked the legal basis for the injunction as well, arguing that state laws requiring companies to register when transacting business in Utah do not apply to national financial institutions. Their contention: those banks are instead covered by federal laws and regulations under the National Bank Act.
The preliminary injunction is too broad and has caused BofA ``significant harm'' by impeding to its ability to foreclose on all delinquent Utah owners, of both commercial and residential properties across Utah, Arnold said."
Will Bank of America be impeded in it's ability to foreclose on properties in Utah, or will it be business as usual? It will be interesting to see how this ruling plays out.