The preliminary order that 5th District Utah Court Judge James L. Shumate issued stalling administrative foreclosures by Bank of America is hanging on legal interpretations regarding the authority of the Utah Legislature in the matter.
Bank of America, sensing a conflict between Federal and State delegations of authority, has applied to move the case to the Salt Lake City Federal Court, presumably because they have a plan in terms of which bigger guns will rule differently, and this time in their favor?
Judge Shumate announced his decision in accordance with a local Utah State Code that requires him to restrain free business activity where a foreign corporation has violated the Utah Revised Business Corporation Act, a judge may also do this without a formal hearing. Today, Judge Waddoups of the Federal Court will be considering oral and written arguments on the pro’s and con’s of the Utah State Judge’s decision, following the Bank of America’s application to have the injunction stoppage decision on its foreclosures overturned.
The petition to which the Utah District Court Judge acceded was lodged by St George Attorney John Christian Barlow who made what is to many the following reasonable request. He asked that the Bank of America
“give all Utah residents who desire and qualify for a modification under the Home Affordable Modification Program (“HAMP”) with Bank of America have the opportunity to submit the required documentation to the court through an attorney and receive a judicially ordered modification by St. George Judge James L. Shumate until the end of the program, and
“for individuals who do not qualify for a modification and are unable to make mortgage payments on their property, be foreclosed upon in a foreclosure proceeding conducted with judicial oversight by the court until such time as the defendant complies with State requirements.”
The original suit was introduced by a local St. George resident who, because of loss of income that was no fault of her own, had to short sell but was unable to get Bank of America to even acknowledge her proposal. Her attorney shared her frustrations, and decided to investigate the legalities of its position. When he asked the bank to produce evidence of its rights to foreclose, he was ignored too. He then filed an application requiring Bank of America to comply with State law and produce the evidence. This lead in turn to his discovery that Bank of America did not even have local offices, as is required by State of Utah law.
When I last looked, America was still a federation of United States, and not a central politburo. We are interested to see which government wins this constitutional battle.
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