Posted on 06/06/2010 6:42:28 AM PDT by Chunga85
(St. George, UT) June 5, 2010 – A court order issued by Fifth District Court Judge James L. Shumate May 22, 2010 in St. George, Utah has stopped all foreclosure proceedings in the State of Utah by Bank of America Corporation, ; Recontrust Company, N.A; Home Loans Serving, LP; Bank of America, FSB;
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The attorney’s for Bank of America promptly filed to move the case to federal court to avoid having to deal with the Judge who is not unaccustomed to high profile cases and has a history of watching out for the “little people” and citizen’s rights.
(Excerpt) Read more at kcsg.com ...
The judge is correct in that the separation of the promissory note from the deed of trust renders foreclosure by the party seeking to do so illegal under Utah law.
In other words, the contractually obligated parties are the home buyer and the holder of the deed of trust, with any third party having no legal standing to foreclose.
They're going to have to backtrack and untangle their own money-grubbing nightmare in order to take back the property that was "decollateralized" by their actions.
What I am suggesting is that the company (bank, subsidiary, or other entity) that is attempting to foreclose on the property would have to prove that it holds the mortgage on the property. The way these mortgages have been securitized and sold repeatedly in recent decades, this may be a very difficult thing for a foreclosing entity to do but is more critical now than ever before.
Judges like this are telling people "hey, go ahead and stop paying for your house, it's ok! I'll stop the bank from foreclosing on you!" This is why the number of "strategic defaults" in this country has gone from 19% to 32% in one year.
"Strategic Defaults" are done by those people who could otherwise pay for their mortgage and honor their legal commitment to the bank, but choose not to because the loan value is higher than the current home value.
You read that right: These are people that can and should be paying for their homes - they can afford it - but they choose not to which screws the rest of us who've played by the rules and paid for our homes.
This country is completely upside down from what it should be. What used to be wrong is now right, what used to be right is now wrong. What used to be a shameful thing to do (default on one's mortgage) is now considered "strategic."
The carnage that BO and his evil minion's have wrought upon this country will take decades to fix, if it can be fixed at all ........
” When I read about BA giving credit cards/mortgages to illegals, I immediate refinanced my mortgage with someone else and canceled my card with them.”
I forgot to say good for you!
I actually convinced a few friends to end their relationship with BA too. Of course, since I live in a hotbed of migrant farmer (code word for illegal) activity, BA opened a branch not too long ago. Bastards. Thing is, most illegals deal in cash and don’t use banks.
The evidence is pretty plain. The law is that the banks will have a office in Utah so the people can negotiate face to face. B of A says they don’t have to because federal law trumps state law. They got funds to negotiate with homeowners, they don’t want to so they think they can take OUR money and just kick people out. Read the article
The judge is playing Obama’s game of “big bad bankers”. Don’t get me wrong - BofA is a horrible bank with a bad tack record regarding honesty and general business practices.
But that being said - arbitrarily halting all foreclosures is wrong-headed. I guarantee there are many very real defaulted loans that need to be foreclosed on. This judge is completely tying this banks hands.
“I am not getting your point here.
Because BoS and WF don’t work with you to adjust a mortgage that you applied for and could not pay, they are the enemy of the people and friends of illegals.”
You are correct....you are not getting my point here ;-)
Correct, you'll see a massive deflation of home values in this country as any bank that holds paper on a foreclosed (and vacant) home or piece of land will scurry to get out from under that paper and sell off those assets for whatever they can get for them.
Consider the very strong possibility that a homeowner in Utah signed a mortgage contract with a Utah bank -- and that mortgage was later securitized and sold to an entity outside the state of Utah (e.g., Bank of America, Recontrust Company, etc.).
In the example I just described here, the Utah resident never signed a legally binding contract in another state. Why should this homeowner have his rights as a citizen of Utah abrogated simply because the original bank made a decision to sell the mortgage outside the state?
“Thing is, most illegals deal in cash and don’t use banks.”
About 15 years ago, B of A started a multi- million dollar advertising blitz on spanish radio and TV pointing out all of the ways B of A could help the “undocumented”. They own most of the illegal transactional business today as a result.
Utah law cannot and does not render the contractual laws of other states null and void.
This contract was made under the laws of another state. Because they reside in Utah does not make them exempt from those laws. They signed the contract and agreed to the terms and are now bound to the prosecution of terms.
Just because this judge is an activist and decided to become the law on his own merit does not make it void under his interpretation of the law.
If the secondary market for mortgages is "crippled," then we might actually restore a sound banking system in this country.
As for USConservative's point about a massive deflation in property values . . . he/she is probably right. But that just means those property values never should have been so high in the first place. They were just artificially inflated by the increasingly lax lending terms that have been extended to homeowners over the last few decades.
” Why should this homeowner have his rights as a citizen of Utah abrogated simply because the original bank made a decision to sell the mortgage outside the state? “
Also, as you know, these mortgages were often sold multiple times, often leaving vague who ended up with the right to actually foreclose ;-)
The Bank of America and other large corporations don't have to operate in Utah if they can't abide by the rules.
In cases like this I go back to the advice I once received from one of the most astute business people I ever knew. He was a real estate developer who sold off almost all of his holdings in 2006-07, and later made a lot of money short-selling oil when the price rose above $140/barrel in 2008.
His advice would be particularly relevant to any person or company who was in the business of buying collateralized mortgages in the last ten years:
"If you don't understand what you're buying, then don't buy it."
Of course. When a bank forecloses and loses big money on the mortgage, that's the same thing as buying the property for pennies on the dollar. LOL!
I REALLY don't have a problem with that. I don't care if the state's laws are extremely stupid and misguided, as long as they do not infringe on fundamental and inalienable rights.
The genius of federalism is that the people of each state should have the freedom to experiment to find what works best for the people of that state. That means the freedom to do dumb things and to live with the consequences.
This judge was NOT acting in an activist capacity in this case. He was applying duly enacted state legislation to an issue before him.
When the case is removed to federal court, that's when you're likely to see judicial activism as carried out under the 10th amendment-gutting commerce clause.
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