A federal judge on Friday dissolved a court order that had stopped one of the country’s largest banks from selling foreclosed homes in Utah.
U.S. District Court Judge Clark Waddoups, after hearing legal arguments Thursday, has granted a Bank of America request to cancel the preliminary injunction against its trustee sales in the state.
Waddoups’ decision wipes out the injunction issued May 22 by 5th District Judge James L. Shumate. That order had halted hundreds of Utah foreclosure sales by Bank of America and its subsidiary, ReconTrust.
The injunction was issued in a case brought by St. George resident Peni Cox, who lost her home to foreclosure earlier this year.
Bank of America said Friday it was pleased with the court’s ruling.
In a statement, the bank said its priority was to help customers keep their homes. Officials pointed to what they characterize as extensive efforts, since the housing crisis worsened in 2008, to modify troubled loans.
“But unfortunately, due to ongoing recessionary impacts, for many customers a transition to alternative housing is the only option,’’ the bank’s statement said. “When that happens, we work in compliance with the governing laws to facilitate that transition with the least amount of difficulty for the borrower and the affected community.’’
ReconTrust, BofA’s foreclosure arm, says on its website that it is currently pursuing at least 977 foreclosures in Utah. Records from RealtyTrac, which tracks U.S. foreclosures, indicate that ReconTrust, Bank of America and its loan servicing company, BAC Home Loan Services, between them sold off at least 310 foreclosed homes in Utah between July 2008 and March 2010.
Lawyers for Cox had argued that Bank of America and ReconTrust were ineligible to conduct trustee sales because ReconTrust did not register as a business entity with the Utah Department of Commerce.
Judge Waddoups also turned down a motion by Cox’s attorney, J. Christian Barlow, of St. George, to have the case transferred back to state courts. The issue of state versus federal jurisdiction was a major issue of contention Thursday. Bank lawyers argued they were governed by the federal National Bank Act and not state law.
Barlow did not return a call seeking comment Friday.
In his order, rendered early Friday afternoon, Waddoups said he would file a memorandum shortly explaining his legal reasoning.
BofA can resume Utah foreclosure sales | The Salt Lake Tribune.