Judge Clark Waddoups (AP photo)

Judge Clark Waddoups (AP photo)(St. George, UT) – A preliminary injunction issued by Judge James L. Shumate of the Fifth District Court halting all foreclosure proceedings in the State of Utah by Bank of America, its subsidiary companies and Mortgage Electronic Registration Systems, Inc. (MERS) hinges on whether the State of Utah can require mortgage lenders to be registered and have offices in the state. The action came as a result of the petition for preliminary injunction filed by St. George Attorney John Christian Barlow on behalf of his client Peni Cox. The defendant, Bank of America, has filed to have the case moved to federal court in Salt Lake City where it has requested an emergency hearing before Judge Clark Waddoups to have the injunction dissolved claiming exemption from state regulation. ReconTrust is the entity Bank of America uses to foreclose on homes. Neither is registered in the State of Utah.

Judge Shumate issued the injunction in accordance with Utah Code §16-10a-1502(5) which states that upon a finding by a court that a foreign corporation has transacted business in this state in violation of Part 15 of the Utah Revised Business Corporation Act “the court shall issue, in addition to or instead of a civil penalty, an injunction restraining the further transaction of the business of the foreign corporation and the further exercise of any corporate rights and privileges in this state”. No hearing was required by law.

Judge Waddoups will hear oral and written arguments Thursday at 10:00AM in Salt Lake federal court on a motion by the Defendant for an emergency dissolution of the preliminary injunction against the Bank of America stopping foreclosures in Utah as well as an emergency motion to remand the case to state Fifth District Court in St. George, Utah. Monday the Plaintiff filed an emergency motion asking the court to grant a partial summary judgment finding ReconTrust in violation of Utah code section 16-10a-1501 and Utah Code section 57-1-21(3) and stop further ReconTrust foreclosure proceedings until it complies with the Utah Code.

The petition for partial summary judgment filed by St. George attorney John Christian Barlow also requests the judge order ReconTrust to (1) give all Utah residents who desire and qualify for a modification under the Home Affordable Modification Program (“HAMP”) with Bank of America 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, (2) 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 ReconTrust complies with the Utah Code section 16-10a-1501 and Utah Code section 57-1-21(3).

KCSG News reviewed the court filings Tuesday and found that Salt Lake attorney Richard Ensor representing Bank of America is ramping up his legal team for the hearing to include Bank of America counsel Sean D. Muntz, Amir Shlesinger of Los Angeles and Roy Arnold of Pittsburg from the law firm of Reed Smith, LLP.

The case was brought against the bank by local St. George resident Peni Cox who has declined media interviews or comment. However, she has submitted the following statement to KCSG News through her attorney John Christian Barlow:

“Because of the loss of income, through no fault of her own, Cox was unable to afford the payments on her home. She tried to make good on her loan by obtaining a short sale on the property at which time about $126,000 was owed. She subsequently obtained an offer for $95,000. The Bank of America refused to acknowledge her or the offer. The has since dropped in value to near $60,000. She tried to get the bank to accept a cash offer of $65,000. The bank declined. Cox believes she has done here best to make good on the loan. Frustrated by the whole process, he began to research the law and became aware that Bank of America and ReconTrust were not operating in compliance with the state regulations. “It made me angry that a bank could operate illegally and take my home. My question seemed simple, when I asked about all of the bank transactions and bundling of promissory notes used for securities. How do I know who owns the promissory note backed by the Trust Deed and who has the right to foreclose. When I asked the bank to produce the paperwork showing they had the right to foreclose on my home, they ignored me. My story can’t be that different from many other homeowners in foreclosure. So, I asked attorney John Christian Barlow to file an action requiring the bank to comply with the state law and show me who the owner is of the promissory note and has the right to foreclose.”

Attorney John Christian Barlow, a sole practitioner in St. George, Utah told KCSG News Saturday, “My client’s rights to remedies were taken away from her by a faceless lender who continues to overwhelm homeowners and the judicial system with motions and petitions as a remedy instead of making a good-faith effort in face-to-face negotiations to help Utah homeowners as the legislature intended. For this reason we have asked the court to halt the Bank of America foreclosures in the state until it complies with the state law requiring lenders to be registered and have offices in the State of Utah to do business,” Barlow said.”

Judge Clark Waddoups can be reached by email at