Bank of America Given Go Signal to Sell Bank Owned Foreclosures in Utah

A previous judge order which prevented Bank of America from selling bank owned foreclosures in Utah had been overturned by federal judge Craig Waddoups. The latest ruling means that the bank, along with its foreclosure unit ReconTrust Co., can now proceed in selling foreclosed properties in the state.

The initial order came after a lawyer convinced the state’s fifth District Judge James Shumate to prevent the bank from selling since it is not registered to conduct business in Utah. The lawyer represents a homeowner who lost her house after allegedly failing to convince the bank to accept a short sale. At the time of the initial order, Bank of America has hundreds of repossessed homes for sale and foreclosed properties in its books.

In response, Bank of America argued that it did not need a Utah registration to be allowed to unload properties through foreclosure sales or home auctions for sale. The bank also stated that the state judge failed to provide notice or hearing prior to issuing the order.

According to local financial experts, the decision of Judge Waddoups to allow Bank of America to sell bank owned foreclosures in Utah is based on the fact that the bank is federally chartered, so it is not required to file paperwork in the state. In addition, the bank has denied involvement in the case of the property owner represented by the lawyer who requested the initial order.

Bank of America officials stated that the loan for that particular case was issued by New Line Mortgage and they believe that the note was later sold to the government-sponsored enterprise Fannie Mae. They also asserted that the bank did not issue the loan and has no connection with the case. The bank issued a statement claiming that its first concern is helping more than half a million homeowners in the state retain their homes through loan modifications. Utah is one of the top areas when it comes to foreclosures by state.

Bank of America owns other bank owned foreclosures and mortgages in Utah which it acquired after it took over Countrywide Financial Corp. almost two years ago. The federally chartered institution adds that its priority right now is to help customers retain their properties.

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