Jenkins's ruling said there is a serious question of whether ReconTrust Company is violating state law by carrying out non-judicial foreclosures claiming federal law trumps state law. He is the first Utah federal judge to side with homeowners in their battle with national banks claiming exemption from state laws because of the national charter. The Thompsons are represented by Hurricane attorney Benjamin Ruesch.
The Utah Attorney General’s Office intervened in another St. George homeowner's lawsuit arguing that the Bank of America was illegally foreclosing on properties in Utah. KCSG News has learned there is a settlement agreement being negotiated over foreclosure actions by ReconTrust which the Attorney General considers illegal. Attorney General's Letter
The Utah Attorney General accused the Bank of America of illegal foreclosure activities using its subsidiary ReconTrust Company. In the letter, the Attorney General said that ReconTrust is in violation of Utah law as set forth in Utah Code Sections 57-1-21 and 57-1-23, which outline the requirements for lawful non-judicial foreclosures. Support for the attorney general's position is found in a recent 10th Circuit case, Shurtleff v. Kleinsmith in which Utah Code Sections 51-1-21 and 57-1-12 were found to be constitutional. The letter said that ReconTrust is in violation of the National Bank Act, which does not allow national banks to operate in contravention of State and local law. ReconTrust's exercise of the fiduciary powers in the State of Utah is a violation of State law, but also applicable federal law, Shurtleff wrote.