The Attorney General's Motion to Intervene and Memorandum of Support of Intervention written by Assistant Attorney General Jerrold Jensen said, "Utah is a non-judicial foreclosure State and that most real estate foreclosures in Utah never see the inside of a courtroom." The pleading says that "in the last couple of years, as the number of foreclosures has escalated, there has been an increasing interest among homeowners who believe they have been wronged by their lender or mortgage servicer to challenge these foreclosure actions in court."
"The State of Utah has, with one exception, taken a hands-off policy as to these court actions. But this court’s December 16, 2011 ruling in this case was the first court ruling to hold that Utah’s trustee statute, Utah Code § 57-1-21, was preempted by Texas law". The State of Utah cannot sit idly by without objecting to such a holding", Jensen said.
The Utah Legislature has amended Utah’s trustee statute three-times, the most recent in 2004, to limit the “power of sale” of trustees conducting foreclosure sales in the State of Utah to members of the Utah State Bar or title insurance companies with offices in the State. The Memorandum says the revised Utah statute was found to be constitutional by the Tenth Circuit “making it easier for Utahns to meet with trustees, who play a pivotal role in non-judicial foreclosures. Kleinsmith v. Shurtleff, 571 F.3d 1033 (10th Cir. 2009).
"The State of Utah takes very seriously foreclosure actions conducted on the homes of the citizens of this State. And while it is the position of ReconTrust that Utah law does not apply to foreclosures it conducts in the State of Utah, that is NOT how the State of Utah reads the interplay between its trustee’s statute and the National Bank Act. It is also not the way the Office of the Comptroller of the Currency (“OCC”) reads it either. ReconTrust Opposition
Because the State of Utah does not get involved in every foreclosure action that goes to court, it had no reason to pay any more attention to this case than any of the other numerous foreclosure cases that are filed. Only when this court declared that Utah’s statute is preempted by the National Bank Act and Texas law did the State become alarmed about preserving the integrity of its trustee statute.
The State has asked the court to be heard in oral arguments. A date has not been set.