Utah Attorney General Mark Shurtleff is claiming that Bank of America’s foreclosure unit Recontrust is conducting illegal activity within the state.
According to Utah code, the only valid trustees who have the “power of sale” and can foreclose a property in the state are members of the state bar or title insurance companies.
Shurtleff alleges in his letter to Bank of America president Brian Moynihan on Wednesday that Recontrust has neither of these titles. In the letter, Shurtleff said, “all real estate foreclosures conducted by Recontrust in the state of Utah are not in compliance with Utah’s statutes, and are hence illegal.”
Recontrust, Simi Valley, Calif., processes foreclosures and provides default services for mortgage servicing companies in 16 non-judicial states. The unit has allegedly been foreclosing thousands of homes in Utah under its own name.
By being registered as a national bank, Shurtleff said he thinks that Recontrust believes it is exempt from adhering to the code sections that were passed by the Utah legislature in 2001 and 2004 for the purpose of protecting homeowners when they deal with possible foreclosure.
Shurtleff said he fully intends to enforce Utah’s laws pertaining to this matter. The AG is requesting that Charlotte-based Bank of America, the largest national bank by assets, respond to the claim within 30 days.
A spokesperson for Bank of America said “Recontrust will continue to handle foreclosures in compliance with applicable laws. Bank of America makes every effort to reach out to delinquent customers to offer home retention options as well as foreclosure avoidance programs. Foreclosure is always our last resort.”
