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The Utah Attorney General's Office says the entity responsible for 4,000 home foreclosures yearly in the state is violating the law.

In a filing with the 10th Circuit Court of Appeals in Denver, Assistant Attorney General Jerrold Jensen said the ReconTrust Co., a unit of Bank of America, is not allowed under Utah law to conduct foreclosure sales.

The brief signals the first substantive effort of the Utah Attorney General Mark Shurtleff to weigh in on legal issues surrounding thousands of foreclosures in Utah. At the end of 2010, more than 10,000 properties in the state were in the foreclosure process, the result of the bursting of the real estate bubble created by a free-wheeling mortgage lending system.

Attorneys have been challenging foreclosures with lawsuits that argue mortgage bankers and investors in bundled mortgages have not properly registered transactions with county recorders, and then violated state and federal laws in foreclosure proceedings. But the challenges have been largely unsuccessful, particularly in federal courts.

The Utah Attorney General's brief "strikes me as significant," said Chris Peterson, a University of Utah law professor who has consulted on foreclosure matters with the attorneys general of Massachusetts, New York and Illinois. "It signals a new willingness o begin taking on some of the problems in the foreclosure mills that have been evicting families from their homes."

Jensen said the Utah Attorney General's Office is examining related issues and may become involved in other cases.

The lawsuit under appeal was filed on behalf of St. George resident Peni Cox, who challenged foreclosure proceedings of her home by ReconTrust. A state judge ordered a temporary halt to Bank of America foreclosures in Utah as a result of the lawsuit, but U.S. District Judge Clark Waddoups overturned the ruling last June, ruling that the National Bank Act preempted Utah law.

"He cannot be more wrong," Jensen said Thursday. He pointed out that the Utah Legislature changed the law to protect homeowners who were unable to contact anyone to discuss their loans after a notice of default was issued. That law has already been upheld by the Denver court, he said.

Peni's attorney, John Christian Barlow of St. George, called the attorney general's actions "extraordinarily significant."

"The state stepped in and said that's correct: We don't want the bank foreclosing in Utah under the process they're using," he said.

Jensen, in a filing Wednesday with the Appeals Court, said under Utah law trustees who sell foreclosed property must be either attorneys who are members of the Utah State Bar or title insurance companies, and that ReconTrust is neither. Federal statutes specifically state national banks may not act in violation of a state or local law, the brief says.

The state is asking that the case be sent back to the federal court in Utah for further proceedings.

A Bank of America representative said Thursday the appeals court should uphold Waddoups' ruling.

"We believe the district court was correct in its ruling in our favor and believe the ruling should not change as a result of this appeal," Jumana Bauwensin said in an e-mail. "Our first priority is to help our customers remain in their home as demonstrated by the more than 775,000 permanent loan modifications completed since January 2008."

Hundreds of lawsuit have been filed in courts in Utah over foreclosures. Federal courts, where many of them end up, have been overwhelmingly cool to homeowners' arguments that foreclosures have not followed state and federal laws.

"I think the state wants these federal judges to revisit these cases that are in front of them," said Barlow, the St. George attorney.

The case

Cox v. ReconTrust Co., 10-04117,U.S. Court of Appealsfor the 10th Circuit(Denver).