Why? US Bank didn’t want to face a hearing in
Federal Court on the constitutionality of Colorado’s foreclosure process. Judge William Martinez had set a hearing on Colorado’s
Rule 120 hearings for Wednesday May 15, 2013.
In Colorado
a court must approve a foreclosure sale following a Rule 120 hearing. The only two issues litigated at the hearing are
whether there is a default on the note and whether the borrower is in the
military. However, the issue of standing
must always be addressed in any court proceeding. Here a company can be in court if it is the
holder of the borrower’s note.
Unlike other
states, Colorado does not require a mortgage company to prove they hold the
original note on a mortgage. Colorado statutes
section 38‑38‑101 allows a foreclosing company to produce just a copy of the
note along with a statement by its attorney that the company is the holder of
the note.
Ms. Brumfiel
was to argue to the Court that not allowing a borrower to contest the validity
of the holder’s evidence of ownership is a violation of the Due Process Clause
of the 14th Amendment to the United States Constitution.
If Judge
Martinez had ruled that Rule 120’s attorney statement provision is unconstitutional,
foreclosing in Colorado would no longer be a slam-dunk.
Congratulations
to Ms. Brumfiel, but I’m sure we’ll be back in court. US Bank may have dodged this attempt at justice
for Colorado’s homeowners by giving up on one foreclosure, but we’ll keep
fighting.
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