10th Circuit limits Chase using bankruptcy claim preemption to dismiss lawsuits

Bill Paatalo is back on the West Coast Foreclosure Show to discuss a recent 10th Circuit Court of Appeals ruling which going forward will deny Chase the right to use bankruptcy preemption rules to deny homeowners pursuing claims against Chase due to endorsements of notes from WAMU, when those ostensibly legal (not!) endorsements occurred after September 25, 2008. Sounds complicated let's unpack matters for you: When WAMU went into bankruptcy receivership after going broke in September 2008, the FDIC took over its assets in receivership, using that receivership to transfer the WAMU assets to Chase Bank. Meanwhile, the FDIC set a 'claims bar' date of December 30, 2008, which had the effect of limiting and sometimes preventing homeowners from pursuing lawsuits against Chase based upon note endorsements from WAMU, when those endorsements happened while the FDIC had WAMU in receivership. Since many of those WAMU to Chase note endorsements occurred after the FDIC receivership ended, the bankruptcy preemption rules Chase has been using to stifle lawsuits will no longer be available to Chase to shut down those same lawsuits against them over illegal note endorsements. And all of this by the way in a TILA rescission lawsuit. The 10th Circuit ruling of Pembroke Living Trust v. US Bank National Association concerns principally a TILA rescission claim, which the 10th Circuit shot down. While issuing that ruling, the Court formally addressed the bankruptcy preemption claim issue highlighted above.