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C.R.C.P. 121 #1-15 Certificate of Conferral: Plaintiffs, in good faith, have contacted defendants regarding this motion for summary judgment. Comes now plaintiffs Mason L Ramsey & Judith Mae Nevilles Motion for Summary Judgment on undisputable facts and controlling law. MEMORANDUM OF POINTS AND AUTHORITIES I. PROCEDURAL HISTORY

This action was initially commenced on October 29th, 2010. Defendants CITIMORTGAGE and CITIBANK filed a joint motion to dismiss pursuant to F.R.C.P. 12 (b)(6) on the grounds that Plaintiffs complaint failed to state claim because defendants are not state actors, that CITIBANK as a parent corporation of CITIMORTGAGE should not be held liable because it did not foreclose on plaintiffs. Defendants also invoked the ROOKERFELDMAN & the YOUNGER ABSTENTION DOCTRINES to dismiss plaintiffs action.
II.

INTRODUCTION AND BACKGROUND

The history of national banking legislation has been "one of interpreting grants of both enumerated and incidental `powers' to national banks as well as federal savings associations [which include savings banks]. Bank of America et al v City of San Francisco et al 309 F.3d 551 (9th Circuit) (2002) as the court stated: Congress has legislated in the field of banking from the days of M'Culloch v. Maryland, 17 U.S. (4 Wheat.) 316, 325-26, 426-27, 4 L.Ed. 579 (1819), creating an extensive federal statutory and regulatory scheme. The history of national banking legislation has been "one of interpreting grants of both enumerated and incidental `powers' to national banks as grants of authority not normally limited by, but rather ordinarily pre-empting, contrary state law." (citations omitted). Indeed, since the passage of the National Bank Act in 1864, the federal presence in banking has been significant. See id. at 32-33, 116 S.Ct. 1103. Similarly, since MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF SUMMARY JUDGMENT Page 1

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the passage of the HOLA in 1933, OTS regulations have governed the "powers and operations of every federal savings and loan association from its cradle to its corporate grave." de la Cuesta, 458 U.S. at 145, 102 S.Ct. 3014

A number of Supreme Court cases have stated that all of the powers of national banks are derived from the Laws of United States; and national banks are federal instrumentalities created for national and public purposes. Osborn v Bank of United States, 22 U.S.738 (1824) Easton v. Iowa,188 U.S.220 (1903) On that premise the question presented is whether a law

of the United States can authorize a power of sale foreclosure to a national bank like CITIBANK, a federal instrumentality and public bank corporation, acting through its subsidiary CITIMORTGAGE without violating the 5th Amendment. Plaintiffs submit that in this case CITIBANK acting through its subsidiary CITIMORTAGE violated both the 5th Amendment (Bivens claim) under color of federal law because they are federal instrumentalities and the 14th Amendment by using power of sale foreclosure under color of state lawThe Colorado Foreclosure Law by requiring a Public Trustee, an agent of the State to subject a homeowner to a rule 120 hearing which is limited to what can be determined and does not allow an appeal, and an eviction under the 14th Amendment also under color of state law both actionable under 42 US 1983. In Watters v Wachovia 292 U. S. 559 the court said: National banks' business activities are controlled by the National Bank Act (NBA), 12 U. S. C. 1 et seq., and regulations promulgated thereunder by the Office of the Comptroller of the Currency (OCC), see 24, 93a, 371(a).. The NBA specifically authorizes federally chartered banks to engage in real estate lending, 12 U. S. C. 371, and "[t]o exercise ... such incidental powers as shall be necessary to carry on the business of banking," 24 Seventh. Among incidental powers, national banks may conduct certain activities through "operating subsidiaries," discrete entities authorized to engage solely in activities the bank itself could undertake, and subject to the same terms and conditions as the bank. See 24a(g)(3)(A); 12 CFR 5.34(e).[bold added]

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The Supreme Court has made numerous decisions which would have been relevant in determining whether non-judicial procedures were applicable given the nature of these corporations. Though several appellate courts have had occasion to determine the constitutionality of non-judicial procedures in the form of a power sale provision, none have vetted the corporations seeking this remedy in light of relevant Supreme Court decisions. The issue goes to the core of the nature of federally chartered corporations created under special law for public and national purposes. This issue deals with the right of these corporations to put such a provision in a contract as a power of sale provision, and rests on whether the act of foreclosure is a governmental act or a proprietary act. It is an issue which, in the context of the current economic crisis and massive foreclosures, sweeps the breadth of this nation like a plague destroying families and communities as it spreads, swelling the homeless population in its wake. This issue involves a constitutional right affecting millions of families. III. STATEMENT OF THE FACTS

The facts are not in dispute. CITIBANK is a national bank and CITIMORTGAGE is its operating subsidiary. CITIBANK is a federal instrumentality, federally chartered public bank corporation created for public and national purposes. As a national bank, CITIBANK conducts certain activities through its subsidiary CITIMORTGAGE. (See Watters v Wachovia 292 U. S. 559 ) CITIMORTGAGE is an instrumentality of CITIBANK.(See Watters v. Wachovia, 05-1342, at p. 15) CITIBANK acting through its subsidiary CITIMORTGAGE foreclosed on plaintiffs on October 13th, 2010 through a power of sale (non-judicial foreclosure) administered under a rule 120 hearing of the State of Colorado Foreclosure Law by a Public Trustee who is an agent of the state. The rule 120 hearing is limited to two issues with no right to appeal. CITIBANK acting through its subsidiary CITIMORTGAGE evicted plaintiffs using the Colorado FED statute on November 30th, 2010. As a national bank, [B added] IV. LAW AND ARGUMENT

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A.

GOVERNMENT CONTROL OVER BANKS IS AS A POLICYMAKER TO ADVANCE ITS PUBLIC ECONOMIC POLICY GOALS

National Banks, like CITIBANK and Federal Savings Associations are federally chartered corporations created under acts of Congress (The National Bank Act of 1864(NBA) and The Homeowner Loan Act of 1933(HOLA) respectively, for public and national purposes. CITIBANK, as a national bank, was not created for its own sake, or for private purposes. ..) Infra, Easton citing Osborn. National banks and federal savings associations are among the agencies of the United States created to advance the governments public economic policy goals under the Commerce Clause and implemented by the Necessary and Proper Clause to engage in fostering commerce in the nation which is a purely public function exclusive to the government. As a reward national banks and federal savings associations benefit by not paying state taxes, avoiding state predatory lending laws through the concept of Federal preemption, allowing them to export high interest for the credit card thus avoiding the state usury laws The expansion of the national banking system in 1864 with the creation of the Office of the Comptroller of the Currency ushered a more progressive agenda to implement Hamiltons vision that there was a symbiotic relationship between agriculture, commerce, and manufacturing, and that progress in each of these sectors was necessary for Americas economic development. Even before the Revolution began, Alexander Hamilton had recognized that the future of America lay in business and industry. Hamilton understood that to develop into an industrial power, America would need a powerful economic system. Hamilton also argued that the Central Bank was necessary to the nation in cases of emergency such as the financing of war. (In the Report of Credit II, Dec. 1790) Further, the Office of The Comptroller of the Currency in its publication-- National Banks and the Dual Banking System (2003) p. 3 wrote:

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Although a system of national banks would not be created until 1863, the need for and desirability of federal banks and their potential role in shaping a national economy were evident from the very beginning of the United States

In First National Bank v. Missouri, 263 U.S. 640 (1924) at p. 664 said: The national banks organized under the act are instruments designed to be used to aid the government in the administration of an important branch of the public service. They are means appropriate to that end. . . .

Thus, the governments control over national banks is as a policymaker providing guidance for their national public policy goals through the government regulatory agencies who maintain exclusive control over the banks which does not terminate.
B.

POWER OF SALE PROVISIONS SHOULD NOT BE CONSTRUED TO ACT AS A WAIVER OF A HOMEOWNERS PROCEDURAL DUE PROCESS

National Banks, like CITIBANK, its subsidiary CITIMORTGAGE and Federal Savings Associations, are federal instrumentalities advancing the economic public goals of the government. It is a designation critical in determining their status as federal actors, and whether the use of a power of sale provision in a mortgage contract is constitutional. At issue is whether a power of sale provision assigning a right to a Trustee upon the borrowers default can be authorized by a law of the United States when the operative consequence is to provide a waiver of a homeowners due process requirements under the 14th and 5th Amendments of the Constitution as well as relief of the governments obligation under the Constitution. A waiver that is not knowingly made and a constitutional obligation so slyly evaded. The power of sale provision exercised upon default cannot dictate what due process is due, for as the Court in Fuentes v. Shevin, 407 U.S. 67 (1972) said:

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The contract provisions for repossession by the seller on the buyer's default did not amount to a waiver of the appellants' procedural due process rights, those provisions neither dispensing with a prior hearing nor indicating the procedure by which repossession was to be achieved.(cite)

In practical terms the power of sale foreclosure allows a bank like CITIBANK, and by extension CITIMORTGAGE, in some states like California, the right to take the property from a homeowner without a hearing; and in a state like Colorado with a Public Trustee, the right to subject a homeowner to an inadequate forum such as in the Rule 120 hearing where a less than full and fair hearing is employed with no right to appeal. It also allows the government, through CITIBANK and CITIMORTGAGE, federal instrumentalities, to evade its most solemn obligations under the Constitution by simply resorting to the corporate form. Lebron, infra at p. 374,375 In Warren v. GNMA, 521 S.W.2d 441 (Mo. en banc 1975). The rationale for its decision was found in Federal National Mortgage Association v. Howlett, 521 S.W.2d 428 (Mo.1975) . The Missouri Court only discussed the 14th amendment constitutional question and stated: "We hold that the foreclosure of the deed of trust on appellant's property was pursuant to the Contractual provisions in the deed of trust and Not by authority of state law. It follows that appellant's contention that state action was present on the theory that the power of sale exercised by the trustee was conferred by state statute is overruled." (Emphasis added).

Whether the foreclosure was pursuant to the Contractual provisions in the deed of trust was by authority of state law is irrelevant in this case where federal instrumentalities like CITIBANK and CITIMORTAGE are involved because foreclosure had to be pursuant to the authority of the laws of the United States. The Missouri Supreme Court relied upon the reasoning and result in Bryant v. Jefferson Fed. Sav. & Loan Assoc., 166 U.S.App.D.C. 178, 509 F.2d 511 (D.C.Cir. 1974). After the Warren decision, similar results were reached in cases involving extrajudicial foreclosures, MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF SUMMARY JUDGMENT

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Charmicor, Inc. v. Deaner, 572 F.2d 694 (9th Cir. 1978); Northrip v. FNMA, 527 F.2d 23 (6th Cir. 1975); Apao v. San Diego Home Loans, Inc.,324 F3d 1091, Ninth Circuit (2002). The fact that there was a provision in the contract is not dispositive. As in Fuentes, the fact that there is a power of sale provision did not amount to a waiver of the appellants' procedural due process rights, those provisions neither dispensing with a prior hearing nor indicating the procedure by which repossession was to be achieved. In Johnson v United States Department of Agriculture, 734 F. 2d 774(11th cir., 1984) the court examined the validity of a power of sale clause when the court said: Due process rights may be waived, D.H. Overmyer Co. v. Frick Co., 405 U.S. 174, 185, 92 S.Ct. 775, 782, 31 L.Ed.2d 124 (1972), although there is a strong presumption against waiver. Gonzalez v. County of Hidalgo, 489 F.2d 1043, 1046 (5th Cir.1973). Waiver depends upon the facts of a particular case, United States v. Wynn, 528 F.2d 1048, 1050 (5th Cir.1976), and is good only if it is done in an informed manner. Overmyer, supra 405 U.S. at 186-87

Have we created a situation where federal instrumentalities CAN put a power of sale provision in a mortgage contract that subjects homeowners to either no hearing, or an inadequate hearing such as a rule 120 of the Colorado Foreclosure Law and also evade its most solemn obligations under the Constitution? Such would not be acceptable to the court in Lebron. The Supreme Court Cases of Osborn v Bank of United States, 22 U.S.738 (1824), Shoshone Mining Co. v. Rutter, 177 U.S. 505, & in Runyan v. Lessee of Coster, 39 U .S. 122 , p. 129 (1840) clearly stated that whatever the corporation assumed to do including rights in contract must be authorized by a law of the United States. The appellate courts in the power of sale foreclosure cases embraced each others decisions without making reference to several Supreme Court decisions which examined the nature of corporations created by an act of Congress concluding that their activities were governmental, and were content with the notion that Congress could adopt local customs on debtor creditor relations without further analysis when the issue should be decided under federal law. MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF SUMMARY JUDGMENT Page 7

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C. NATIONAL BANKS LIKE CITIBANK ARE PUBLIC NOT PRIVATE CORPORATIONS In Easton v. Iowa,188 U.S.220 (1903) the Court said of national banks: We think that this view of the subject is not based on a correct conception of the federal legislation creating and regulating national banks. That legislation has in view the erection of a system extending throughout the country, and independent, so far as powers conferred are concerned, of state legislation which, if permitted to be applicable, might impose limitations and restrictions as various and as numerous as the states. Having due regard to the national character and purposes of that system, we cannot concur in the suggestion that national banks, in respect to the powers conferred upon them, are to be viewed as solely organized and operated for private gain. [B,U added] The Court in Easton went on to say at p. 230 that the principles enunciated in McCullough v Maryland, 17 U.S. 316(1819), and in Osborn v Bank of United States, 22 U.S.738 (1824), though expressed in respect to banks incorporated directly by acts of Congress, were still applicable to the later and present system of national banks. The Court cited with approval the holding of the latter as expressed by Chief Justice Marshall: The bank is not considered as a private corporation whose principal object is individual trade and individual profit, but as a public corporation created for public and national purposes. That the mere business of banking is, in its own nature, a private business, and may be carried on by individuals or companies having no political connection with the government, is admitted, but the bank is not such an individual or company. It was not created for its own sake or for private purposes. It has never been supposed that Congress could create such a corporation.[bold, underline & italics added] The court in Easton goes on to say: 'National banks are instrumentalities of the Federal government, created for a public purpose, and as such necessarily subject to the paramount authority of the United States. It follows that an attempt by a state to define their duties or control the conduct of their affairs is absolutely void, wherever such attempted MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF SUMMARY JUDGMENT Page 8

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exercise of authority expressly conflicts with the laws of the United States, and .impairs the efficiency of these agencies of the Federal government Our conclusions, upon principle and authority, are that Congress, having power to create a system of national banks, is the judge as to the extent of the powers which should be conferred upon such banks, and has the sole power to regulate and control the exercise of their operations[B, I,U added] In view of the holding in Osborn which Justice Marshall held that banks were public and not private bank corporations because they were created for public and national purposes , which was approved and held applicable to later national bank corporations not directly created by Congress by the Supreme Court in Easton, why should we now consider national banks private corporations? And why not consider them agencies of the Federal government as referred to in Easton as well as to FEDERAL SAVINGS ASSOCIATIONS . Certainly the court in In Acron Investments, Inc. would have considered CITIBANK and by extension CITIMORTGAGE an agency of the federal government because, as the court held in that case, control of the government over the corporations was more than custodial or incidental. Acron Investments, Inc. et al v Federal Savings and Loan Insurance Corporation , 363 F.2nd 236 (9th Circuit, 1966) In Osborn at p. 22 U.S. 823 the court said of these national banks: The charter of incorporation not only creates it, but gives it Every faculty which it possesses. The power to acquire rights of any description, to transact business of any description, to sue on those contracts, is given and measured by its charter, and that charter is a law of the United States. Take the case of a contract, which is put as the strongest against the Bank. . . [H]as this being a right to make this particular contract? .. . .[T]his question, too, depends entirely on a law of the United States [U added]

The court in Osborn at p. 823, made it clear that federally chartered corporations created under acts of Congress could . . .acquire no right, make no contract, bring no suit, which is not authorized by a law of the United States. It is not only itself the mere creature of law, but all its actions and all its rights are dependent on the same law. In an excerpt from Shoshone Mining Co. v. Rutter, 177 U.S. 505,509,510 ,citing Osborn, the court said: MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF SUMMARY JUDGMENT

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A corporation has no powers and can incur no obligations except as authorized or provided for in its charter. Its power to do any act which it assumes to do, and its liability to any obligation which is sought to be cast upon it, depend upon its charter, and when such charter is given by one of the laws of the United States there is the primary question of the extent and meaning of that law[B,U added]

In Runyan v. Lessee of Coster, 39 U .S. 122 , p. 129 (1840) the court Said: [T]hat a corporation possesses only those properties which the charter of its creation confers upon it, either expressly, or as incidental to its very existence. That corporations created by statute must depend for their powers and the mode of exercising them, upon the true construction of the statute. The corporation must show that the law of its creation gave it authority to make such contracts[B,U added] Did the law of its creation, the NATIONAL BANK ACT, give CITIBANK & CITIMORTGAGE the right to make this contract with a power of sale provision? Can it then be said that the provision in a mortgage contract requiring a mortgagor to transfer his rights to a trustee with a power of sale for the non-payment of a mortgage is authorized by the federal charter and the law that created that charter? Is this not the right to foreclose on an owner without resort to judicial process or a meaningful hearing? Is this not the right to deprive a person of procedural due process? We must then ask the question: Is the act of the national or federal savings associations in foreclosing non-judicially within the scope of a law of Congress? Can the government by way of a federal charter authorize a right to a bank to do what it is forbidden to do itself? It is fundamentally clear that the government can impart no greater power through a charter than they possess themselves. The power to deny a person of procedural due process is denied to the government under the 5th Amendment and is equally denied to the banks. As John Locke said nearly 300 years ago: Nobody can transfer to another more power than he has in himself [ TWO TREATISE OF GOVERNMENT, BOOK II]

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The courts in Osborn, Shoshone and Runyan show us that the conduct of banks in pursuit of non-judicial foreclosures must be done under the authority of the federal charter which is a law of the United States and therefore under color of federal law. Thus National banks and federal savings associations could be considered governmental actors like the assumption made by the First Circuit in Gerena v Puerto Rico Legal Services, Inc., 697 F. 2d 447(1st Cir. 1983) Congress can delegate powers but it must be powers that they can exercise themselves. Thus, in United States v Grimaud, 220 U.S. 506 (1911) the Supreme Ct citing Justice Marshall at pg. 517 said. It will not be contended that Congress can delegate to the courts, or to any other tribunals, powers which are strictly and exclusively legislative. But Congress may certainly delegate to others powers which the legislature may rightfully exercise itself. [B, I,U added]

D. THE LENDING FUNCTIONS OF NATIONAL BANKS AND FEDERAL SAVINGS ASSOCIATIONS ARE GOVERNMENTAL AND NOT PROPRIETARY In Federal Land Bank v. Bismarck Co. of St. Paul, 314 U. S. 95 (1941) the issue was whether the lending functions were proprietary or governmental. The court said: The argument that the lending functions of the federal land banks are proprietary, rather than governmental, misconceives the nature of the federal government with respect to every function which it performs. The federal government is one of delegated powers, and from that it necessarily follows that any constitutional exercise of its delegated powers is governmental. Graves v. New York ex rel. O'Keefe, 306 U. S. 466, 306 U. S. 477. It also follows that, when Congress constitutionally creates a corporation through which the federal government lawfully acts, the activities of such corporation are governmental. (cites) As part of their general lending functions, the land banks are authorized to foreclose their mortgages and to purchase the real estate at the resulting sale. They are "instrumentalities of the federal government, engaged in the performance of an important governmental function."(cites)

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Like federal land banks, the lending functions including foreclosures of federal savings assns/federal savings banks, and National banks as federal instrumentalities, are no less governmental than the land banks in Bismarck. It is well settled that the enabling Act, Home Owner Loan Act (HOLA) is constitutional. Pittman v. Home Owners' Loan Corp., 308 U. S. 21. In Pittman, the court said: that the activities of the Corporation through which the national government lawfully acts must be regarded as governmental functions, and as entitled to whatever immunity attaches to those functions when performed by the government itself through its departments. (cite) [B added]

E. CITIBANK & CITIMORTGAGE ARE FEDERAL INSTRUMENTALITIES FOR THE PURPOSE OF ATTACHING THE CONSTITUTIONAL OBLIGATIONS UNDER THE 5TH AMENDMENT Can the government divest itself of its identity with a corporation created and participated in for a public purpose sufficiently to allow the corporation to use a procedure that does not allow procedural due process? That question was asked, and answered in Lebron v National Railroad Passenger Corporation. 513 U.S. pgs 374, 375, when the court clarified and expanded the definition of federal actor. The court said: c) There is a long history of corporations created and participated in by the United States for the achievement of governmental objectives. Like some other Government corporations, Amtrak's authorizing statute provides that it "will not be an agency or establishment of the United States Government," (d) Although 541 is assuredly dispositive of Amtrak's governmental status for purposes of matters within Congress's control--e. g., whether it is subject to statutes like the Administrative Procedure Act-and can even suffice to deprive it of all those inherent governmental powers and immunities that Congress has the power to eliminate-e. g., sovereign immunity from suit-it is MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF SUMMARY JUDGMENT Page 12

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not for Congress to make the final determination of Amtrak's status as a Government entity for purposes of determining the constitutional rights of citizens affected by its actions. The Constitution constrains governmental action by whatever instruments or in whatever modes that action may be taken (e) Amtrak is an agency or instrumentality of the United States for the purpose of individual rights guaranteed against the Government by the Constitution. This conclusion accords with the public, judicial, and congressional understanding over the years that Government-created and -controlled corporations are part of the Government itself.(cites) ; A contrary holding would allow the government to evade its most solemn constitutional obligations by simply resorting to the corporate form, (cites[B, I,U added] Like Amtrak, national banks including CITIBANK and its operating subsidiary CITIMORTGAGE, as well as federal savings associations are federal instrumentalities. The banks are members in banking systems created to advance the governments economic public goals, and controlled through the directors of The Comptroller of the Currency and The Office of Thrift Supervision respectively. Like Amtrak it is not for Congress to make the final determination of the status of these corporations as government entities for purposes of determining the constitutional rights of citizens affected by its actions. Homeowners are citizens whose constitutional rights are affected when non- judicial foreclosures are exercised by federally chartered corporations like National banks and federal savings associations . To paraphrase an old saying, that with great power comes great obligations. This is no less true when Congress confers enumerated and incidental powers on a corporation it creates for an important governmental function. It must follow that with the immunities from taxation and state laws that frustrate the activities of corporations for which acts of Congress were enacted preempting state laws, the constitutional obligations of the government must also attach. For as Justice Scalia said in Lebron, at p. 399: But it does not contradict those statements to hold that a corporation is an agency of the Government for purposes of the constitutional obligations of Government rather than the "privileges of the government," when the State has specifically created that corporation for the furtherance of governmental objectives, and not merely holds some shares but controls the operation of the corporation through its appointees. MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF SUMMARY JUDGMENT

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In Lebron, respondent also invoked the courts decision in the Regional Rail Reorganization Act Cases, 419 U. S. 102 (1974), which found the Consolidated Rail Corporation, or Conrail, not to be a federal instrumentality, despite the President's power to appoint, directly or indirectly, 8 of its 15 directors. See id., at 152, n. 40; Regional Rail Reorganization Act of 1973, 301, 87 Stat. 1004. But the court specifically observed in that case, that the directors were placed on the board to protect the United States' interest "in assuring payment of the obligations guaranteed by the United States," and that "[f]ull voting control ... will shift to the shareholders if federal obligations fall below 50% of Conrail's indebtedness." 419 U. S. , at 152. Moreover, we noted, "[t]he responsibilities of the federal directors are not different from those of the other directors to operate Conrail at a profit for the benefit of its shareholders," ibid.-which contrasts with the public interest "goals" set forth in Amtrak's charter, see 45 U. S. C. 501a. Amtrak is worlds apart from Conrail: The Government exerts its control not as a creditor but as a policymaker, and no provision exists that will automatically terminate control upon termination of a temporary financial interest.

In distinguishing Amtrak from Conrail for the purpose of determining that Amtrak was a federal instrumentality subject to constitutional constraints, the court focused on the control of the corporation by the government, the public interest goals of the corporation, that no provision existed that would automatically terminate the governments control upon termination of a temporary financial interest, and the fact that in Amtrak the role of the government was as a policymaker and not as a creditor as in Conrail. The elements which led the court in Lebron to attach the constitutional obligations of the 1st amendment to the corporation can also be attributed against CITIBANK and CITIMORTGAGE in attaching its 5th amendment obligation to this case because defendants are federal instrumentalities created for public and national purposes in carrying out the governments public economic goals as mandated by its authority under the Commerce Clause and implemented through the Necessary and Proper Clause. Thus the governments control through the regulatory agencies is as a policymaker where control would never terminate upon any term certain. Control of the operations is MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF SUMMARY JUDGMENT

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exercised by the directors of the Office of the Comptroller of Currency and the Office of Thrift Supervision respectively, independent federal regulatory agencies vested with plenary authority to administer the National Bank Act of 1864 (NBA) and the Home Owners' Loan Act of 1933 (HOLA). The Director of the Comptroller of the Currency is appointed by the President, by and with the advice and consent of the senate.(12 USC 2) The Director of the OTS is appointed by the President, by and with the advice and consent of the senate. (12 USC 1462c) The Court in Easton explains the governments control when the court said: Our conclusions, upon principle and authority, are that Congress, having power to create a system of national banks, is the judge as to the extent of the powers which should be conferred upon such banks, and has the sole power to regulate and control the exercise of their operations. In federal savings associations the government control is clarified in Fidelity Fed. S. & L. v. De la Cuesta, 458 U.S. 141 (1982) at p. 161 when the court said: The broad language of 5(a) expresses no limits on the Board's authority to regulate the lending practices of federal savings and loans. As one court put it, "[I]t would have been difficult for Congress to give the Bank Board a broader mandate." [cites] And Congress' explicit delegation of jurisdiction over the "operation" of these institutions must empower the Board to issue regulations governing mortgage loan instruments. [B,I, U added]

F.

THE COLORADO FORECLOSURE LAW VIOLATES PLAINTIFFS DUE PROCESS AND EQUAL PROTECTION RIGHTS Under color of state lawThe Colorado Foreclosure Law, plaintiffs were foreclosed.

The Foreclosure law provides for a Public Trustee who is an agent of the state administering a process that provides inadequate due process to homeowners. In doing so the state has so far insinuated itself into a position of interdependence with the private entity that it must be recognized as a joint participant in the challenged activity which is a joint action between the state of Colorado and CitiMortgage. Foreclosure of a deed of trust by public trustee's sale under MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF SUMMARY JUDGMENT

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the applicable statutes is activated by a power of sale in the deed of trust. Plaintiffs were subjected to a rule 120 hearing limited to two issues: the debtor is in default and, action collateral to such hearing is necessary to resolve all other issues. Ragsdale Bros. Roofing v. United Bank, 744 P.2d 750 (Colo. App. 1987); In re Carpenter, 200 Bankr. 47 (D. Colo. 1996).
a.

b. To establish the status of the debtor with respect to military service. Hastings v. Security Thrift & Mtg. Co., 145 Colo. 36, 357 P.2d 919 (1960).

Borrowers who raise arguments that the Rule 120 hearing won't address, can file a separate civil case. But those who go that route are quickly hamstrung by a requirement to post a "supersedeas" bond in the amount of 125% of the mortgage debt, where national banks are exempt from posting such bonds on appeal under the National Bank Act.(12 U.S.C. 91) A Public Trustee is appointed by the Governor to serve in every county of the State of Colorado. The Trustee is not required to be an attorney. Under rule 120 hearing (a non-judicial hearing) there can be no appeal, nor a right to a jury trial. The homeowner has no right to raise affirmative defenses. Standing is presumed in favor of the lender upon averments by the lender or its attorney that the lender is a real party in interest. In 1989 the Colorado Supreme Court passed ruled that a party seeking to exercise a particular legal remedy must have standing which means that the party must OWN the legal right to exercise a particular claim. Goodwin v. District Court, 779 P.2d 837 (Colo. 1989) But, judges routinely accept less than certifiable proof to determine who is the real party in interest. A copy of the original deed of trust and certificate of qualified holder which is a form generated by the lenders attorney is all that lenders flash for the courts to determine. No notarized assignment from one lender to another is required as proof. In LINDSEY V. NORMET, 405 U. S. 56 (1972) the court said: MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF SUMMARY JUDGMENT

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This Court has recognized that, if a full and fair trial on the merits is provided, the Due Process Clause of the Fourteenth Amendment does not require a State to provide appellate review, (cites) Conversely, if a full and fair trial on the merits is NOT provided, the Due Process Clause of the Fourteenth Amendment requires a State to provide appellate review. A rule 120 hearing does not provide a full and fair hearing, nor does it provide appellate review. The state can deny one or the other but cannot deny both. In Jean C. Rosenfield vs HSBC Bank, USA & Stephanie Y. Omalley, Civil Action No. 10-cv-00058-MSK-MEH the court held: A Rule 120 proceeding is not the equivalent of a civil lawsuit. It is not adversarial in nature; its orders are not final or appealable; the notice procedures require only service by mail, nor formal process; its inquiry is constrained to an extremely narrow issue; the standard of proof required is nothing more than a reasonable probability; and the rule expressly reserves the rights of parties to litigate the same issues (and others) in any other proceeding. Plymouth Capital, 955 P.2d at 1016; C.R.C.P. 120(d); United Guar. Resid. Ins. Co. v. Vanderlaan, 819 P.2d 1103, 1105 (Colo. App. 1991). Moreover, the findings of the Rule 120 court are not entitled to preclusive effect.Vanderlaan, id. Thus, even if the Rule 120 court had entertained the Plaintiffs defense of Rescission, nothing that court found with regard to that issue would have finally and conclusively resolved the parties rights on that question, and further litigation in a traditional lawsuit would have been necessary to obtain an actual adjudication of the parties rights. Thus, one can hardly say that raising an issue in a proceeding that is non-final and non-preclusive is the equivalent of asserting a claim premised upon that issue so as to halt the running of the statute of limitations.[B, U]

The due process problem arises when the bank claims it is a qualified holder of an evidence of debt pursuant to C.R.S 38-38-101. If the foreclosing party is a qualified holder (bank, financial institution, or public company), it may file a copy or the evidence without proper indorsement or assignment, and the indorsement or assignment is deemed proper. C.R.S. 38-38-101(6)(b). The qualified holder is also deemed to indemnify the homeowner in the event another party later steps forward and asserts that it owns the debt: MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF SUMMARY JUDGMENT Page 17

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Foreclosure by qualified holder without original evidence of debt, original or certified copy of deed of trust, or proper indorsement. (a) A qualified holder, whether acting for itself or as agent, nominee, or trustee under section 38-38-100.3(20)(j), that elects to foreclose without the original evidence of debt pursuant to subparagraph (II) of paragraph (b) of subsection (1) of this section, or without the original recorded deed of trust or a certified copy thereof pursuant to subparagraph (II) of paragraph (c) of subsection (1) of this section, or without the proper indorsement or assignment of an evidence of debt under paragraph (b) of subsection (1) of this section shall, by operation of law, be deemed to have agreed to indemnify and defend any person liable for repayment of any portion of the original evidence of debt in the event that the original evidence of debt is presented for payment to the extent of any amount, other than the amount of a deficiency remaining under the evidence of debt after deducting the amount bid at sale, and any person who sustains a loss due to any title defect that results from reliance upon a sale at which the original evidence of debt was not presented. The indemnity granted by this subsection (2) shall be limited to actual economic loss suffered together with any court costs and reasonable attorney fees and costs incurred in defending a claim brought as a direct and proximate cause of the failure to produce the original evidence of debt, but such indemnity shall not include, and no claimant shall be entitled to, any special, incidental, consequential, reliance, expectation, or punitive damages of any kind. A qualified holder acting as agent, nominee, or trustee shall be liable for the indemnity pursuant to this subsection (2). Colo. Rev. Stat. Ann. 38-38-101(2). But for the power of sale provision in the mortgage contract, plaintiffs would have the benefits of a full trial on the merits in a court of competent jurisdiction with the right to raise affirmative defenses as well as the right to a jury trial. Plaintiffs would be allowed discovery as well as the right to cross examine witnesses and a right to appeal. As a procedure that denied plaintiffs due process, the rule 120 order of foreclosure would be void. Eckel v. MacNeal, 628 N.E.2d 741 (Ill. App.Dist. 1993)

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In LINDSEY V. NORMET, 405 U. S. 56 (1972) the court held that the posting of a double bond violated the Equal Protection Clause. The court said: . The double bond prerequisite for appealing an FED action does violate the Equal Protection Clause, as it arbitrarily discriminates against tenant wishing to appeal from adverse FED decisions. It heavily burdens the statutory right of an FED defendant to appeal, and is not necessary to effectuate the State's purpose of preserving the property at issue. Pp. 405 U. S. 74-79. Like the bond requisite in Lindsey, which was held discriminatory against a tenant wishing to appeal from adverse FED decisions, the requirement of a supersedeas bond is also discriminatory[cr civil procedure 62(d)]; and Colorado Rule Change 2005 (13)CC Rules of Civil Procedure Chapter 1, (3) Bond Amount] which states: Supersedeas Bonds. Unless the court otherwise orders, or any applicable statute directs a higher amount, the amount of a supersedeas bond to stay execution of a money judgment shall be 125% of the total amount of the judgment entered by the court (including any prejudgment interest, costs and attorneys fees awarded by the court). The amount of a supersedeas bond to stay execution of a non-money judgment shall be determined by the court.[B,U added]

Thus the bond requirement in order to file a stay for the homeowner to stay in his home while pursuing a collateral action should be declared a violation of the Equal Protection Clause.
G.

EVICTION DUE TO A POWER OF SALE FORCLOSURE IS A MALICIOUS

ABUSE OF PROCESS AND A DENIAL OF PROCEDURAL DUE PROCESS ACTIONABLE FOR DAMAGES UNDER 42 US 1983.

After wresting the right of title from plaintiffs through the power of sale foreclosure CITIBANK, acting through its subsidiary CITIMORTGAGE filed an FED action to wrest the right of possession. The eviction should be viewed against the backdrop of the power of sale foreclosure. If the power of sale foreclosure was a 14th Amendment and/or a 5th Amendment violation (a Bivens claim) then it follows that the eviction as a derivative action to the nonMEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF SUMMARY JUDGMENT Page 19

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judicial foreclosure is a malicious abuse of process and by definition a denial of procedural due process and the final step under color of state law in furtherance of the deprivation by CITIBANK and its subsidiary CITIMORTGAGE begun by the power of sale foreclosure. Jennings vs. Shuman, 567 F.2d 1213 (3rd). Two events but one transaction to complete the deprivation of due process. Thus, an action for damages under 42 US 1983 lies as a remedy to plaintiffs who has been deprived of due process under color of state law. H. CITIBANK IS LIABLE FOR THE ACTS OF ITS SUBSIDIARY CITIMORTGAGE is an operating subsidiary of CITIBANK. As an operating subsidiary the OCC has treated operating subsidiaries as an incorporated division or department of the parent bank. On January 16th, 2003, Julie I. Williams, First Senior Deputy Comptroller and Chief Counsel, issued an interpretive letter(#971) stating the OCCs position: Because the activities of an operating subsidiary are limited to activities in which the parent bank could engage directly, an operating subsidiary is in practice a separately incorporated division or department of the parent bank Exhibit 1, OCCS Interpretive letter #971) [B added]

Being a separately incorporated division or department of the parent bank is inconsistent with CITIMORTGAGE being a separate entity from its parent corporation CITIBANK. CITIMORTGAGE is in effect an instrumentality of CITIBANK by which CITIBANK conducts the business of banking. 24(SEVENTH) (See also Watters 05-1342 at p. 15, when the court said: For the past four decades operating subsidiaries have emerged as important instrumentalities of national banks) The regulations 12 cfr 5.34 et seq. shows the close relationship of the two entities. (c) Scope. This section sets forth authorized activities and application or notice procedures for national banks engaging in activities through an operating subsidiary.

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(e) Standards and requirements (1) Authorized activities. A national bank may conduct in an operating subsidiary activities that are permissible for a national bank to engage in directly either as part of, or incidental to, the business of banking, as determined by the OCC. (A) The bank has the ability to control the management and operations of the subsidiary

(B) The parent bank owns and controls more than 50 percent of the voting (or similar type of controlling) interest of the operating subsidiary, or the parent bank otherwise controls the operating subsidiary and no other party controls more than 50 percent of the voting (or similar type of controlling) interest of the operating subsidiary; and (C) The operating subsidiary is consolidated with the bank under Generally Accepted Accounting Principles (GAAP).

( 3 ) The bank ( i ) Has the ability to control the management and operations of the subsidiary by holding voting interests sufficient to select the number of directors needed to control the subsidiary's board and to select and terminate senior management. [B,I,U] Thus, the regulations blur the distinction between CITIMORTAGE and its parent. A handful of courts have imposed liability on the parent corporation on the parents ability to control its subsidiary. Thus in Idaho V. Bunker Hill, 647 F. Supp. 1064, 1068. (D.Id.1986) and U.S. V. Nicolet, 857 F.2d 202 federal district courts found that while employees of the parent companies did not actually exercise control over hazardous waste activities, the parent corporations were familiar with the practices and had power to control both the disposal and resulting release of the hazardous substances as well as the ability to abate the contamination. The United States Court of Appeals for the Eleventh Circuit ruled that degree of control required to impose operator liability on a parent depended on whether the parent was involved in the same business as the subsidiary. Jacksonville Electric Authority v. Bernuth Corp , 996 F.2d 1107 (11th Cir.1993). Even though CITIBANK didnt foreclose on plaintiffs directly, CITIBANK was familiar with the practice and had the ability to constrain the practice of foreclosure by CITIMORTGAGE and was engaged in the same business.

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V.

CONCLUSION

The issue called upon for the court to determine is whether federal instrumentalities, like
CITIBANK and CITIMORTGAGE, could put a provision in a mortgage contract which could

subject a homeowner to either no hearing as in California, or if a hearing like rule 120 in Colorado which does not allow a full and fair hearing nor a right to appeal. It is clear from Supreme Court decisions that a law of the United States has to authorize what they did, and the acts of the banks cannot be sanctioned where the government cannot exercise the right themselves and where procedural due process cannot be provided. The power of sale provision not only acts as a waiver of a homeowners rights but as a means to evade the governments obligations under the Constitution. A proposition that the court found repugnant in Lebron. The rationale in Lebron which held Amtrak to the same proscriptive requirements as that of the government for the purpose of a 1st amendment violation is present in this case with respect to a 5th amendment violation by defendants CITIBANK and CITIMORTGAGE as federal instrumentalities created for public and national purposesthe advancement of the government economic goals under the mandate of the Commerce Clause. Control by the government is as a policymaker where control will never shift upon any term certain. The fact that a provision is put in the mortgage contract should not be used to validate its own existence for such a right is subject to the authority of the National Bank Act and by implication the Constitution of the United States for its very existence. For as the court in Runyan said: the corporation must show that the law of its creation gave it authority to make such a contract. The Colorado Foreclosure law which allows the use of Public Trustees demonstrates a significant participation on the part of the state in the non-judicial foreclosure process. Thus State action is clearly present. Measured against the Colorado unlawful detainer, rule 120 hearing is but a shadow of the rights due citizens when such substantive rights of property are involved. It thus follows that Plaintiffs eviction pursuant to the power of sale foreclosure was a malicious abuse of process and by definition a denial of procedural due process., Jennings, supra MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF SUMMARY JUDGMENT

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The subject corporations cited share a common heritage with CITIBANK. They are corporations federally chartered and created under acts of Congress for important public and national purposes for which the Supreme Court has ruled on that premise in a number of cases that their activities were governmental. Thus in Bismarck the Court ruled that the lending functions were governmental not proprietary; and that foreclosure was part of the general lending functions. In Lebron, the Court ruled that the corporation was part of the government for the purpose of determining its constitutional obligations toward the rights of citizens affected by its actions. The decision in Bismarck and Pittman which rested on the fact that the activities of the corporation were governmental for the purpose of protecting the corporations privileges and wereentitled to whatever immunity attaches to those functions when performed by the government itself through its departments was equally applied in Lebron to the corporations constitutional obligations when it affected the rights of its citizens as if it were when performed by the government itself through its departments. The settled principles enunciated by these Supreme Court cases which are now established under the doctrine of stare decisis lead to one conclusion--- that National banks like CITIBANK acting through its subsidiary CITIMORTGAGE and federal savings associations use of a power of sale foreclosures must be governmental acts and a 5th amendment violation of due process. Add a state Public Trustee to the 120 hearing to the equation and a violation under color of state law breeds a 14th Amendment claim under 42 US 1983. Traditionally, it is the national governments exclusive role to promote the economic health of the nation through the Commerce Clause. It does so by creating instrumentalities like national banks giving them the powers to advance the public economic goals. Thus CITIBANK as a national bank, and CITIMORTGAGE are performing a public function. The use of a public Trustee to foreclosures in a rule 120 hearing by these lenders is a clearly joint action. Thus the public function and the joint action is sufficient to subject the challenged activity to constitutional limitations. Lynne Huxtable & Jeffrey A. Agnew v. Timothy F. Geithner, et al., Case No. 09cv1846 BTM(NLS). MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF SUMMARY JUDGMENT

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Clearly CITIBANK is liable for the acts of its subsidiary CITIMORTGAGE which is as the OCC has determined an incorporated division or department of the parent bank. Plaintiffs were subjected to a rule 120 hearing which was less than a full and fair hearing on the merits without a right to appeal and a supersedeas bond requirement too burdensome and impossible to obtain. Thus, even under Lindsey would qualify as a denial of due process, and the Equal Protection Clause. The order of foreclosure should be considered void. Constitutional powers conferred on a corporation should not be used to produce an unconstitutional result. As was written in FIRST NATIONAL BANK OF BAY CITY V. FELLOWS, 244 U. S. 416 (1917) when the court said at pgs 419, 420: "We admit, as all must admit, that the powers of the government are limited, and that its limits are not to be transcended., with respect to the means by which the powers it confers are to be carried into execution, which will enable that body to perform the high duties assigned to it in the manner most beneficial to the people. Let the end be legitimate, let it be within the scope of the Constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the Constitution, are constitutional. [B,I]

The right to procedural due process in a mortgage contract cannot be waived; otherwise the government would be allowed to evade its most solemn obligation under the Constitution. Respectfully submitted,

___________________ MASON L. RAMSEY _________________ Judith Mae Neville

Date:___________, 2011

Date:___________, 2011

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Cases

Apao v. San Diego Home Loans, Inc.,324 F3d 1091, Ninth Circuit (2002)........1, 5 Bank of America et al v City of San Francisco et al 309 F.3d 551 (Ninth Circuit) (2002)......................................................................................................................1 Bryant v. Jefferson Fed. Sav. & Loan Assoc., 166 U.S.App.D.C. 178, 509 F.2d 511.......................................................................................................................1, 5
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Bunker Hill, 647 F. Supp. 1064, 1068. (D.Id.1986)..............................................18 Charmicor, Inc. v. Deaner, 572 F.2d 694 (9th Cir. 1978);..................................1, 5 Conference of Federal Savings and Loan Associations et al v. Alan L. Stein et al. 604 F.2d 1256 (9th Circuit) (1979)...................................................................1 Easton v. Iowa,188 U.S.220 (1903)..........................................................................6 Federal Land Bank v. Bismarck Co. of St. Paul, 314 U. S. 95 (1941)...................9 Federal National Mortgage Association v. Howlett, 521 S.W.2d 428 (Mo. en banc 1975).......................................................................................................................5 Fidelity Fed. S. & L. v. De la Cuesta, 458 U.S. 141 (1982................................1, 13 FIRST NATIONAL BANK OF BAY CITY V. FELLOWS, 244 U. S. 416.........1 Fuentes v. Shevin, 407 U.S. 67 (1972).................................................................1, 4 Gerena v Puerto Rico Legal Services, Inc., 697 F. 2d 447(1st Cir. 1983)...............9 Goodwin v. District Court, 779 P.2d 837 (Colo. 1989)............................................1 In Acron Investments, Inc. et al v Federal Savings and Loan Insurance Corporation , 363 F.2nd 236 (9th Circuit, 1966)......................................................7 Jennings vs Shuman, 567 F.2d 1213 (3rd).............................................................16 Johnson v. United States Department of Agriculture, 734 F.2d 774(11th circuit, 1984).......................................................................................................................5 LINDSEY V. NORMET, 405 U. S. 56 (1972)........................................................15 McCullough v Maryland, 17 U.S. 316(1819),.........................................................7 M'Culloch v. Maryland, 17 U.S. (4 Wheat.) 316, 325-26, 426-27, 4 L.Ed. 579 (1819),.....................................................................................................................1 National Banks and the Dual Banking System(2003)...............................................4 Northrip v. FNMA, 527 F.2d 23 (6th Cir. 1975)...................................................1, 5 Osborn v Bank of United States, 22 U.S.738 (1824)...........................................1, 6 Pittman v. Home Owners' Loan Corp., 308 U. S. 21........................................1, 10 Regional Rail Reorganization Act Cases, 419 U. S. 102 (1974)...........................12
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Regional Rail Reorganization Act of 1973, 301, 87 Stat. 1004.......................5, 12 Runyan v. Lessee of Coster, 39 U .S. 122 , p. 129 (1840).......................................6 Shoshone Mining Co. v. Rutter, 177 U.S. 505.........................................................6 United States v Grimaud, 220 U.S. 506 (1911).1,9 v. Bernuth Corp , 996 F.2d 1107 (11th Cir.1993)..................................................18 V. Bunker Hill, 647 F. Supp. 1064, 1068. (D.Id.1986).........................................18 Warren v. GNMA, 521 S.W.2d 441 (Mo. en banc 197........................................1, 5 Watters v Wachovia 292 U. S. 559...................................................................1, 2, 3
Statutes

42 US 1983................................................................................................................2 Home Owners' Loan Act of 1933..............................................................................1 National Bank Act...................................................................................................13 The Colorado Foreclosure Law........................................................................1, 13 The Home Owners' Loan Act of 1933.......................................................................1
Other Authorities

, OCCS Interpretive letter #971.........................................................................17 National Banks and the Dual Banking System(2003) p. 3........................................4
Rules

24(SEVENTH..........................................................................................................17 Easton v. Iowa,188 U.S.220 (1903).................................................................passim F.R.C.P. 12 (b)(6)......................................................................................................1 Fuentes v. Shevin, 407 U.S. 67 (1972)..................................................................4, 5 rule 120 hearing.........................................................................................................2 v........................................................................................................................passim
Constitutional Provisions

14th Amendment.......................................................................................................16
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5TH AMENDMENT..................................................................................................1

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