ILNews

Judges find mortgage company not culpably negligent

Back to TopCommentsE-mailPrintBookmark and Share

In a dispute over which mortgage has priority in a foreclosure action, the Indiana Court of Appeals affirmed summary judgment for the senior mortgage holder. The judges found the doctrine of equitable subrogation applies.

Ronnie and Debora Brand obtained a mortgage for more than $107,000 with Meridian Group Mortgage Corp. and a second mortgage for a $25,000 home equity line of credit with Finance Center Federal Credit Union in 2002. The Brands later refinanced with First Republic Mortgage Corp., which paid off both Meridian Group and Finance Center. The First Republic mortgage was later assigned to GMAC Mortgage.

Finance Center never released the mortgage because the Brands did not send notice requesting release of the lien. The line of credit was left open and the company later advanced more money to the Brands. When GMAC attempted to foreclose on the real estate, Finance Center argued that its mortgage should be first in priority.

Both companies filed for summary judgment, and the trial court granted partial summary judgment to GMAC, finding it should have priority and Finance Center would be the junior lienholder.

Finance Center argued that GMAC isn’t entitled to first lien pursuant to the doctrine of equitable subrogation because GMAC was culpably negligent by not obtaining a release of the Finance Center mortgage. The appellate court cited JPMorgan Chase Bank v. Howell, 883 N.E.2d 106 (Ind. Ct. App. 2007), a case involving a similar dispute in which the judges found no culpable negligence in the refinancing lender’s failure to ensure that it had properly paid off the junior line of credit.

Any negligence in GMAC’s failure didn’t prejudice Finance Center because the Finance Center mortgage was always junior to the senior Meridian Group mortgage, which was fully satisfied with the loan proceeds from the GMAC refinancing, wrote Judge Nancy Vaidik in Finance Center Federal Credit Union v. Ronnie D. Brand, Debora J. Brand and GMAC Mortgage, LLC, No. 49A02-1111-MF-1089. Allowing GMAC to step into the shoes of the Meridian Group mortgage will leave Finance Center in the same junior position.

 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. I was looking through some of your blog posts on this internet site and I conceive this web site is rattling informative ! Keep on posting . dfkcfdkdgbekdffe

  2. Don't believe me, listen to Pacino: https://www.youtube.com/watch?v=z6bC9w9cH-M

  3. Law school is social control the goal to produce a social product. As such it began after the Revolution and has nearly ruined us to this day: "“Scarcely any political question arises in the United States which is not resolved, sooner or later, into a judicial question. Hence all parties are obliged to borrow, in their daily controversies, the ideas, and even the language, peculiar to judicial proceedings. As most public men [i.e., politicians] are, or have been, legal practitioners, they introduce the customs and technicalities of their profession into the management of public affairs. The jury extends this habitude to all classes. The language of the law thus becomes, in some measure, a vulgar tongue; the spirit of the law, which is produced in the schools and courts of justice, gradually penetrates beyond their walls into the bosom of society, where it descends to the lowest classes, so that at last the whole people contract the habits and the tastes of the judicial magistrate.” ? Alexis de Tocqueville, Democracy in America

  4. Attorney? Really? Or is it former attorney? Status with the Ind St Ct? Status with federal court, with SCOTUS? This is a legal newspaper, or should I look elsewhere?

  5. Once again Indiana has not only shown what little respect it has for animals, but how little respect it has for the welfare of the citizens of the state. Dumping manure in a pond will most certainly pollute the environment and ground water. Who thought of this spiffy plan? No doubt the livestock industry. So all the citizens of Indiana have to suffer pollution for the gain of a few livestock producers who are only concerned about their own profits at the expense of everyone else who lives in this State. Shame on the Environmental Rules Board!

ADVERTISEMENT