Judges find mortgage company not culpably negligent

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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.



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  1. This is ridiculous. Most JDs not practicing law don't know squat to justify calling themselves a lawyer. Maybe they should try visiting the inside of a courtroom before they go around calling themselves lawyers. This kind of promotional BS just increases the volume of people with JDs that are underqualified thereby dragging all the rest of us down likewise.

  2. I think it is safe to say that those Hoosier's with the most confidence in the Indiana judicial system are those Hoosier's who have never had the displeasure of dealing with the Hoosier court system.

  3. I have an open CHINS case I failed a urine screen I have since got clean completed IOP classes now in after care passed home inspection my x sister in law has my children I still don't even have unsupervised when I have been clean for over 4 months my x sister wants to keep the lids for good n has my case working with her I just discovered n have proof that at one of my hearing dcs case worker stated in court to the judge that a screen was dirty which caused me not to have unsupervised this was at the beginning two weeks after my initial screen I thought the weed could have still been in my system was upset because they were suppose to check levels n see if it was going down since this was only a few weeks after initial instead they said dirty I recently requested all of my screens from redwood because I take prescriptions that will show up n I was having my doctor look at levels to verify that matched what I was prescripted because dcs case worker accused me of abuseing when I got my screens I found out that screen I took that dcs case worker stated in court to judge that caused me to not get granted unsupervised was actually negative what can I do about this this is a serious issue saying a parent failed a screen in court to judge when they didn't please advise

  4. I have a degree at law, recent MS in regulatory studies. Licensed in KS, admitted b4 S& 7th circuit, but not to Indiana bar due to political correctness. Blacklisted, nearly unemployable due to hostile state action. Big Idea: Headwinds can overcome, esp for those not within the contours of the bell curve, the Lego Movie happiness set forth above. That said, even without the blacklisting for holding ideas unacceptable to the Glorious State, I think the idea presented above that a law degree open many vistas other than being a galley slave to elitist lawyers is pretty much laughable. (Did the law professors of Indiana pay for this to be published?)

  5. Joe, you might want to do some reading on the fate of Hoosier whistleblowers before you get your expectations raised up.