Panel disagrees on foreclosure settlement resolution

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The Indiana Court of Appeals has ruled that federal law and housing regulations require that deeds in lieu of foreclosure release the borrower from any mortgage obligation, and the mortgage company issuing an agreement can use that federal language in the contract.

Ronald Dyer and his wife entered an FHA-secured mortgage loan in 2008 for their home in Greene County, but after she died the husband defaulted on the loan now assigned to GMAC Mortgage. The company foreclosed, but they agreed to settle and decided to proceed with a deed in lieu of foreclosure. GMAC drafted a written agreement that included a provision using language required by the U.S. Housing and Urban Development that neither would pursue a deficiency judgment. Dyer didn’t feel it provided enough protection, and he refused to sign until a new agreement provided that he was released from all personal liability.

The trial court agreed with Dyer and ordered the contract be rewritten, but a two-judge Court of Appeal majority struck down that decision In GMAC Mortgage, LLC v. Ronald Glenn Dyer, No. 28A04-1107-MF-404.

Reviewing federal statute and HUD regulations, the appellate court found the language GMAC used was sufficient and protected Dyer. The state appellate panel disagreed with Dyer’s reliance on a single court opinion from Maryland in 1999 that found the “shall not be pursued for deficiency judgments” language not protective enough because HUD could still intercept future tax refunds pursuant to the Deficit Reduction Act of 1984.

The panel found that precedent doesn’t control here because it was written before the current statute and doesn’t apply to the facts in this case. Judge Nancy Vaidik wrote the opinion and Judge Edward Najam concurred.

Chief Judge Margret Robb concurred with the majority’s determination that a deed in lieu of foreclosure releases a borrower from any obligation under a mortgage. But she dissented with the specific resolution in this case, seeing no harm in including Dyer’s requested provision and saying she would affirm the trial court’s order requiring the agreement revision.

“If a deed in lieu of foreclosure does in fact release a mortgagor from personal liability and if everyone agrees Dyer should be released from personal liability, the requested provision would only clarify this reality,” she wrote. “HUD regulations do not prohibit parties adding language in addition to what is required, and Dyer is not attempting to remove a provision required by HUD.”



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  1. 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

  2. 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?)

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

  5. I had a hospital and dcs caseworker falsify reports that my child was born with drugs in her system. I filed a complaint with the Indiana department of health....and they found that the hospital falsified drug screens in their investigation. Then I filed a complaint with human health services in Washington DC...dcs drug Testing is unregulated and is indicating false positives...they are currently being investigated by human health services. Then I located an attorney and signed contracts one month ago to sue dcs and Anderson community hospital. Once the suit is filed I am taking out a loan against the suit and paying a law firm to file a writ of mandamus challenging the courts jurisdiction to invoke chins case against me. I also forwarded evidence to a u.s. senator who contacted hhs to push an investigation faster. Once the lawsuit is filed local news stations will be running coverage on the situation. Easy day....people will be losing their jobs soon...and judge pancol...who has attempted to cover up what has happened will also be in trouble. The drug testing is a kids for cash and federal funding situation.