ILNews

Panel disagrees on foreclosure settlement resolution

Back to TopCommentsE-mailPrintBookmark and Share

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.”

 

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. Being dedicated to a genre keeps it alive until the masses catch up to the "trend." Kent and Bill are keepin' it LIVE!! Thank you gentlemen..you know your JAZZ.

  2. Hemp has very little THC which is needed to kill cancer cells! Growing cannabis plants for THC inside a hemp field will not work...where is the fear? From not really knowing about Cannabis and Hemp or just not listening to the people teaching you through testimonies and packets of info over the last few years! Wake up Hoosier law makers!

  3. If our State Government would sue for their rights to grow HEMP like Kentucky did we would not have these issues. AND for your INFORMATION many medical items are also made from HEMP. FOOD, FUEL,FIBER,TEXTILES and MEDICINE are all uses for this plant. South Bend was built on Hemp. Our states antiquated fear of cannabis is embarrassing on the world stage. We really need to lead the way rather than follow. Some day.. we will have freedom in Indiana. And I for one will continue to educate the good folks of this state to the beauty and wonder of this magnificent plant.

  4. Put aside all the marijuana concerns, we are talking about food and fiber uses here. The federal impediments to hemp cultivation are totally ridiculous. Preposterous. Biggest hemp cultivators are China and Europe. We get most of ours from Canada. Hemp is as versatile as any crop ever including corn and soy. It's good the governor laid the way for this, regrettable the buffoons in DC stand in the way. A statutory relic of the failed "war on drugs"

  5. Cannabis is GOOD for our PEOPLE and GOOD for our STATE... 78% would like to see legal access to the product line for better Hoosier Heath. There is a 25% drop in PAIN KILLER Overdoses in states where CANNABIS is legal.

ADVERTISEMENT