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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. On a related note, I offered the ICLU my cases against the BLE repeatedly, and sought their amici aid repeatedly as well. Crickets. Usually not even a response. I am guessing they do not do allegations of anti-Christian bias? No matter how glaring? I have posted on other links the amicus brief that did get filed (search this ezine, e.g., Kansas attorney), read the Thomas More Society brief to note what the ACLU ran from like vampires from garlic. An Examiner pledged to advance diversity and inclusion came right out on the record and demanded that I choose Man's law or God's law. I wonder, had I been asked to swear off Allah ... what result then, ICLU? Had I been found of bad character and fitness for advocating sexual deviance, what result then ICLU? Had I been lifetime banned for posting left of center statements denigrating the US Constitution, what result ICLU? Hey, we all know don't we? Rather Biased.

  2. It was mentioned in the article that there have been numerous CLE events to train attorneys on e-filing. I would like someone to provide a list of those events, because I have not seen any such events in east central Indiana, and since Hamilton County is one of the counties where e-filing is mandatory, one would expect some instruction in this area. Come on, people, give some instruction, not just applause!

  3. This law is troubling in two respects: First, why wasn't the law reviewed "with the intention of getting all the facts surrounding the legislation and its actual impact on the marketplace" BEFORE it was passed and signed? Seems a bit backwards to me (even acknowledging that this is the Indiana state legislature we're talking about. Second, what is it with the laws in this state that seem to create artificial monopolies in various industries? Besides this one, the other law that comes to mind is the legislation that governed the granting of licenses to firms that wanted to set up craft distilleries. The licensing was limited to only those entities that were already in the craft beer brewing business. Republicans in this state talk a big game when it comes to being "business friendly". They're friendly alright . . . to certain businesses.

  4. Gretchen, Asia, Roberto, Tonia, Shannon, Cheri, Nicholas, Sondra, Carey, Laura ... my heart breaks for you, reaching out in a forum in which you are ignored by a professional suffering through both compassion fatigue and the love of filthy lucre. Most if not all of you seek a warm blooded Hoosier attorney unafraid to take on the government and plead that government officials have acted unconstitutionally to try to save a family and/or rescue children in need and/or press individual rights against the Leviathan state. I know an attorney from Kansas who has taken such cases across the country, arguing before half of the federal courts of appeal and presenting cases to the US S.Ct. numerous times seeking cert. Unfortunately, due to his zeal for the constitutional rights of peasants and willingness to confront powerful government bureaucrats seemingly violating the same ... he was denied character and fitness certification to join the Indiana bar, even after he was cleared to sit for, and passed, both the bar exam and ethics exam. And was even admitted to the Indiana federal bar! NOW KNOW THIS .... you will face headwinds and difficulties in locating a zealously motivated Hoosier attorney to face off against powerful government agents who violate the constitution, for those who do so tend to end up as marginalized as Paul Odgen, who was driven from the profession. So beware, many are mere expensive lapdogs, the kind of breed who will gladly take a large retainer, but then fail to press against the status quo and powers that be when told to heel to. It is a common belief among some in Indiana that those attorneys who truly fight the power and rigorously confront corruption often end up, actually or metaphorically, in real life or at least as to their careers, as dead as the late, great Gary Welch. All of that said, I wish you the very best in finding a Hoosier attorney with a fighting spirit to press your rights as far as you can, for you do have rights against government actors, no matter what said actors may tell you otherwise. Attorneys outside the elitist camp are often better fighters that those owing the powers that be for their salaries, corner offices and end of year bonuses. So do not be afraid to retain a green horn or unconnected lawyer, many of them are fine men and woman who are yet untainted by the "unique" Hoosier system.

  5. I am not the John below. He is a journalist and talk show host who knows me through my years working in Kansas government. I did no ask John to post the note below ...

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