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Supreme Court to rule on priority rights on liens

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The Indiana Supreme Court took a case from the Indiana Court of Appeals involving strict foreclosure in which the lower appellate court adopted the reasoning from a federal case to determine priority rights on liens.

The high court granted transfer to Citizens State Bank, et al. v. Countrywide Home Loans, et al., No. 76S03-1009-CV-515, in which the courts had to decide what rights, if any, Countrywide or the Federal National Mortgage Association has regarding Countrywide's attempt at strict foreclosure. Strict foreclosure permits a party who has acquired title through or after a foreclosure sale or gotten the title through a deed in lieu of foreclosure to cut off the interests of any junior lienholders who weren't parties to the foreclosure action.
 
Countrywide held a mortgage on property in which Citizens obtained a default judgment against the owners, which was properly recorded. Just a few months later, Countrywide filed to foreclose on the property and didn't name the bank as a defendant in its complaint to foreclose. Countrywide then got the title to the property at a sheriff's sale, recorded it, and then transferred it to FNMA. After learning about the bank's judgment lien against the property, Countrywide filed its complaint for strict foreclosure against the bank. Citizens State Bank filed its complaint to foreclose its judgment lien on the property against FNMA.

The trial court granted summary judgment for Countrywide. On appeal, the Court of Appeals reversed and remanded with instructions to enter summary judgment for Citizens on Countrywide's complaint and to enter summary judgment for the bank on its complaint to foreclose judgment lien.

For the first time, the Court of Appeals specifically adopted the reasoning from Brightwell v. United States, 805 F. Supp. 1464 (S.D. Ind. 1992). Brightwell correctly states Indiana law regarding priority rights when a foreclosing mortgagee sells the property to a third party, the appellate court concluded.

"When property is transferred for value or resold to a third party, that party cannot then assert what was formerly a superior mortgage lien position against the judgment lien. Rather, the third party takes the property subject to the valid judgment lien," wrote Judge Terry Crone.
 

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  1. What is this, the Ind Supreme Court thinking that there is a separation of powers and limited enumerated powers as delegated by a dusty old document? Such eighteen century thinking, so rare and unwanted by the elites in this modern age. Dictate to us, dictate over us, the massess are chanting! George Soros agrees. Time to change with times Ind Supreme Court, says all President Snows. Rule by executive decree is the new black.

  2. I made the same argument before a commission of the Indiana Supreme Court and then to the fedeal district and federal appellate courts. Fell flat. So very glad to read that some judges still beleive that evidentiary foundations matter.

  3. KUDOS to the Indiana Supreme Court for realizing that some bureacracies need to go to the stake. Recall what RWR said: "No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!" NOW ... what next to this rare and inspiring chopping block? Well, the Commission on Gender and Race (but not religion!?!) is way overdue. And some other Board's could be cut with a positive for State and the reputation of the Indiana judiciary.

  4. During a visit where an informant with police wears audio and video, does the video necessary have to show hand to hand transaction of money and narcotics?

  5. I will agree with that as soon as law schools stop lying to prospective students about salaries and employment opportunities in the legal profession. There is no defense to the fraudulent numbers first year salaries they post to mislead people into going to law school.

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