GMAC Mortgage, LLC v. Dyer
965 N.E.2d 762
Ind. Ct. App.2012Background
- Dyer defaulted on an FHA-insured note and mortgage; GMAC acquired the mortgage.
- At a settlement conference, the parties agreed to proceed with a deed in lieu of foreclosure.
- GMAC drafted a Deed in Lieu (DIL) agreement including HUD-required language that neither GMAC nor HUD would pursue a deficiency judgment.
- Dyer refused to sign, seeking explicit release from personal liability beyond the HUD language.
- The trial court granted Dyer’s request to revise the DIL to include explicit personal-liability release language.
- Hud regulations and Mortgagee Letter 00-05 require a DIL to release the borrower from all obligations and to acknowledge no deficiency will be pursued.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the DIL release Dyer from personal liability under federal law and HUD regs? | Dyer seeks explicit release from personal liability beyond HUD language; argues DIL must include such release. | GMAC's HUD-compliant language already releases Dyer from personal liability. | Yes; DIL language releasing from all personal liability complies. |
| Is GMAC's 'no deficiency pursued' clause sufficient to release personal liability? | Explicit release language is required for clarity and protection under HUD rules. | The HUD-compliant clause suffices to release personal liability under federal law. | Yes; the clause is sufficient to release Dyer from personal liability. |
Key Cases Cited
- Ingram v. Cuomo, 51 F. Supp. 2d 667 (M.D.N.C.1999) (HUD DIL releases borrower from all mortgage obligations; pre-Mortgagee Letter 00-05)