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ATTORNEYS FOR APPELLANT
Robert G. Forbes Nathan T. Danielson Forcum, Forbes & Danielson LLP Hartford City, Indiana

ATTORNEYS FOR APPELLEE
Donald L. Centers Hannon Kolas & Centers, P.C. Indianapolis, Indiana

ATTORNEYS FOR AMICUS CURIAE
INDIANA LAND TITLE ASSOCIATION, INC. Craig D. Doyle Mark R. Galliher Kurt V. Laker Doyle Legal Corporation, P.C. Indianapolis, Indiana

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Indiana Supreme Court
_________________________________ No. 76S03-1009-CV-515 CITIZENS STATE BANK OF NEW CASTLE,

In the

FILED
Jun 29 2011, 1:05 pm
of the supreme court, court of appeals and tax court

CLERK

Appellant (Defendant and Crossclaim Plaintiff below), v. COUNTRYWIDE HOME LOANS, INC., D/B/A AMERICAS WHOLESALE LENDER, Appellees (Plaintiff below), and FEDERAL NATIONAL MORTGAGE ASSOCIATION AND STEUBEN COUNTY TREASURER. Appellees (Cross-claim Defendant below). _________________________________ Appeal from the Steuben Superior Court, No. 76D01-0710-MF-0657 The Honorable William C. Fee, Judge _________________________________ On Petition To Transfer from the Indiana Court of Appeals, No. 76A03-0909-CV-423 _________________________________ June 29, 2011 Rucker, Justice.

A mortgage holder foreclosed its mortgage, took title to the subject property at a sheriffs sale, and then sold the property to a third party. The foreclosing mortgagee subsequently discovered it had inadvertently failed to name a junior lienholder in the foreclosure action. We granted transfer to shed light on the status of the original first mortgage in this context.

Facts and Procedural History On April 27, 2005 Countrywide Home Loans, Inc. ("Countrywide") obtained a first mortgage against certain real estate owned by Rita K. Cloud and Kenneth D. Cloud located in Steuben County. The mortgage was recorded two days later. On August 28, 2006 Countrywide filed a foreclosure action against the Clouds on which the trial court entered judgment in the amount $229,416.66 plus interest. At a sheriffs sale on February 22, 2007 Countrywide bid its judgment1 and took title to the subject property by way of a sheriffs deed. The deed was recorded March 15, 2007. Before these events occurred the Clouds executed a promissory note in favor of Citizens State Bank of New Castle ("Citizens Bank") in January 2003. When the Clouds failed to pay the note in accordance with its terms Citizens Bank filed a complaint in the Steuben Circuit Court. The Clouds failed to respond and Citizens Bank thereafter filed a motion for default judgment. The trial court granted the motion on June 9, 2006 and entered judgment in the amount of $109,859.38 plus costs, interest, late charges, and attorney fees. Appellants App. at 24-25. Apparently the judgment was properly recorded.2 The record shows that at the time Countrywide filed its foreclosure action, it did not name Citizens Bank as a party.3 Thereafter on April 19, 2007 Countrywide conveyed title to the property to the Federal National Mortgage Association ("FNMA") by way of a limited warranty deed which was recorded on May 3, 2007.

1

The total amount of the bid was $235,925.30. Appellants App. at 93.

2

We say "apparently" because the record is not clear whether the judgment was timely recorded and indexed in the countys judgment docket. See Ind. Code

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Indiana Law