Blocker v. US Bank (IN)

Summary: Mortgagor’s three attempts to pay off the balance of a loan in default were deemed insufficient for failure to provide legally acceptable funds.


Blocker v. U.S. Bank Nat. Ass’n, 993 N.E.2d 1154 (Ind. Ct. App. 2013).


Facts: In 2007, the Blockers signed a promissory note and executed a mortgage with Accredited Home Lenders Inc. (Accredited) for the purchase of a home. In June 2011, the Blockers ceased the monthly payment due on the loan. Accredited’s nominee, Mortgage Electronic Registration System, on two occasions, assigned the mortgage to US Bank in October and December of 2011. At the end of December, US Bank initiated foreclosure proceedings. The Blockers, through their attorney-in-fact, Marcus Lenton, Jr., attempted to pay off the remaining balance of the loan on three separate occasions. The first attempt was in February 2012, when Lenton sent a personal, non-certified check for $180,000.00 to US bank with “not for deposit EFT only” written in the endorsement box. US Bank did not attempt to deposit the check and informed the Blockers that only funds via money order, cashier’s check, or wire transfer would be accepted. The second attempt occurred at a settlement conference in April 2012 where the Blockers presented US Bank with a “lawful order for money” directed to the United States Treasury Department. Lastly, Lenton prepared a UCC Financing Statement requesting US Bank to release their mortgage interest in exchange for an “International Bill of Exchange” which US Bank also refused. In addition, the Blockers argued a violation of their procedural due process rights because of US Bank’s failure to answer interrogatories before the summary judgment hearing.


Holding: Affirmed. Though the Blocker’s claimed that they attempted to pay off the mortgage through their attorney-in-fact, they did not go through normal banking channels but instead requested that the US Treasury Department pay off the mortgage for them. The Blocker’s argument for this position is the result of an interpretation of the “redemptionist movement” which they claimed allowed them to access a clandestine “straw man” account held in their name by the US Government. They also relied on the “vapor money” theory, which states that because the bank was never placed at risk of loss, there was no consideration for the loan and thus the mortgage was invalid. Both of these arguments however have been rejected repeatedly by courts across the nation. Not only were Lenton’s attempts to pay off the loan unorthodox, but they were also unacceptable and failed to access or provide valid funds to pay off the mortgage.

Additionally, the appellate court rejected the Blocker’s procedural due process argument for: a) lack of precedent supporting the position; b) the Blocker’s did not file a motion to attempt to compel discovery under Indiana Trial Rule 37 and thus cannot be denied rights they failed to properly assert; and c) Indiana Trial Rules 33 and 34 provide for a 30-day period for opposing parties to answer interrogatories. The Blockers failed to submit their request with enough time before the scheduled summary judgment hearing and never sought to obtain the court’s permission to continue the hearing to allow them to receive US Bank’s answer. The court goes on to dismiss the argument that the assignment had the appearance of fraud due to the presence of two assignments. Although there were two assignments, they do not foster a reasonable inference of fraud. US Bank was the current holder of the note and thus was entitled to foreclose.

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By: ATG Underwriting Department | Posted on: Fri, 11/08/2013 - 11:05am