Apparently thats not what happened. The Blaseys settled with the lender and the bank asked Judge Martha Kavanaugh to dismiss the case. She did. The Blaseys kept their house and there is no record that they ever appeared in person in front of Judge K. This is according to Montgomery county court records researched today by Steven Portnoy of CBS radio.
Uncontested motions don't usually get a hearing. Bank lawyer types up a motion to dismiss then faxes to defendant lawyer, defendant agrees and signs, then it gets faxed to the court and the judge signs it. Only get an appearance if motion is contested and then a hearing gets set. At least in my experience with being sued and suing others.