Indiana Foreclosure Laws
Judicial Foreclosure Available: Yes
Non-Judicial Foreclosure Available: No
Security Instruments: Mortgage
Right of Redemption Period: 3 Months Before Sale
Deficiency Judgments Allowed: Yes; Lender’s Discretion
Time Frame: 150 Days
Public Notice: Complaint
Indiana is considered to be a lien theory state, which means that a property acts as security for the borrower’s loan. A title for the property in question can be secured with a document called a mortgage. If the borrower defaults on their loan, the property may be foreclosed. In Indiana, only judicial foreclosures are permitted, which means that lenders have to file a lawsuit and obtain court approval for the foreclosure process to be initiated. The state does not have a power of sale provision.
The state of Indiana does not have a post sale statutory right of redemption, which would allow the borrower to reclaim their property once it has been foreclosed by paying off their loan and any additional costs in full. However, borrowers may attempt to reclaim their property three (3) months before the sale of the property.
Deficiency judgments may be obtained when the property that has been foreclosed sells for less than the defaulted amount. The borrower will then still be responsible for the difference between the selling price and what they owed.
Types of Foreclosures Allowed in Indiana
Indiana statute allows for judicial foreclosures on defaulted properties only. This type of foreclosure, also known as foreclosure by judicial sale, involves selling the defaulted property under court supervision. In order for a judicial foreclosure to be possible, no power of sale clause may be present in the loan documents.
Rules to Follow for Foreclosure Sale:
1. To begin the process of foreclosure, the lender must file a lawsuit against the mortgagor along with a Lis Pendens, which is a recorded document providing public notice that the property is being foreclosed upon. The lender must then wait a period of three (3) to twelve (12) months before proceeding with the foreclosure process. The wait time is directly related to the date the mortgage was signed. During this time, the borrower may file a waiver of the time limit, allowing the sale to proceed without any delay. If this happens, the lender loses the right to pursue a deficiency judgment.
2. Once the court declares a foreclosure, a notice of sale will be issued that must be published weekly for three (3) consecutive weeks by the sheriff in a newspaper that circulates the county where the property is located. The first publication must be printed thirty (30) days prior to the sale date. The intention to sell must also be served upon the borrower and posted in three visible places in the county where the property is located.
3. The notice must contain specific information about the property, including date, time and place of the sale, and other relevant information.
4. The sale must take place between the hours of 10 a.m. and 4p.m. on the date specified in the notice. Sales may not occur on Sunday. The town sheriff will hold the sale and the property will be sold to the highest bidder at auction. The deed to the property is given immediately after the sale.
5. The borrower may continue to live on the property, rent free, until the property is sold at auction.
Hiring an Indiana Foreclosure Attorney
During these tough economic times, more and more homeowners are finding it difficult to keep up with their mortgages. Many homeowners that were previously able to pay their loans are falling behind and are facing foreclosure. If this has happened to you, rest assured that help is available. Speak to a leading foreclosure lawyer in Indiana right away to fight for your rights and prevent your home from being repossessed.
Foreclosure attorneys work diligently to make sure you don’t lose your home. They will speak to your lender and try to work out an agreement based on your financial situation that does not involve repossession. Your foreclosure attorney may suggest mortgage modification, refinancing or even a temporary halt in payments. Since the process of foreclosing a property costs lenders money, if an adequate plan is proposed, your lender will most likely agree to it.
Whether you are struggling with your mortgage due to job loss, a pay cut or even an illness, foreclosure lawyers will help you fight for your home to make sure your property is not seized. Contact a top team of foreclosure attorneys in Indiana right away to get started on your case.