Foreclosure & Alternatives Law
Foreclosure Laws in Indiana
Purchasing a home using a mortgage means signing a contract with the lender stating that mortgage payments will be made in a certain amount following a specific schedule. When those payments aren't made on time, the lender might opt to foreclose on the mortgage. In Indiana, lenders can't foreclose because a single payment was missed; however, they can begin the process at that time.
Judicial Foreclosure Process in Indiana
Indiana is a judicial foreclosure state, which means the lender must take the borrower to court to foreclose a property. The foreclosure process starts with the lender sending the borrower a notice stating that if the default, or past due amount, isn't remedied within 30 days, a complaint will be filed. Once the complaint is filed, the borrower is served with the summons and complaint. The borrower then has 20 days to reply.
From the date that the complaint is filed, the home can't be sold for at least three months. While three months is the most common time frame now, some older mortgages might allow for longer time periods.
If the foreclosure continues to move forward, the lender must publish a series of advertisement in the newspaper that serves the area where the home is located that begin at least 30 days before the scheduled sale. The notice must run in the paper at least one time per week for three weeks in a row. A notice also has to be posted at the courthouse.
Foreclosure Settlement Conference
Indiana offers a face-to-face mediation program for homeowners who are facing foreclosure. This meeting gives the lender and the borrower a chance to work out a foreclosure prevention agreement. This can mean that the lender and borrower agree on a loan modification, a forbearance agreement, a short sale, or a deed in lieu of a foreclosure.
In order to qualify for this program, the residence being foreclosed on has to be the borrower's primary residence. Borrowers must notify the court of their desire to participate in the program within 30 days of being served with the complaint and summons. When the meeting occurs, if an agreement is reached, both parties sign a copy of the agreement. Each party keeps a copy of the agreement, and one is filed with the court. If no agreement is reached, the lender must notify the court.
Waivers and Deficiencies
Indiana allows lenders to seek deficiency judgments from borrowers; however, borrowers do have an option to stop a lender from seeking a deficiency judgment. When the borrower has accepted that the foreclosure will continue, the borrower can sign a waiver that significantly reduces the waiting period of the foreclosure. When that waiver is signed within a period specified on the complaint and summons, the lender can't seek the deficiency judgment in Indiana.
Homeowners facing foreclosure in Indiana have a variety of options to stop a foreclosure from occurring. Exploring all the options available with the help of an experienced foreclosure attorney can help homeowners decide how to proceed.