Indiana Foreclosure Process
The foreclosure process begins when a homeowner stops making payments on his or her mortgage for a period of time, which then forces the mortgage company to seize the home. Depending on the homeowner's situation, the circumstances around the foreclosure vary greatly. The procedure for handling foreclosures in Indiana differs from other states as well.
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Judical Process
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In the state of Indiana, lenders go to court for a judicial foreclosure proceeding where a final judgment of foreclosure is issued by the court. The court then allows the property to be sold at a public auction. "Alis pendens" and a complaint is filed in court. Alis pendens is documentation that notice of a property being foreclosed upon was provided to the public. Typically, a lender must wait three months before filing a foreclosure complaint. However, based on when certain mortgages are executed, this period could be longer.
Notice of Auction/Sale
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Before a foreclosure property can be sold in Indiana, the "sheriff's sale" must be advertised in the newspaper once a week for three weeks. The advertisement must be made at least 30 days before the auction date. At this time, the borrower must be served notice of sale by sheriff and as governed by the Indiana Rules of Trial Procedure. Sheriff sales can take place any day of the week (excluding Sunday) between 10 a.m.and 4 p.m.
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Time Frame
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Depending on the age of the mortgage and the court schedule, it generally takes 150 days to administer an uncontested foreclosure in Indiana. The process may be delayed if the borrower files bankruptcy, contests the proceedings, or seeks additional court hearings.
Right of Redemption
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Indiana doesn't recognize the right to redemption after sale. This means borrowers don't have the opportunity to reclaim a foreclosed property after the sale by making full payments in the sum of the unpaid mortgage and fees. However, Indiana does allow a right to redemption after judgment is issued by the court and before the sale occurs.
Deficiency Judgments
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A deficiency judgment can be obtained in Indiana when a foreclosed property is sold at public auction for less than the amount owed on the loan. In this case, a borrower owes the lender the difference between the original mortgage loan and what the property sold for at public auction.
Prevention/Solution
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The Indiana Prevention Foreclosure Network (IFPN) is a resource that provides information to assist homeowners facing the foreclosure process. The network provides free help to homeowners with contacting lenders, financial planning and budgeting.
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