1)      Pre-suit Foreclosure Notice.  Under the new law, the 30-day pre-suit foreclosure notice (which was previously required to be sent in all foreclosure cases), is now only required in cases involving the debtor’s primary residence.  The new law serves to clarify an ambiguity under prior law, which should help to reduce costs and delays in commercial foreclosure actions while still protecting consumers at risk of losing their homes.

2)      New 180-Day Period to File Praecipe.  Previously, a judgment holder in a foreclosure action was essentially left to praecipe a sheriff’s sale at-will.  Now, if the judgment holder fails to file a praecipe initiating a sheriff’s sale within 180 days after:

1. the judgment and decree of foreclosure is entered or
2. 3 months from the filing of the complaint,

whichever is later, and such sale is not otherwise prohibited by law, subject to a voluntary statewide foreclosure moratorium, or subject to a written agreement between the owner of the property and the judgment holder, an enforcement authority that has issued an abatement order may proceed to set the property for sale. 

For purposes of this new provision, an enforcement authority is defined as the executive department authorized by ordinance to administer the Unsafe Building Law or, in a consolidated city, the department of metropolitan development.  It should be noted, however, that if no abatement order has been issued, or one of the other exceptions apply, the traditional rule regarding setting a property for sheriff’s sale remains unchanged. 

3)      New 120-Day Requirement to Sell Property.  In addition to the new praecipe time limits, all sheriff’s sales in Indiana must now be conducted within 120 days after the judgment and decree of foreclosure is certified to the sheriff under seal of court.  While this new requirement should not cause many problems in traditional sheriff-conducted sales, it might present an issue with foreclosure sales conducted by an auctioneer if the new time limits are not kept in mind.

4)      Payment of Property Taxes Prior to Sale.   Finally, all outstanding property taxes must now be paid prior to a sheriff’s sale.  This requirement includes redeeming all property taxes which were sold in a prior tax sale and/or payment of all delinquent taxes and penalties.  Although most Indiana sheriffs already required the taxes to be brought current prior to a sale, it has now been codified statewide.

If you have any questions about the changes to Indiana’s foreclosure law, please contact a Bamberger attorney for more information.

Author: Daniel R. Robinson (bio)
Phone: 812.452.3564
Email: drobinson@bamberger.com

Realizing that a junior creditor had not been notified of the foreclosure, the lender’s counsel intended to postpone the scheduled sheriff’s sale, but failed to do so.  The sheriff conducted the sale without the lender or lender’s counsel being present.  The sole bidder successfully purchased the property for $20,000.  To obtain clean title, the sole bidder then wisely purchased the $30,000 lien of the junior creditor.

In trying to overturn the sale, the lender argued that the sale price was “unconscionably” low and the bidder was “unjustly enriched.”  However, the court found that the lender had unclean hands because of the mistakes made in the foreclosure process and that the bidder should not be deprived of the property.

The court recognized the importance of the finality of a foreclosure sale and stated that foreclosure sales should only be set aside in limited circumstances.  Although some states recognize comparisons of bid price fair to market values as a sole indication of whether a sale can be vacated, the Court found that the rule in Wyoming was to examine all the facts and equities of each case to determine whether there has been unjust enrichment.

The Court found that the bidder’s expenditures in purchasing the junior creditor’s lien and the lender’s potential claim against its counsel for negligence were factors supporting a decision in favor of the bidder.

Author: Jason P. Lueking (bio)
Phone: 317.464.1591
email: jlueking@bamberger.com