Full question:
In Indiana my mother passed away w/o a will. She owns a house valued at 45,000 with a 15,000 mortgage. The lender was in the process of foreclosure but put a hold on the process because payments that were made. Can they take the house and keep it even if the value of the home is more than the loan? My credit is awful and I am afraid I can't get financing. Is there a law that says they have to allow me time to sell the property? I am the only heir.
- Category: Real Property
- Subcategory: Foreclosure
- Date:
- State: Indiana
Answer:
Yes, property may be foreclosed on even if the value of the home is greater than the loan. If surplus proceeds remain from the sale price, the lender cannot keep more than owed for the loan and costs of foreclosure.
In Indiana, the lenders go to court in what is known as a judicial foreclosure proceeding where the court must issue a final judgment of foreclosure. The property is then sold as part of a publicly noticed sale. A complaint is filed in court along with what is known a lis pendens. A recorded lis pendens serves as public notice that the property is being foreclosed upon. A lender must usually wait three (3) months to execute on a complaint for foreclosure. The period is longer for certain mortgages based on when they were executed. There is a pre-sale right to redemption after the issuance of a judgment. To redeem the property, the debtor must pay in full all amounts due.
Please see the following IN statute regarding the right of recemption:
IC 32-29-7-7 Before the sale under this chapter, any owner or part....
Before the sale under this chapter, any owner or part owner of the real
estate may redeem the real estate from the judgment by payment to the:
(1) clerk before the issuance to the sheriff of the judgment and decree;
or
(2) sheriff after the issuance to the sheriff of the judgment and decree;
of the amount of the judgment, interest, and costs for the payment or
satisfaction of which the sale was ordered. If the owner or part owner
redeems the real estate under this section, process for the sale of the
real estate under judgment may not be issued or executed, and the officer
receiving the redemption payment shall satisfy the judgment and vacate
order of sale. However, if the real estate is redeemed by a part owner, the
part owner shall have a lien on the shares of the other owners for their
respective shares of the redemption money, with interest at the rate of
eight percent (8%) per annum, plus the costs of redemption. The lien shall
be of the same force and effect as the judgment lien redeemed by the
part owner and shall be enforceable by appropriate legal proceedings.
See also:
IC 29-1-14-20 When any assets of the estate are encumbered by....
When any assets of the estate are encumbered by mortgage, pledge or other
lien, the personal representative may pay such encumbrance or any
part thereof, renew or extend any obligation secured by the encumbrance or may
convey or transfer such assets to the creditor in satisfaction of his lien,
in whole or in part, whether or not the holder of the encumbrance has filed
a claim, if it appears to be for the best interest of the estate. As to any
such conveyance or transfer the personal representative must obtain prior
authorization of the court and as to any such payment, renewal or extension
the personal representative must obtain prior authorization or subsequent
approval of the court. The making of such payment shall not increase the
share of the distributee entitled to such encumbered assets unless
otherwise provided by will.
SECTION 10. IC 29-1-7-7, AS AMENDED BY P.L. 95-2007, SECTION 4, IS AMENDED
TO READ AS FOLLOWS {EFFECTIVE JULY 1, 2009}: Sec. 7. (a) As soon as letters
testamentary or of administration, general or special, supervised or
unsupervised, have been issued, the clerk of the court shall publish notice
of the estate administration.
(b) The notice required under subsection (a) shall be published in a
newspaper of general circulation, printed in the English language and
published in the county where the court is located, once each week for two
(2) consecutive weeks. A copy of the notice, with proof of publication, shall
be filed with the clerk of the court as a part of the administration of the
estate within thirty (30) days after the publication. If no newspaper is
published in the county, the notice shall be published in a newspaper
published in an adjacent county.
(c) The notice required under subsection (a) shall be served by
certifiedfirst class postage prepaid mail on each heir, devisee,
legatee, and known creditor whose name and address is set forth in the
petition for probate or letters, except as otherwise ordered by the
court. The personal representative shall furnish sufficient copies of the
notice, prepared for mailing, and the clerk of the court shall mail the
notice upon the issuance of letters.
(d) The personal representative or the personal representative's agent
shall serve notice on each creditor of the decedent:
(1) whose name is not set forth in the petition for probate or letters
under subsection (c);
(2) who is known or reasonably ascertainable within one (1) month after
the first publication of notice under subsection (a); and
(3) whose claim has not been paid or settled by the personal
representative.
The notice may be served by mail or any other means reasonably calculated to
ensure actual receipt of the notice by a creditor.
(e) Notice under subsection (d) shall be served within one (1) month after
the first publication of notice under subsection (a) or as soon as possible
after the elapse of one (1) month. If the personal representative or the
personal representative's agent fails to give notice to a known or reasonably
ascertainable creditor of the decedent under subsection (d) within one (1)
month after the first publication of notice under subsection (a), the period
during which the creditor may submit a claim against the estate includes an
additional period ending two (2) months after the date notice is given to the
creditor under subsection (d). However, a claim filed under IC 29-1-14-1(a)
more than nine (9) months after the death of the decedent is barred.
(f) A schedule of creditors that received notice under subsection (d)
shall be delivered to the clerk of the court as soon as possible after notice
is given.
(g) The giving of notice to a creditor or the listing of a creditor on the
schedule delivered to the clerk of the court does not constitute an admission
by the personal representative that the creditor has an allowable claim
against the estate.
(h) If any person entitled to receive notice under this section is under a
legal disability, the notice may be served upon or waived by the person's
natural or legal guardian or by the person who has care and custody of the
person.
(i) The notice shall read substantially as follows:
NOTICE OF ADMINISTRATION
In the _____________ Court of ______________ County, Indiana.
Notice is hereby given that _________ was, on the ____ day of ______, 20
__, appointed personal representative of the estate of _________, deceased,
who died on the ___ day of ________, 20 __.
All persons who have claims against this estate, whether or not now due,
must file the claim in the office of the clerk of this court within three (3)
months from the date of the first publication of this notice, or within nine
(9) months after the decedent's death, whichever is earlier, or the claims
will be forever barred.
Dated at ________, Indiana, this ___ day of ______, 20 __.
_________________________
CLERK OF THE _________ COURT
FOR _______ COUNTY, INDIANA
IC 32-29-7-3 (a) In a proceeding for the foreclosure of a mortgage....
(a) In a proceeding for the foreclosure of a mortgage executed on real
estate, process may not issue for the execution of a judgment or decree of
sale for a period of three (3) months after the filing of a complaint in
the proceeding. However:
(1) the period is:
(A) twelve (12) months in a proceeding for the foreclosure of a mortgage
executed before January 1, 1958; and
(B) six (6) months in a proceeding for the foreclosure of a mortgage
executed after December 31, 1957, but before July 1, 1975; and
(2) if the court finds that the mortgaged real estate is residential real
estate and has been abandoned, a judgment or decree of sale may be executed
on the date the judgment of foreclosure or decree of sale is entered,
regardless of the date the mortgage is executed.
(b) A judgment and decree in a proceeding to foreclose a mortgage that is
entered by a court having jurisdiction may be filed with the clerk in any
county as provided in IC 33-32-3-2. After the period set forth in
subsection (a) expires, a person who may enforce the judgment and decree
may file a praecipe with the clerk in any county where the judgment and
decree is filed, and the clerk shall promptly issue and certify to the
sheriff of that county a copy of the judgment and decree under the seal of
the court.
(c) Upon receiving a certified judgment under subsection (b), the sheriff
shall, subject to section 4 of this chapter, sell the mortgaged premises or
as much of the mortgaged premises as necessary to satisfy the judgment,
interest, and costs at public auction at the office of the sheriff or at
another location that is reasonably likely to attract higher competitive
bids. The sheriff shall schedule the date and time of the sheriff's sale
for a time certain between the hours of 10 a.m. and 4 p.m. on any day of
the week except Sunday.
(d) Before selling mortgaged property, the sheriff must advertise the
sale by publication once each week for three (3) successive weeks in a
daily or weekly newspaper of general circulation. The sheriff shall publish
the advertisement in at least one (1) newspaper published and circulated in
each county where the real estate is situated. The first publication shall
be made at least thirty (30) days before the date of sale. At the time of
placing the first advertisement by publication, the sheriff shall also
serve a copy of the written or printed notice of sale upon each owner of
the real estate. Service of the written notice shall be made as provided in
the Indiana Rules of Trial Procedure governing service of process upon a
person. The sheriff shall charge a fee of ten dollars ($10) to one (1)
owner and three dollars ($3) to each additional owner for service of
written notice under this subsection. The fee is:
(1) a cost of the proceeding;
(2) to be collected as other costs of the proceeding are collected; and
(3) to be deposited in the county general fund for appropriation for
operating expenses of the sheriff's department.
(e) The sheriff also shall post written or printed notices of the sale at
the door of the courthouse of each county in which the real estate is
located.
(f) If the sheriff is unable to procure the publication of a notice
within the county, the sheriff may dispense with publication. The sheriff
shall state that the sheriff was not able to procure the publication and
explain the reason why publication was not possible.
(g) Notices under subsections (d) and (e) must contain a statement, for
informational purposes only, of the location of each property by street
address, if any, or other common description of the property other than
legal description. A misstatement in the informational statement under this
subsection does not invalidate an otherwise valid sale.
(h) The sheriff may charge an administrative fee of not more than two
hundred dollars ($200) with respect to a proceeding referred to in
subsection (b) for actual costs directly attributable to the administration
of the sale under subsection (c). The fee is:
(1) payable by the person seeking to enforce the judgment and decree; and
(2) due at the time of filing of the praecipe; under subsection (b).
IC 32-29-7-4 (a) A sheriff shall offer to sell and sell property on....
(a) A sheriff shall offer to sell and sell property on foreclosure in a
manner that is reasonably likely to bring the highest net proceeds from the
sale after deducting the expenses of the offer and sale.
(b) Upon prior petition of the debtor or any creditor involved in the
foreclosure proceedings, the court in its order of foreclosure shall order
the property sold by the sheriff through the services of an auctioneer
requested by the petitioner and approved by the court if:
(1) the court determines that a sale is economically feasible; or
(2) all the creditors in the proceedings agree to both that method of
sale and the compensation to be paid the auctioneer.
(c) The sheriff shall engage the auctioneer not later than fourteen (14)
calendar days after the date of the order entered by the court under
subsection (b). The auctioneer shall schedule the auction and conduct the
auctioneer's activities as appropriate to bring the highest bid for the
property on foreclosure. The advertising conducted by the auctioneer is in
addition to any other notice required by law.
(d) The auctioneer's fee must be a reasonable amount stated in the
court's order. However, if the sale by use of an auctioneer has not been
agreed to by the creditors in the proceedings and the sale price is less
than the amount of the judgment and the costs and expenses necessary to the
satisfaction of the judgment, the auctioneer is entitled only to the
auctioneer's advertising expenses plus one hundred dollars ($100). The
amount due the auctioneer on account of the auctioneer's expenses and fee,
if any, shall be paid as a cost of the sale from its proceeds before the
payment of any other payment from the sale.
IC 32-29-7-5 The owner of the real estate subject to the issuance of....
The owner of the real estate subject to the issuance of process under a
judgment or decree of foreclosure may, with the consent of the judgment
holder endorsed on the judgment or decree of foreclosure, file with the
clerk of the court a waiver of the time limitations on issuance of process
set out in section 3 of this chapter. If the owner files a waiver under
this section, process shall issue immediately. The consideration for
waiver, whether or not expressed by its terms, shall be the waiver and
release by the judgment holder of any deficiency judgment against the
owner.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
