When can a Mortgage Lender Foreclose in Indiana?

Foreclosure is a frightening prospect for Indiana families struggling to make ends meet. Fortunately, Indiana offers some protections for homeowners facing foreclosure. A mortgage lender cannot file to foreclose without first giving the homeowner notice, and lenders must follow the specific foreclosure process set out by Indiana’s notice of foreclosure laws.

Mortgage lenders cannot file to foreclose a home without first notifying the homeowner that their home is at risk of foreclosure. When a homeowner falls behind on their payments, the lender must notify them in writing that they have defaulted on their loan and might face foreclosure. Indiana law requires that a lender deliver a pre-foreclosure notice to a homeowner via certified mail at least 30 days before bringing a foreclosure suit against them. A pre-foreclosure notice is commonly referred to as a “breach letter.”

Indiana law requires that the pre-foreclosure notice contains four things. First, it must notify the homeowner that they are in default on their mortgage. Second, it must encourage the homeowner to try to obtain assistance from a mortgage foreclosure counselor. Third, it must inform the homeowner of their legal options including that they can (1) appeal a finding that their property is abandoned (if such a finding is made), (2) end foreclosure proceedings by paying off (redeeming) the mortgage balance they owe, or (3) retain possession of the property until the foreclosure sale so long as they continue living in the property and paying all taxes and homeowner’s association fees levied against it. Fourth and finally, the notice must provide the homeowner with the contact information for the Indiana Foreclosure Prevention Network.

You can probably expect the lender to file for foreclosure soon after delivering the pre-foreclosure notice to you. But there are two things to be aware of if you receive such a notice in the mail. First, the lender must wait 30 days after delivering the notice to you before filing to foreclose your home. You will have a full 30 days during which you can either pay off the mortgage balance or hire an attorney to help you negotiate an agreement with your lender to avoid foreclosure proceedings. Second, the notice must contain each of the four things listed above. If any are missing, the notice will not be valid, and the lender will not legally be able to foreclose on your home until they deliver a valid pre-foreclosure notice to you.

Homeowners who have fallen behind on their mortgage payments may avoid foreclosure by working out a foreclosure prevention agreement with their lender. If you are behind on your mortgage payments and are concerned that your lender may try to foreclose on your home, or if you have already received a pre-foreclosure notice in the mail, contact the experienced Indiana real estate attorneys at McNeely Law to discuss your options.

This McNeelyLaw LLP publication should not be construed as legal advice or legal opinion of any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.