The prospect of losing your home or other property to foreclosure is upsetting, to say the least. Knowing your options and the pros and cons of various foreclosure solutions can help you feel more in control of your financial situation. If you are in danger of foreclosure in Indiana, you need a foreclosure defense attorney who is well-versed in the state’s foreclosure laws and can help you determine how to stop foreclosure in Indiana in a way that best preserves your assets and dignity.
Understanding How to Stop Foreclosure in Indiana
There is a lot to consider when it comes to foreclosure solutions. Indiana foreclosure laws, federal regulations, tax implications, the specific protocols and practices of your lender, and the details of your unique situation all must be taken into account to solve the complex problem of identifying the best way out of an impending foreclosure. Knowing how to stop foreclosure in Indiana and being able to stop this form of debt collection are two different things, but understanding the basics is essential to making the best decision for your situation.
Indiana Foreclosure Laws and Timelines
To find out how to stop foreclosure in Indiana, you must first understand how foreclosure actions proceed in general. The first step to evaluating Indiana foreclosure solutions is to understand Indiana foreclosure laws and the related timelines that apply to the process, from pre-foreclosure through auction.
Where you are in the foreclosure process will impact the solutions available. In many cases, it is better to take action sooner than later to ensure the least damaging result. Discussing your options with a foreclosure defense attorney as soon as possible in the foreclosure process can save time, money, and maybe even your home.
How to Stop Foreclosure in Indiana: Eight Foreclosure Solutions to Consider
As mentioned earlier, there are many variables when considering how to stop foreclosure in Indiana. Whether or not foreclosure or the loss of your home can ultimately be avoided, there are often alternative foreclosure solutions that can help you reach the other side of the experience in a more dignified and less financially damaging way.
1. Settlement Conference
Under Indiana foreclosure laws, a lender must notify a property owner of default before any foreclosure action can occur. A homeowner has a right to request a settlement conference with the lender (or a representative of the lender) for the purpose of discussing potential alternative foreclosure solutions.
2. Loan Modification
A loan modification redefines the terms of your loan and related mortgage. It is an arrangement that is agreed upon by you and your mortgage company. This is one of the potential solutions that could be identified in a settlement conference, and it can be an excellent solution if you are eligible and your lender is willing to negotiate in this way.
A note on loan modification: beware of scams and predatory practices by so-called loan modification companies. Consultation and assistance from a foreclosure defense attorney or certified mortgage counselor are safer bets.
3. Forbearance Agreement
Your lender might also agree to a forbearance agreement. This arrangement suspends your payments or reduces the amount due for an agreed-upon period of time. This can be beneficial if the factors leading your financial distress and inability to pay your mortgage are temporary in nature. If that is not the case, a forbearance agreement might not be ideal, as it requires repayment of principal, taxes, interest, and other fees that accumulate during the time period of the relief.
4. Short Sale
Short sales were popular during the housing crisis of the early 2000s, but use of this option has decreased since then. In a short sale situation, the lender agrees to accept less than is due on a remaining mortgage, enabling the homeowner to reduce the selling price and have a better chance of selling the home and relieving the related debt.
5. Deed in Lieu of Foreclosure
In this voluntary agreement, the homeowner turns over the deed to the home to the lender. In exchange, the remaining debt of the mortgage is forgiven. It is important to note that the homeowner does not retain the home or the privilege of living in it after the deed is surrendered. However, a deed in lieu of foreclosure solution does relieve the debt, avoids extended legal proceedings, and allows the homeowner to exit the situation with more dignity and privacy than a foreclosure.
6. Mortgage Servicing Errors
Lenders sometimes make mistakes that can lead to problems with your mortgage. For example, in 2018, a Wells Fargo software error led to 870 homeowners being improperly denied loan modifications and the initiation of 545 erroneous foreclosures. Other potential causes of mortgage servicing errors include the following:
- Incorrect application of credits to your account;
- Improper fees or other charges;
- Faulty management of escrow, taxes, or insurance payments; and
- Dual tracking, where the lender or its servicer proceeds with foreclosure while simultaneously working to help the borrower avoid foreclosure.
When mortgage servicing errors occur, it is highly recommended that you consult with a foreclosure defense attorney who can help you collect evidence of the errors and determine the appropriate course of action under Indiana foreclosure laws.
7. Payment of Judgment and Fees
After a court has entered a decree of foreclosure and judgment of default, you still have an opportunity to stop foreclosure in Indiana by paying the judgment amount plus interest and associated fees. Before the county clerk issues an order for a sheriff sale, the payment is made to the county clerk’s office in the county where the foreclosure action was filed. If the clerk has already issued an order for sale of the property at auction, the payment is made to the county sheriff. This foreclosure solution allows you to retain your home; however, it is not an option for many because it requires a lump sum payment.
Filing for Chapter 7 or Chapter 13 bankruptcy can temporarily or, in some cases, permanently stop the foreclosure process. How long and how effectively bankruptcy can prevent foreclosure depends on the specifics of your financial situation, which type of bankruptcy filing you pursue, and other factors.
Lenders are able to file a motion to proceed with foreclosure despite a bankruptcy filing, so this foreclosure solution does not always guarantee that the foreclosure will not proceed.
Bankruptcy can be filed up to the day before your home is sold at auction. However, early action is generally best, and a foreclosure defense attorney, especially one who also has a bankruptcy practice, is recommended to assist you in evaluating your next best steps related to bankruptcy and foreclosure.
When Is It Too Late to Stop Foreclosure?
So, when is it too late to stop foreclosure, really? While taking action early to preserve your home and other assets is definitely preferable, it is not too late to stop foreclosure under Indiana foreclosure laws until your home is sold by the county sheriff at auction. Once another person or entity has purchased the home, that person or entity takes immediate ownership, and you can be evicted from the property.
A foreclosure defense attorney can help you understand how to stop foreclosure in Indiana, or at least minimize its effects, in the way that best suits your financial situation and preferences. It is possible to emerge from foreclosure with your dignity and financial security intact. Attorney Corey Meridew of Camden & Meridew, P.C. can help you evaluate your personal foreclosure solutions. To schedule a consultation, call 317-770-0000 or complete the firm’s online contact form today.