If a property owner fails to make mortgage payments as required, the lender may foreclose on the property. In foreclosure proceedings, the property may be sold at a sheriff’s sale to repay the lender. Those involved in this process or at risk of foreclosure should be aware of changes made to the law on Indiana sheriff sales.
Indiana Code § 32-29-7-3 sets forth the requirements and process for foreclosed property to be sold at a sheriff’s sale. The sheriff’s sale is a public auction conducted by the sheriff of the Indiana county where the mortgaged property is located. When the property is sold at a sheriff’s sale, the highest bidder immediately takes ownership and possession.
The Indiana legislature passed legislation in 2022 that changed the sheriff sale process for mortgage foreclosures. If you are facing foreclosure, it is vital that you understand the new law and how it may affect your legal options.
The Process of Indiana Sheriff Sales
Under Indiana law, if the property owner fails to make payments as agreed upon, the mortgage lender can file a foreclosure action. Filed against the property owner, this action seeks to secure the payments owed by forcing the sale of the pledged collateral, the real estate. The court must serve the property owner or borrower with the suit and notice of the hearing date.
At the hearing, the court will determine if all requirements have been met for the property to be foreclosed upon. If the court rules in favor of the mortgage lender, a certified copy of the judgment must be delivered to the sheriff in the same jurisdiction.
The sheriff must have a certified judgment of foreclosure in favor of the mortgage lender before Indiana sheriff sales may be scheduled. Under Indiana Code § 32-29-7-3, such a sale generally takes place no earlier than three months after the filing of the complaint for foreclosure. Once the creditor obtains a foreclosure judgment, the sheriff may set a date for the sheriff’s sale and begin taking the required steps to sell the property at a public auction.
Mortgage Foreclosure at Indiana Sheriff Sales
Before the property can be sold at sheriff sale, the sheriff must advertise the sale in a newspaper once per week for at least three weeks, and the first advertisement must occur at least 30 days prior to the sheriff’s sale.
Once the required advertising is complete and the Indiana sheriff sale date arrives, the property is generally sold to the highest bidder at a public auction. Such auctions might take place at the courthouse or in another local government building and were traditionally conducted as an in-person, public auction.
It usually takes between 150 and 200 days to execute foreclosure in Indiana. However, if the borrower contests the foreclosure or files for bankruptcy protection, the foreclosure process could take much longer.
The 2022 Changes to Law on Indiana Sheriff Sales
In 2022, the Indiana legislature passed Indiana House Bill 1048, which made important changes to the existing sheriff sale law. The changes under the new law include the following provisions:
- The new law permits a sheriff sale in Indiana to be conducted electronically. Under the amended law, Indiana sheriffs are permitted to conduct the public auction electronically and receive payment from the highest bidder electronically.
- The sheriff may charge an administrative fee of $300, which is an increase of $100 from the prior allowed fee of $200.
- The new law does not apply to mortgage holders of unsafe, vacant, or abandoned property.
- Those owing delinquent taxes, special assessment, etc., may not bid on the foreclosed property.
- Foreign business associations may not bid on the foreclosed property unless specific conditions are met.
What Happens after a Sheriff Sale?
When a property is sold at an Indiana sheriff’s sale, the highest bidder becomes the new owner of the property. Indiana law determines what happens after a sheriff sale and sets forth the procedure for transferring the property after the sale.
According to Indiana Code §32-29-7-10, after a sheriff’s sale due to foreclosure takes place, the sheriff shall immediately execute a deed of conveyance for the property and deliver that deed to the purchaser. The sheriff must also record the deed with the recorder in the Indiana county where the property is located. However, if the mortgage loan was secured by the US Department of Housing and Urban Development (HUD), the sheriff is not required to record the deed with the county recorder.
When to Contact an Indiana Foreclosure Lawyer
Preventing or managing the process of foreclosure to minimize damages to your personal finances requires an understanding of the ever-changing laws and procedures involved. An Indiana foreclosure lawyer with experience in bankruptcy and other areas of Indiana law that impact financial matters can help you assess your options and determine the best path forward, then represent and counsel you throughout the process.
If you are facing loss of your home via Indiana sheriff sales for property foreclosure, contact Carmel Fishers foreclosure lawyer, Julie Camden at Camden & Meridew, P.C. by completing the firm’s online contact form or calling 317-770-0000.