Indiana Law Regarding Foreclosures
In Indiana, the mortgage company initiates a foreclosure by filing a lawsuit in court. The borrower is served with a copy of the complaint and summoned by a sheriff. The borrower then has approximately 20 days to file an answer with the court. If the homeowner does not file an answer, the court will assume the homeowner does not dispute the mortgage company’s claims and will most likely enter default judgment against the homeowner. If the homeowner files an answer refuting the mortgage company’s claims, the court may take further action before ruling and issuing an order or judgment.

How a Sheriff’ Sale Works

If the court grants a judgment to the mortgage company, the sheriff will be given an order to auction the home at a sheriff sale.

What a Homeowner should know about a Sheriff’s sale

It is important that the homeowner understand that just because a foreclosure action has been filed, it is NOT too late for the homeowner to try to negotiate a plan to prevent the homeowner from losing the home.

There is generally a three-month waiting period between filing foreclosure and sale of the home.

The sheriff will schedule a sale date and advertise the sale of the home once per week for three consecutive weeks, with the first advertisement at least thirty days prior to the schedule sale date.

The homeowner should be served with a copy of the first advertisement.

The sheriff sale is open to the public and will be held at the designated location listed on the notice.

The sheriff will report the results of the sale to the court, and the mortgage company will then ask the court to confirm the sale.

When the court approves the sale, it will order a new deed for the buyer and distribute the money from the sale.

It is possible that the homeowner may still owe a deficiency judgment if the sale price is not enough to cover the existing mortgage and costs related to the foreclosure.

When the sheriff sale is approved, the buyer is entitled to possession and can ask the sheriff to evict the homeowner.

The buyer does not have to notify the homeowner that he or she is asking the sheriff to remove the homeowner from the home.

It is recommended that the homeowner secure alternative housing and move all of his or her possessions out of the home prior to the sheriff sale. Visit the resource section  for information about housing solutions.

Additionally, the homeowner has the right to remain in the home until ordered to vacate by a court.

Depending on the specific result, a foreclosure action may result in a taxable event for the homeowner and, therefore, the homeowner should seek professional tax advice following the final order in a foreclosure action.