Detailed Answer
Disclaimer: This article does not provide legal advice. It explains general principles under Indiana law. Consult a licensed attorney for personalized guidance.
1. Understand Indiana’s Foreclosure Process
In Indiana, a lender starts a foreclosure by filing a complaint under Indiana Code § 32-30-10 (Foreclosure; Complaint; Notice). The court sets a hearing date after notifying the borrower at least 30 days before the hearing. At this hearing, the court may enter a judgment ordering a sheriff’s sale.
2. Confirm Ownership Interests and Title Status
Jointly owned property typically holds title as tenants in common or joint tenants. Verify your co-ownership type by reviewing the deed. Obtain a title report to identify existing liens, mortgages, and tax obligations. Clearing up junior liens or unpaid taxes helps speed up a sale and maximizes the net proceeds.
3. Coordinate with Your Co-Owners
All title holders must approve listing the property. If one co-owner cannot participate, consider a limited power of attorney to allow another co-owner or an agent to act on their behalf. Indiana Code does not require unanimous consent for a foreclosure sale, but sale proceeds distribution depends on each owner’s share.
4. Engage the Lender Early
Contact the lender to explore alternatives: a short sale, loan modification, or deed in lieu of foreclosure. Request a postponement of the foreclosure hearing to allow time for marketing and closing. Many lenders will grant one postponement if you share a bona fide sales contract.
5. Prepare the Property for Market
- Perform a pre-listing inspection to identify major repairs.
- Complete cosmetic updates (paint, landscaping, deep cleaning).
- Stage the home to attract buyers and justify a stronger sales price.
- Include clear disclosures for known defects to avoid post-closing disputes.
6. List and Contract for Sale
Hire a real estate agent familiar with distressed sales. Set a realistic price based on a current market analysis. Once you receive an offer, present it to all co-owners and the lender. A signed purchase agreement can convince the lender to delay or cancel the hearing.
7. Close the Sale Before the Hearing
Coordinate with a title company or real estate attorney to clear title and distribute proceeds. Pay off the mortgage, junior liens, and closing costs. Indiana Code § 32-30-10-9 (Sale After Decree; Distribution) governs surplus distribution. After closing, notify the court and lender to dismiss the foreclosure action.
Helpful Hints
- Start discussions with co-owners and the lender as soon as possible.
- Secure a pre-listing inspection to budget for repairs accurately.
- Keep all co-owners informed of offers and lender communications.
- Request a single hearing postponement in writing to your lender.
- Work with professionals (agent, attorney, title company) experienced in distressed sales.
- Retain copies of all notices, contracts, and court filings.