Changes in Indiana Foreclosure Procedures

By Zarksis Daroga, Esq.

As a result of Senate Bill 582 (SB 582), the Indiana legislature has made several procedural changes as to the foreclosure process effective July 1, 2011. These changes include the following:

  • For all residential foreclosure actions filed after June 30, 2011, the lender must provide to the Court, at the time of filing the foreclosure complaint, the debtors’ most recent contact information, such as phone number, e-mail address, and last known property address, if different than the mortgaged property address. Currently, WWR provides this information to several counties in Indiana, including Lake and St. Joseph Counties. This basically makes it an across-the-board requirement for all counties.
  • After June 30, 2011, the language regarding the debtor’s right to a settlement conference is to be included on the first page of the summons that is to be issued with the foreclosure complaint. Currently, the settlement conference notice is included as a separate page to the foreclosure complaint. The Courts are to also send a separate settlement conference notice to the debtor, upon the filing of the foreclosure complaint. Additionally, SB 582 charged the Indiana Housing and Community Development Authority (IHCDA) with drafting the settlement conference notice language that is to be included on the first page of the summons. Per the bill, IHCDA is required to post that new language on its website on or before June 1, 2011. Once IHCDA posts the required information on its website, WWR will incorporate the same in our summons for all foreclosure cases filed after June 30, 2011.
  • If after receiving the settlement conference notice, a debtor requests a settlement conference with the court, the request is treated as an official appearance by the debtor in the foreclosure case. WWR will be required to move for summary judgment instead of default judgment in cases where the settlement conference was unsuccessful.
  • Once the debtor requests a settlement conference, the Court will stay the granting of any dispositive motions in the foreclosure case until the Court receives notice that the settlement conference concluded and that the parties have either entered into a foreclosure prevention agreement or were unable to agree on the terms of an agreement.
  • SB 582 charges IHCDA to come up with a prescribed list of loss mitigation documents to use in foreclosure cases, on or before June 1, 2011. The bill also authorizes the IHCDA to amend this list in response to any changes in the federal loan modification programs, or as IHCDA deems otherwise to be necessary. WWR will provide the loss mitigation documents list to our clients, as soon as it is posted by the IHCDA.
  • In all residential foreclosure cases after June 30, 2011, where the debtor requested a settlement conference, the debtor is required to provide to the creditor’s attorney and the court with a complete package of the loss mitigation documents, as provided by the IHCDA, by certified mail at least 30 days prior to the settlement conference. The creditor is required to provide the debtor a copy of the payment history via certified mail, substantiating the debt, plus an itemization of all amounts owed (payoff statement), at least 30 days prior to the settlement conference.
  • Any cost associated with the settlement conference, or any fines imposed by the courts on the lender for violating a court order, may not be forwarded or passed onto the debtor. 
  • SB 582 authorizes the courts in foreclosure cases where the debtor continues to occupy the property, to require the debtor to make monthly payments. These payments are to be based on the debtor’s ability to pay, may not exceed the debtor’s monthly payments under the terms of the mortgage, the payments shall be held in trust for the parties by the clerk of the court, and payments can only be disbursed upon order of the court. Payments will be disbursed to the creditor if a foreclosure prevention agreement is reached or if the case proceeds to judgment, and the debtor shall receive a credit for any payments disbursed.
  • SB 582 allows a non-owner of a property to come onto the property in order to visually inspect the property to see if it has been abandoned or vacated. If that individual feels that the property is abandoned or vacated, he/she may contact the necessary authorities and will be immune from any civil liability for trespassing due to the inspection.
  • In addition to the changes made by SB 582, the Indiana House of Representatives also amended the same foreclosure statute in HB 1024 by requiring creditors to mail a copy of the foreclosure complaint, via certified mail, to the last known address of the insurance company for the property being foreclosed. The statute also states that the creditor will not be subject to any penalty, or the foreclosure proceeding will not halt if the creditor does not mail the complaint to the insurance company.

WWR will comply with this amendment and mail a copy of the foreclosure complaint to the last known insurance company, but we will have to rely on that information from the lender. As such, I suggest that if at all possible, the information be obtained from the debtor either at the closing or during any loss mitigation negotiations, prior to the foreclosure being filed.

It is very helpful for lenders to provide foreclosure counsel with the most up-to-date contact information possible on debtors, at the time of the referral. Lenders should be ready to respond to increased requests for payment histories and itemized breakdowns of all amounts owed.

If you have any questions on this matter, please contact Zarksis Daroga, Esq. Zarksis provides foreclosure services as an associate in WWR’s Integrated Real Estate Default Group and is based in the Cincinnati office.  He can be reached at 513.333.4075 or


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