Foreclosure Law in Indiana
In Fishers, Indiana, foreclosure is a process through which a lender that issued a mortgage loan retakes possession of the property that was bought with the mortgage in the event that the borrower has defaulted on his or her payments.
A foreclosure typically involves a forced sale of the house at auction, so the bank can recover at least some of the loss it has incurred as a result of the default. Banks typically want to rid themselves of the property as soon as possible, collect as much money as they can from the sale, and then move on.
Like every other state in the U.S., Indiana permits homeowners facing foreclosure to opt for a foreclosure by judicial sale. This is a procedure through which a court oversees the sale of the house by the lender. The purpose is to see that the lender takes reasonable steps to notify the public of the auction, and other steps to ensure that the house sells for the highest price possible. This is meant to protect the borrower, making it less likely that they'll have to pay a large deficiency judgment (the remaining amount due on the mortgage if the house sells for less than the remaining balance).
Some states treat mortgages as "non-recourse loans." A non-recourse loan is one that is secured by the borrower's property, but for which the borrower is not personally liable. Essentially, this means that a lender in a foreclosure can take the house that was mortgaged, but nothing else. If the house sells for less than the lender is owed, it cannot go after the borrower.
How to Possibly Avoid Foreclosure in Fishers, Indiana
It's quite important that you engage in continued communication with your bank. Lenders are surprisingly willing to make accommodations if it means they still get paid something, but in order to accommodate your case, they have to know about it.
You should be mindful of the fact that your bank wants you to make your monthly mortgage payments - they likely aren't scheming to trick you into giving up your home. This isn't out of altruism, it's due to the fact that foreclosure is almost never as lucrative for the bank in the long run than a mortgage that is paid in full over a period of years or decades, with interest accruing the whole time. For a bank, a foreclosure is just a last resort to cut their losses.
If your financial situation suddenly changes, your lender may be willing to change the terms of your loan, at least temporarily, permitting for lower monthly payments. If this means that they will be able to get some money from you, with default as the alternative, it can become an attractive option for everyone involved.
As a last resort, you might consider a "short sale," which results in loss of the home, but it typically leads to a great deal of the debt on the mortgage being forgiven. Typically, a short sale in Indiana involves selling the house for whatever price it can fetch. The proceeds from the sale go to the lender, and if it sells for less than what's left on the mortgage, the balance of the debt is forgiven.
Can a Fishers, Indiana real estate attorney help?
If you are worried that your Fishers, Indiana house is going to be foreclosed, and want to try and stop this, a reliable real estate lawyer can help.