Foreclosure Law in Indiana

In New Haven, 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 usually 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 usually 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.

In all states in the U.S., including Indiana, borrowers have the option of foreclosure by judicial sale. This permits a court to oversee the sale of the property by the bank. The purpose of this is to get the house to sell for the highest price possible. While this might seem like something that would only benefit the bank, it is also a great benefit to the borrower, since it increases the likelihood that the sale will encompass the full balance of the mortgage, preventing them from having to pay it.

In many states, mortgages fall into a category of loans known as "non-recourse loans." This means that, if the house is sold by the lender, the entire debt is eliminated, even if the sale price was less than the remaining balance on the loan. While the loss of one's home can be personally devastating, treating a mortgage as a non-recourse loan at least means that the homeowner will be more or less free to move on with their life once the property is foreclosed and sold.

How to Possibly Avoid Foreclosure in New Haven, Indiana

Communication between you and your lender is perhaps the most significant way to prevent foreclosure. Ignoring the issue is guaranteed to be counterproductive. Honesty is the best policy when it comes to dealing with lenders.

You should remember that the bank doesn't really want your house. They authorized a mortgage hoping to make a profit from interest, and that's what they'd much rather do. They aren't in the business of buying and managing real estate. Therefore, banks will sometimes go to surprising lengths to accommodate your financial hardship, especially if it's temporary.

If you experience a sudden change in your financial situation, your lender, in an effort to keep you from defaulting, might be willing to accept lower monthly payments, at least temporarily.

In Indiana, some buyers have no choice but to resort to a short sale. This is simply the sale of the house, and using the funds to pay off the remainder of the mortgage. One benefit of a short sale is that, if the house sells for less than the mortgage balance, the remaining debt is discharged, and the borrower is free and clear.

Can a New Haven, Indiana real estate attorney help?

If you feel that your home is close to being foreclosed in New Haven, Indiana, and want to try to prevent this, the advice and assistance of an experienced real estate lawyer can mean the difference between keeping or losing your home.