If you’re not making mortgage payments and are in default, it’s time to talk to a foreclosure attorney. You need to know your legal rights in order to make well-informed decisions about what you should do next. Depending on the circumstances, you may keep your house, or your best option may be to leave it behind and start over.
When you’re overwhelmed by trying to make mortgage payments and don’t know what to do next, lawyer and CPA Jerry E. Smith can be the shelter in your financial storm. Our law firm helps consumers solve their debt problems, including foreclosure issues. We’ll provide hope, help, and peace of mind.
If you stop making mortgage payments, the loan servicer (who works for the lender) will begin the foreclosure process. Indiana requires lenders to file a legal action in court to foreclose. State laws spell out the process, while both federal and state laws give you rights and legal protections while it happens.
When you get a loan to buy your home, you’ll probably sign a promissory note and a mortgage. The promissory note is your agreement to pay the loan, and the mortgage gives the lender a security interest in your property. If you stop making payments, the mortgage gives the lender the right to sell your home through a foreclosure sale to get back at least some of the money it loaned you.
If your situation is at the point where you may lose your house, you should consider filing for bankruptcy. It may give you many benefits, including stopping a foreclosure sale. After you file for bankruptcy protection from your creditors, there’s an automatic stay that temporarily blocks the lender from foreclosing on your home or trying to collect its debt.
A Chapter 7 bankruptcy may delay the foreclosure for months. It involves selling your assets (including, possibly, your home) to pay your debts. If you want to keep your home and the equity you created, Chapter 13 bankruptcy may be the answer. You may be able to limit or end other debts, so your mortgage payments are more affordable.
Another way to avoid the foreclosure process, though you would lose the house, is a deed in lieu of foreclosure agreement. The lender may agree to accept the deed to your property instead of going through the foreclosure process to get the title to it.
If your house’s fair market value is less than what you owe, the lender may try to get the difference from you through a deficiency judgment. If that’s ordered by a judge, you’d be obligated to pay it. To avoid this, part of the agreement between the parties must also be that the lender won’t pursue you for this deficiency in exchange for the deed. The lender agrees that the transaction fully satisfies your debt.
In an Indiana foreclosure, you’ll probably have a right to:
If you miss a few payments, the servicer will probably send you letters and call you to try to collect what you owe. Federal laws may require it to contact you by phone to inform you of foreclosure alternatives (or “loss mitigation”). Later you would get a written notice of help you may get. You would also be assigned someone to try to help you.
Many mortgages in Indiana require the lender to send you a breach letter after you fall behind. It puts you on notice of the fact that your loan is in default. If it’s not cured, the lender can accelerate the loan and start the foreclosure process.
In most cases, under federal law, the loan must be more than 120 days delinquent before the foreclosure can start, though it may start sooner, depending on the situation (12 C.F.R. § 1024.41). During this period, you can submit a loss mitigation application to the servicer. In it, you could ask for help through a repayment plan, a forbearance agreement, or a loan modification.
If this is your primary residence, the lender must mail you a pre-foreclosure notice at least 30 days before filing a foreclosure action. This notice should:
After the foreclosure action is filed, you’ll be served with a summons and a complaint. With our help, you should respond to the complaint. If you do nothing, the court may declare you to be in default, and your home will be on the fast track to being sold. Just participating in the process can give you more time to find a way to pay your mortgage or at least find another home.
You should get a notice about a foreclosure settlement conference where the parties can try to come up with an alternative, like a loan modification. You can ask for one 30 days after you’re served with the complaint (Ind. Code § 32-30-10.5-8).
If the material facts of your situation aren’t disputed, the lender may ask the judge for summary judgment. If the judge agrees, the lender will get a decision in its favor and your home will be ordered to be sold. If there are disputed facts, there can be a trial. If you lose, there’ll be an order to sell your home. Unless there’s a reason to appeal the decision, the process will move forward.
Depending on the facts, some defenses to a foreclosure action include:
Before your house is sold, the sheriff must post a notice of the sale at the courthouse. It will be advertised in a newspaper for three weeks. This published notice must start at least 30 days before the expected sale. You must also get a copy of the notice of sale when the first advertisement is published (Ind. Code § 32-29-7-3).
You may be able to reinstate your mortgage before the sale. This means you pay what you missed, making the loan current, including principal, interest, fees, and costs. If you can do this before the judge enters judgment for the lender, this would stop the sale, and the court would have to dismiss the foreclosure. If it’s between the judgment and the sale, the sale must be postponed, but can start again if you miss another payment (Ind. Code § 32-30-10-11).
In most cases, the foreclosure sale can’t occur until at least three months have passed after the complaint was filed (longer if your mortgage was before July 1, 1975) (Ind. Code § 32-29-7-3). The process ends with the sale of your home. Your lender will probably bid on it, using the amount you owe as a “credit bid” rather than using cash. If there are multiple bidders, the one with the highest bid buys the property.
If the winning bid isn’t enough to pay all you owe, the lender may seek a legal judgment against you (a deficiency judgment) for the deficiency balance (the difference between the sale price and your debt). You can prevent this if you can accept your house’s sale earlier than the three-month period required by state law. If you agree in writing to waive this waiting period, with the lender’s consent, it can’t get a deficiency judgment. It will be unable to try to collect from you any loss on the foreclosure (Ind. Code § 32-29-7-5, § 32-30-10-7.)
As you can see, this is a very technical area of law. There are many deadlines and notices, and both sides have legal rights they will defend. Your home and the money you’ve invested in it are at risk. Given all that’s at stake, you should hire Jerry E. Smith to defend your interests, represent you in court, and negotiate the best possible outcome on your behalf.
Foreclosures are complex, and making the wrong move at the wrong time can seriously hurt your case. You must find a lawyer who has represented many homeowners facing foreclosures in different situations. Every case is unique. What may not work in another case may help you keep your house. You need an attorney who knows all the ways a foreclosure action can be defended and what may work in your case. Given that bankruptcy may be a good choice for you, this attorney should also know bankruptcy laws and processes. Most of all, you need a lawyer you feel confident in, that you trust, and are comfortable working with.
A foreclosure lawyer will treat you with respect and listen to your side of the story. Many people facing financial hardships feel shame and blame themselves for their family’s situation. We understand what you’re going through. We will support you so you can start a new chapter in your life. You have legal rights like anyone else, and they should be protected.
In evaluating each case, Jerry Smith looks at all the issues from both sides — the claims the lender will make and the defenses you may have. He will come up with a tailored strategy, because each case is different. Jerry will also negotiate with the lender on your behalf and be a tough advocate for you in court.
Depending on your situation, we can charge a flat fee, an hourly rate, or a monthly fee for as long as the case continues. You would also be responsible for fees and costs like mailing, travel expenses, and court costs.
Our office can’t delay your case just for the sake of delay. We need the facts and law to be on our side before we can take action in court or argue your side to the lender. While defending your rights and interests, the foreclosure process may be delayed. How long that delay may be depends on the strengths of your defenses and the problems the lender may have with its case. Compared to representing yourself and not participating in the legal process, our work may result in a delay in selling your house for months or years.
Delay may or may not be a good thing for you. For most debtors, it is. But depending on the facts and the parties’ interests and priorities, through negotiations, you might obtain something valuable by agreeing to shorten the process.
Indianapolis foreclosure attorney Jerry E. Smith and his legal team have helped hundreds of people facing the same financial difficulties you are, including those facing foreclosures. We encourage individuals to see this opportunity as a fresh start. You may not feel like it now, but getting through a foreclosure may be a step toward a brighter financial future.
Find out more about how our Indiana foreclosure lawyers can help you by contacting us today at (317) 917-8680. We offer a free initial consultation of up to one hour. We’ll stand beside you every step of the way.