Summary of Indiana Foreclosure Laws

The laws that govern Indiana foreclosures are found in Article 29, Chapter 7 of the Indiana Code

Indiana is a lien theory state.  This means the property acts as security for the underlying loan.  The mortgage is the document that places the lien on the property.  It is filed to evidence the underlying loan and the specific terms of repayment which are set forth in the promissory note.  There is no power of sale mortgage provision recognized in the Indiana Code.  In order to foreclose on a mortgage, the lender must go to court in what is known as a judicial foreclosure proceeding.  During this proceeding, the court will issue a final judgment of foreclosure.  The property would then be sold as part of a publicly noticed sale.

Before the property is sold at foreclosure sale, the sheriff must advertise the sale by publication once per week for three (3) consecutive weeks in a newspaper of general circulation.  The initial publication must be made thirty (30) days before the date of sale.  The borrower/homeowner must be served notice in accordance with the Indiana Rules of Trial Procedure governing personal service. 

Indiana doesn't have a post sale statutory right of redemption, which allows a party whose property has been foreclosed to reclaim that property by making payment in full of the sum of the unpaid loan plus costs. However, there is a pre-sale right to redemption after the issuance of the judgment.

A deficiency judgment can be obtained when a foreclosed property is sold at a public sale for less than the loan amount that the underlying mortgage secures. In this case, the borrower still owes the lender for the difference between what the property sold for at the foreclosure sale and the amount of the original loan.