Pursuant to Indiana House Enrolled Act No. 1122, Section 3, the Pre-Suit Notice required under IC §32-30-10.5-8, under which a lender must send a homeowner a Pre-Suit Notice via certified mail, return receipt requested, on a form prescribed by the Indiana Housing and Community Development Authority (IHCDA), at least thirty (30) days prior to filing a foreclosure action against the homeowner, has been revised.

To provide ample lead time to lenders to adopt the revised Pre-Suit Notice, IHCDA has now adopted a FINAL version of the notice, as revised, to comply with the terms of HEA 1122. Under Indiana law, the effective date of this Notice is January 1, 2011. However, we recommend that the revised pre-suit notice be adopted and used, as soon as it is feasible for the revised notice to be incorporated into your system, but definitely no later than January 1, 2011. To view a copy of the revised pre-suit notice, go here.

Basically, HEA 1122 requires that in addition to the advisements already contained in the current pre-suit notice, we are also to inform the debtors that if the creditor files a foreclosure and obtains judgment, they (debtors), prior to the sale of the property, have a right to: 1) Appeal a finding of abandonment by the court; 2) Redeem the real estate from judgment prior to sale by paying the amount of judgment, interest, and costs for the payment or satisfaction of which the sale was ordered; and 3) That the debtors have a right to retain possession of the property, rent free, until the foreclosure sale if the owner continues to pay the taxes and special assessments levied against the property, and if the debtors in the judgment of the court do not commit waste or other damage to the property.

The above additional advisements are statutes, already in effect, but they must now be included in the new pre-suit notice.

Another change to the foreclosure process in Indiana, approved by HEA 1122, is that an enforcement authority that has issued an abatement order for a vacant or abandoned structure, may under certain conditions, file a praecipe for the sale of the property with the clerk of the county after 180 days elapse from the date a foreclosure judgment and decree is filed, if the party that is entitled to enforce the judgment has not itself filed a praecipe.

If you have any questions on this information, please contact Mr. Zarksis V. Daroga, Esq. Zarksis is an associate in the Real Estate Default Group of the Cincinnati office focused on foreclosure services for Weltman, Weinberg & Reis Co., L.P.A. He can be reached at 513-333-4075 or via email at zdaroga@weltman.com.