Citations Affected: IC 32-29-8-4.
Synopsis: Mortgage foreclosures and junior lienholders. Defines
"interested person" as: (1) a holder of an evidence of debt secured by
a mortgage that is being foreclosed; or (2) an owner of real property as
grantee in a deed of conveyance executed and delivered by a sheriff.
Defines "omitted party" as a person: (1) who, before the
commencement of an action for the foreclosure of a mortgage on real
property, has acquired a record interest in the real property that is
junior to the mortgage or other lien being foreclosed and would
otherwise be extinguished by the foreclosure; and (2) who is not
included as a defendant in the judicial foreclosure action or is included
as a defendant in the judicial foreclosure action but is not served with
process or notice of sale. Allows an interested person or an omitted
party to bring a civil action at any time to: (1) determine the extent of
an omitted party's interest in real property; or (2) terminate an omitted
party's interest in real property; that is the subject of a judicial sale.
Provides that in the civil action, the omitted party's interest in real
property: (1) must be terminated by a decree in which the omitted party
is afforded redemption rights if the omitted party would have been
entitled to redeem under certain circumstances; and (2) is not subject
to termination if the omitted party proves the omitted party has a right
to receive proceeds that would be paid at the judicial sale. Provides that
an amount paid for redemption to an omitted party may not be less than
the sale price that results from the foreclosure of the interested person's
senior lien plus interest.
Effective: Upon passage.
January 11, 2012, read first time and referred to Committee on Judiciary.
A BILL FOR AN ACT to amend the Indiana Code concerning
proceeding or otherwise exercise any rights to redeem.
(2) Whether an interested person in good faith has made valuable improvements to the real property and, if so, the value of all lasting improvements made on the real property before the civil action was brought under this section.
(3) The taxes and assessments, with interest, paid by:
(A) the interested person; and
(B) those under whose title to the real estate the interested person claims.
An amount paid for redemption to an omitted party may not be less than the sale price that results from foreclosure of the interested person's senior lien plus interest at the legal rate. The court shall require payment of the redemption to be made not more than ninety (90) days after the date the interest of an omitted party is terminated under subsection (d).
(f) For purposes of this section:
(1) a senior lien that is the subject of a judicial sale is not extinguished by merger with the title to real property acquired by a sheriff's deed issued under IC 32-29-7-10 until the interest of any omitted party has been terminated:
(A) as provided under this section; or
(B) by any other operation of law; and
(2) until the termination of the interest of an omitted party:
(A) an owner of the real property as grantee in a sheriff's deed executed and delivered under IC 32-29-7-10; or
(B) any person claiming by, through, or under the owner;
is the equitable owner of the lien that is the subject of the judicial sale with all rights against an omitted party that existed before the judicial sale.
(g) The remedies provided for an interested person under this section may not be denied because the interested person:
(1) had actual or constructive notice of an omitted party's interest;
(2) was negligent in examining county records;
(3) was engaged in the business of lending; or
(4) obtained a title search, commitment, or policy.