HOUSE BILL No. 1487
DIGEST OF INTRODUCED BILL
Citations Affected: IC 32-29-7-3.5.
Synopsis: Foreclosure prevention. Requires a court, in a mortgage
foreclosure action with respect to an occupied dwelling, to consider
evidence concerning the effect of the foreclosure. Requires the court to
withhold entry of judgment in a foreclosure action for 180 days if the
court finds: (1) entry of a judgment of foreclosure will have a negative
effect on the occupant or neighborhood, or may lead to the house
becoming vacant; and (2) there is a reasonable possibility that
withholding entry of judgment in a foreclosure action will reduce the
Effective: July 1, 2013.
January 22, 2013, read first time and referred to Committee on Judiciary.
First Regular Session 118th General Assembly (2013)
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HOUSE BILL No. 1487
A BILL FOR AN ACT to amend the Indiana Code concerning
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 32-29-7-3.5; (13)IN1487.1.1. -->
SECTION 1. IC 32-29-7-3.5 IS ADDED TO THE INDIANA CODE
AS A NEW
SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2013]: Sec. 3.5. (a) This section applies only to a mortgage
foreclosure action filed with respect to a dwelling occupied by the
(b) Before entering a judgment in favor of the plaintiff in a
mortgage foreclosure action, the court shall, upon motion by the
defendant or upon the court's own motion, consider evidence
(1) the effect of foreclosure on the mortgagor;
(2) the effect of foreclosure on the neighborhood;
(3) efforts the mortgagor has taken to avoid foreclosure;
(4) the effect of foreclosure on the mortgagee;
(5) the mortgagee's plan for the property;
(6) whether the property will be vacant or abandoned after
the foreclosure; and
(7) any other effects that the foreclosure is likely to cause.
The court may consider evidence from the mortgagor, the
mortgagee, the Indiana housing and community development
authority (created by IC 5-20-1-3), a mortgage foreclosure
counselor (as described in IC 5-20-6-2), the representative of a
neighborhood homeowners or development group, and any other
person with relevant knowledge and experience.
(c) If the court finds that:
(1) entry of a judgment of foreclosure:
(A) will, more likely than not, have a negative effect on the
mortgagor or the neighborhood; or
(B) will, more likely than not, cause the property to become
vacant or abandoned; and
(2) there is a reasonable possibility that withholding entry of
a judgment of foreclosure may mitigate the negative effects
described in subdivision (1);
the court shall withhold entry of the judgment of foreclosure for
not more than one hundred eighty (180) days.
(d) If, during the period in which the judgment of foreclosure is
withheld, the property is sold to another person, the court shall
dismiss the foreclosure action.
(e) If, at the conclusion of the period during which the judgment
is withheld, the property has not been sold, the court shall enter the
judgment of foreclosure. However, the court may, for good cause
shown, extend the period during which judgment is withheld by not
more than ninety (90) days.
(f) A withheld judgment under this section does not affect:
(1) the debt owed by the mortgagor;
(2) the accrual of interest during the period in which the
judgment is withheld;
(3) the mortgage lien; or
(4) any other applicable contractual provisions.