No Surprise: Report Concludes That Nation's Foreclosure Activity Dropped To All-Time Low In 2021

From IT News Online:

IRVINE, Calif., Jan. 13, 2022 /PRNewswire/ -- ATTOM, licensor of the nation's most comprehensive foreclosure data and parent company to RealtyTrac, the largest online marketplace for foreclosure and distressed properties, today released its Year-End 2021 U.S. Foreclosure Market Report, which shows foreclosure filings— default notices, scheduled auctions and bank repossessions — were reported on 151,153 U.S. properties in 2021, down 29 percent from 2020 and down 95 percent from a peak of nearly 2.9 million in 2010, to the lowest level since tracking began in 2005.  Click here for the rest of the article.  

Indianapolis Bar Association COVID Update: Marion County Courts

Courtesy of the IBA today:

Updated COVID Marion Superior and Circuit Court Measures regarding Facial Coverings and Suspension of Jury Trials

The Executive Committee of the Marion Superior Court and the Judge of the Circuit Court have continued to monitor local numbers regarding increase in COVID positive cases.

The statewide Resuming Court Operations Task Force has continued to provide guidance to courts across the state on how to maintain court operations in light of the ongoing public health emergency. As of November 10, 2020, the Indiana Supreme Court, in 20S-CB-123, provided guidance to trial courts on minimizing the risk of exposure to COVID to court staff, litigants, attorneys and members of the public. In the Order, the Indiana Supreme Court reiterated that trial courts have inherent authority to suspend and/or reschedule criminal or civil jury trials for a limited time.

At this time, all jury trials in Marion County will be continued and reset after January 21, 2022. Additionally, facial coverings will be required and occupancy capacity will be limited in all areas of the courthouse. The proper use of facial coverings will be strictly enforced.

Click here to view the order regarding facial coverings.
Click here to view the order regarding the continuance of jury trials.

It's currently unclear whether there will be a ripple effect from the continuances this month, which is to say we don't know for certain whether jury trials currently set after the 21st will be impacted.  This likely will unfold on a case-by-case basis.  



Damages Under Indiana’s UCC For Breaching The Peace: Treatment Of Deficiency

Lesson. A Borrower’s UCC damages arising out of a secured lender’s breach of the peace can be reduced by the loan deficiency, assuming the disposition of the collateral was commercially reasonable.

Case cite. Horizon Bank v. Huizar, 2021 Ind. App. LEXIS 317 (Ct. App. Oct. 13, 2021)

Legal issue. Whether Borrower’s damages under Indiana Code § 26-1-9.1-625(c)(2) can be reduced be a deficiency owed under the loan.

Vital facts. Please review my 12/10/21 post, which discusses the liability aspects of the Huizar case and serves as an introduction to today’s post.

Following the repossession, Lender sold the vehicle at an auction house that had been in existence for at least twenty-six years. Lender’s employee testified that he had attended such auctions for that period of time and determined when prices will be accepted. In this case, the vehicle sold for $16,000, which left a deficiency of $7,679.08 on the loan amount.

Based upon the trial court’s reading of the applicable Indiana statute, the trial court calculated Borrower’s damages based upon the underlying facts:

10% of amount financed: $2,276.79 ($22,676.93 x .10)
+ a finance charge: $8,482.32
= $19,759.11

The court then reduced that amount by $7,679.08 (the deficiency), which the court rules “was part of [Borrower’s] relief.” The final result was an award of UCC damages of $3,080.03.

Procedural history. The trial court found that Lender’s auction of the repossessed vehicle was conducted in a commercially reasonable manner. In turn, the court applied the deficiency amount of $7,679.08. Borrower appealed those aspects of the trial court’s judgment.

Key rules.

    UCC Damages Statutes.

I.C. § 26-1-9.1-625(b) states: “a person is liable for damages in the amount of any loss caused by a failure to comply" with the UCC.

"Damages for violation of the requirements of [the UCC] are those reasonably calculated to put an eligible claimant in the position that it would have occupied had no violation occurred." I.C. § 26-1-9.1-625, cmt. 3.

I.C. § 26-1-9.1-625(c)(2) provides that, if the loan collateral is consumer goods, then the debtor may recover "the credit service charge plus ten percent (10%) of the principal amount of the obligation or the time-price differential plus ten percent (10%) of the cash price."

However, secured lenders are not liable under section 625(c)(2) more than once with respect to any one secured obligation. I.C. § 26-1-9.1-628(e).

    Disposition (Liquidation) Laws.

Under the UCC, secured creditors have the burden of establishing that the disposition of the collateral was proper. I.C. § 26-1-9.1-626(2).

Under I.C. § 26-1-9.1-627(b), disposition is made in a commercially reasonable manner if made:

  1. in the usual manner on any recognized market;
  2. at the price current in any recognized market at the time of the disposition; or
  3. otherwise in conformity with reasonable commercial practices among dealers in the type of property that was the subject of the disposition. 

Subsection (b) states that: “the fact that a greater amount could have been obtained . . . is not of itself sufficient to preclude the secured party from establishing" that the disposition was commercially reasonable.”

Indiana cases provide that collateral sold in the usual manner in a recognized market for such goods is presumed to be proper. Under Indiana law, “a sale or disposal of collateral to a dealer or on a wholesale market or auction” is deemed to be commercially reasonable.

Holding. The Indiana Court of Appeals affirmed the trial court’s UCC damages award.

Policy/rationale. Borrower argued that the UCC’s minimum statutory damages under I.C. § 26-1-9.1-625(c)(2) cannot be reduced. Based upon the UCC and Indiana case law, however, the Court rejected the argument. The Court reasoned that, by not reducing the damages, Lender would be penalized through an automatic forfeiture of the deficiency judgment. In other words, Borrower would receive a kind of windfall.

Borrower next contended that his damages could not be reduced because Lender failed to prove it was entitled to a deficiency. The Court pointed out that that the vehicle was sold at auction, with no evidence that Lender executed the sale in bad faith. Accordingly, the Court determined that the trial court did not abuse its discretion in finding that the deficiency judgment was commercially reasonable.

Related posts.

I represent judgment creditors and lenders, as well as their mortgage loan servicers, entangled in loan-related disputes. If you need assistance with a similar matter, please call me at 317-639-6151 or email me at Also, don’t forget that you can follow me on Twitter @JohnDWaller or on LinkedIn, or you can subscribe to posts via RSS or email as noted on my home page.

Liability Under Indiana’s Uniform Commercial Code For Breaching The Peace

Lesson. A Lender (secured creditor) could be exposed to liability for breaching the peace (“disturbing the public tranquility or order”) if it refuses to halt a repossession after a borrower voices an objection to the seizure.

Case cite. Horizon Bank v. Huizar, 2021 Ind. App. LEXIS 317 (Ct. App. Oct. 13, 2021)

Legal issue. Whether Lender’s agents breached the peace during the repossession of Borrower’s vehicle.

Vital facts. After a payment default, Lender, through agents, repossessed a vehicle owned by Borrower that served as collateral for the loan. The agents went to the home of Borrower and his girlfriend, and found the vehicle backed into the driveway. Here’s what went down:

[Agent] went to [Borrower’s] front door and informed [Borrower] that he was there to repossess the vehicle because [Borrower] was behind on payments. [Agent] then showed [Borrower] the contract as the basis for the repossession. [Agent] testified that he could have just taken the vehicle without going to the door, but he was trying to allow [Borrower] to remove the personal property from the vehicle. While [Agent] was talking to [Borrower], [another Agent] got into the driver's seat of the unlocked vehicle and locked the doors. [Girlfriend] came outside and tried to open the vehicle's doors, but [Agent] kept locking the doors and refused to let her enter. [Borrower] then told [Agent] that the men needed to get off his property and that he was not letting them take the vehicle. [Agent] told [Borrower] that if he did not give up the keys to the vehicle, [Agent] would get the police involved. Eventually, [Borrower] instructed [Girlfriend] to provide the keys to [Agents]. [Girlfriend] then removed the personal property from the vehicle, and [Agents] left with the vehicle.

The vehicle later was sold at auction for $16,000.00, leaving a deficiency of $7,679.08 on the loan amount. (I will discuss the issue of damages in my next post.)

Procedural history. Borrower sued Lender on multiple legal theories, including alleged violations of Indiana’s UCC. (This post does not address all of Borrower’s legal claims.) The trial court found, among other things, that Lender breached the peace in violation of the UCC. Lender appealed.

Key rules.

Ind. Code 26-1-9.1-609 (within Indiana’s UCC) states that, after default, a secured creditor may take possession of collateral "without judicial process, if it proceeds without breach of the peace." Indiana appellate court decisions define “breach of the peace” as:

a violation or disturbance of the public tranquility or order, and the offense includes breaking or disturbing the public peace by any riotous, forceful, or unlawful proceedings. Further, the general rule is that the creditor cannot utilize force or threats, cannot enter the debtor's residence without consent, and cannot seize any property over the debtor's objections.

Indiana cases further state that:

if the repossession is verbally or otherwise contested at the actual time of and in the immediate vicinity of the attempted repossession by the defaulting party or other person in control of the chattel, the secured party must desist and pursue his remedy in court.

Holding. The Indiana Court of Appeals held that the trial court did not abuse its discretion in finding that Lender breached the peace.

Policy/rationale. Lender’s main defense was that Borrower ultimately surrendered the vehicle to Agents. The Court rejected the argument, reasoning:

[Borrower] told [Agents] that [they] needed to get off his property and that he was not letting them take the vehicle…. [Lender] contends that "[a]ny initial objection to the repossession was waived when [Borrower] voluntarily surrendered the keys to the vehicle." [Lender] further argues that "[Agents] did not continue the repossession of the vehicle once the objection was lodged and did not resume until [Borrower] consensually surrendered the keys." [Lender] conveniently omits that, during this apparent period of "suspended repossession," an [Agent] had locked himself inside the vehicle and refused to exit until [Borrower] produced the keys.

In the end, the Court felt that an improper "disturbance of the public tranquility or order" occurred when [Agent 1] refused to desist after [Borrower] objected to the repossession - in the context of [Agent 2] locking himself inside the vehicle until the keys were produced.

(My next post will discuss how Huizar handled the damages aspect of the case.)

Related posts.

I represent judgment creditors and lenders, as well as their mortgage loan servicers, entangled in loan-related disputes. If you need assistance with a similar matter, please call me at 317-639-6151 or email me at Also, don’t forget that you can follow me on Twitter @JohnDWaller or on LinkedIn, or you can subscribe to posts via RSS or email as noted on my home page.

Indiana Supreme Court’s COVID Order Interpreted: Post-Judgment Interest

Lesson. Post-judgment interest was not tolled by the Indiana Supreme Court’s 2020 COVID-related emergency orders.

Case cite. Denman v. St. Vincent Med. Grp., Inc., 2021 Ind. App. LEXIS 254 (Ind. Ct. App. 2021)

Legal issue. Whether the Indiana Supreme Court’s order that “no interest shall be due or charged during the tolled period” was unconstitutional with respect to statutory post-judgment interest.

Vital facts. Plaintiff obtained a $4.75 million judgment against Defendant in January 2020. Beginning on March 13, 2020, the Indiana Supreme Court entered a series of orders that dealt with the COVID public health emergency. The order pertinent to the Denman case included the following language:

The Court authorizes the tolling … of all laws, rules, and procedures setting time limits for speedy trials in criminal and juvenile proceedings; public health and mental health matters; all judgments, support, and other orders; and in all other civil and criminal matters before Indiana trial courts. Further, no interest shall be due or charged during this tolled period.

Procedural history. On March 30, 2020, the trial court in Denman ordered that post-judgment interest on Plaintiff’s judgment shall be tolled per the Supreme Court’s order. Plaintiff appealed that ruling and others.

Key rules.

Ind. Code § 24-4.6-1-101 states that: “[e]xcept as otherwise provided by statute, interest on judgments for money whenever rendered shall be from the date of the return of the verdict or finding of the court until satisfaction at: . . . (2) an annual rate of eight percent (8%) if there was no contract by the parties.”

As opposed to prejudgment interest, trial courts have no discretion over whether post-judgment interest will be awarded. Prevailing plaintiffs are awarded it automatically.

Holding. The Indiana Court of Appeals reversed the trial court’s order tolling the accrual of post-judgment interest.

Policy/rationale. The Court found that the trial court erred in applying the Supreme Court’s interest-tolling order to post-judgment interest “because so doing would give the [order] effect beyond the power constitutionally and statutorily allocated to the courts.” Post-judgment interest is a “creature of statute, borne of legislative authority.”

The Court upheld the trial court’s tolling of prejudgment interest, however, which is discretionary. One of its reasons in doing so was the Supreme Court’s “inherent authority,” in an emergency, to supervise all courts of the state. This authority “allows it to suspend trial courts' discretionary decision-making, like the grant of prejudgment interest.” The Court explained:

Permitting grants of prejudgment interest would have cost litigants for a delay they did not cause. As we explained above, Indiana's Tort Prejudgment Interest Statute is meant to influence litigants' behavior. To award prejudgment interest for delays not attributable to any party would not advance that goal. Post-judgment interest, on the other hand, arises just as automatically during a pandemic as it does any other time—and it will continue to do so until the legislature decides otherwise.

The “elephant in the room” is whether the Supreme Court’s order impacted interest accruing on a loan, such as contractual interest under a promissory note. The Indiana Court of Appeals’ treatment of pre- and post-judgment interest in Denman is telling on this point. Interest on a loan is not discretionary (in my view, at least). It is based on a contract entered into between private parties that, arguably, is constitutionally protected from an emergency order from the judicial branch. Contractual interest, not unlike post-judgment interest, arises automatically during the pandemic - as it does any other time. Accordingly, I do not believe that the Supreme Court’s COVID-related orders in 2020 tolled the accrual of interest on loans, and the outcome in Denman supports that conclusion.

Related posts.

I represent judgment creditors and lenders, as well as their mortgage loan servicers, entangled in loan-related disputes. If you need assistance with a similar matter, please call me at 317-639-6151 or email me at Also, don’t forget that you can follow me on Twitter @JohnDWaller or on LinkedIn, or you can subscribe to posts via RSS or email as noted on my home page.

Does A Deed-In-Lieu Of Foreclosure Automatically Release A Borrower From Personal Liability?

A deed-in-lieu of foreclosure (DIL) is one of many alternatives to foreclosure. For background, review my post Deeds In Lieu Of Foreclosure: Who, What, When, Where, Why And How. Today I discuss the Indiana Court of Appeals’ opinion in GMAC Mortgage v. Dyer, 965 N.E.2d 762 (Ind. Ct. App. 2012), which explored whether a DIL in a residential mortgage foreclosure case released the defendant borrower from personal liability.

Deficiency. In GMAC Mortgage, the borrower sought to be released from any deficiency. The term “deficiency” typically refers to the difference between the fair market value of the mortgaged real estate and the debt, assuming a negative equity situation. Exposure to personal liability arises out of the potential for a “deficiency judgment,” which refers to the money still owed by the borrower following a sheriff’s sale. The amount is the result of subtracting the price paid at the sheriff’s sale from the judgment amount. (For more on this topic, please review my August 1, 2008, June 29, 2009 and March 9, 2012 posts.)

DIL, explained. GMAC Mortgage includes really good background information on the nature of a DIL, particularly in the context of residential/consumer mortgages. According to the U.S. Department of Housing and Urban Development (HUD), a DIL “allows a mortgagor in default, who does not qualify for any other HUD Loss Mitigation option, to sign the house back over to the mortgage company.” A letter issued by HUD in 2000 further provides:

[d]eed-in-lieu of foreclosure (DIL) is a disposition option in which a borrower voluntarily deeds collateral property to HUD in exchange for a release from all obligations under the mortgage. Though this option results in the borrower losing the property, it is usually preferable to foreclosure because the borrower mitigates the cost and emotional trauma of foreclosure . . .. Also, a DIL is generally less damaging than foreclosure to a borrower’s ability to obtain credit in the future. DIL is preferred by HUD because it avoids the time and expense of a legal foreclosure action, and due to the cooperative nature of the transaction, the property is generally in better physical condition at acquisition.

Release of liability in FHA/HUD residential cases. The borrower in GMAC Mortgage had defaulted on an FHA-insured loan. The parties tentatively settled the case and entered into a DIL agreement providing language required by HUD that neither the lender nor HUD would pursue a deficiency judgment. The borrower wanted a stronger resolution stating that he was released from all personal liability. The issue in GMAC Mortgage was whether the executed DIL agreement precluded personal liability of the borrower under federal law and HUD regulations. The Court discussed various federal protections afforded to defaulting borrowers with FHA-insured loans, including DILs. In the final analysis, the Court held that HUD’s regulations are clear: “A [DIL] releases the borrower from all obligations under the mortgage, and the [DIL agreement] must contain an acknowledgement that the borrower shall not be pursued for deficiency judgments.” In short, the Court concluded that a DIL releases a borrower from personal liability as a matter of law.

Commercial cases. In commercial mortgage foreclosure cases, however, a lender/mortgagee may preserve the right to pursue a deficiency, because the federal rules and regulations outlined in GMAC Mortgage do not apply to business loans or commercial property. The parties to the DIL agreement can agree to virtually any terms, including whether, or to what extent, personal liability for any deficiency is being released. The point is that the issue of a full release (versus the right to pursue a deficiency) should be negotiated in advance and then clearly articulated in any settlement documents. A release is not automatic.

GMAC Mortgage is a residential, not a commercial, case. The opinion does not provide that all DILs release a borrower from personal liability, and the precedent does not directly apply to an Indiana commercial mortgage foreclosure case.


I represent parties in loan-related litigation. If you need assistance with such a matter, please call me at 317-639-6151 or email me at Also, don’t forget that you can follow me on Twitter @JohnDWaller or on LinkedIn, or you can subscribe to posts via RSS or email as noted on my home page.