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Certain Summonses In Indiana Residential Mortgage Foreclosure Cases Deemed Confidential

Indiana’s General Assembly passed legislation in 2009, in the midst of the residential mortgage foreclosure crisis, that included the “Foreclosure Prevention Agreements for Residential Mortgages” found at Indiana Code § 32-30-10.5. (See my 2009 blog post about this.) The 2009 laws affected only residential (consumer) mortgage foreclosure litigation and did not apply to commercial matters. See, I.C. § 32-30-10.5-5.

Amendment. In 2011, the General Assembly tweaked certain portions of I.C. § 32-30-10.5 to include, among other things, a limited requirement of confidentiality regarding a borrower/defendant’s address on a summons. See, I.C. § 32-30-10.5-8(d). If a lender files suit to foreclose a residential mortgage, the borrower’s mailing address must be omitted from the summons if “the last known mailing address of the [borrower] in the [lender’s] records indicates that the mailing address . . . is other than the address of the mortgaged property.” I.C. § 32-30-10.5-8(b)(2). I.C. § 5-14-3-4(a)(13) declares such last known mailing address to be confidential:

Since such an address may need to be used on a summons, Indiana’s “Green Paper Rule,” which governs confidential information, mandates that the address be omitted from the summons and set forth on a separate accompanying document in light green paper pursuant to Trial Rule 5(G)(2).

In practice. Documentation on light green paper can be provided to the sheriff, in cases where the sheriff will be effectuating service of process, and then returned to the clerk’s confidential file following service. Evidently county clerks have been directed to advise lenders filing residential mortgage foreclosure cases to follow the green paper rule by submitting the summons on green paper when the last known mailing address of the borrower on the lender’s records is not the address of the mortgaged property. For more on service of process and summons issues, click here. I would like to thank Lori Schein, Boone County Bar Association officer and Deputy Prosecutor, for distributing this information to the Association’s membership.

Residential foreclosures involve all sorts of administrative headaches (or consumer protections, depending upon your point of view) of which lenders must be aware. But, again, for purposes of this blog, neither this new change, nor Indiana Code § 32-30-10.5 in general, applies to Indiana commercial foreclosure cases or, in other words, to foreclosures involving business-related real estate.

Happy Thanksgiving.

5 Years of Indiana Commercial Foreclosure Law Content

The fifth-year anniversary of my blog came and went on November 1st.  274 posts for subscribers and surfers to search and study.

Here's what I wrote last November 1st about the status of Indiana Commercial Foreclosure Law and what this site provides.   My first four posts from November 1, 2006 address my vision:  1 , 2 , 3 and 4 .  The party's not over....   

Don't forget about the search tool on the left side of my home page.  There's lots to learn. 

It's been a busy year, and I'm behind on my case law reviews.  But I'm committed to another five years, and beyond.  Thanks for your comments and emails, and thanks to my clients for your business.  


Marion County (Indianapolis) Sheriff's Sales Now Being Recorded

Quickly, I attended the monthly Marion County Sheriff's sale yesterday for a client, and the staff (Pam) announced that the sheriff's office is now recording the oral auction phase of the sale.  Microphones have been placed in the room.  It's my understanding that the purpose of the recordings is to verify the bids if a dispute later arises over a bid amount or the identify of a bidder.  The recordings will not be made available to the public, however.   

Court Clarifies Its Reasoning In CitiMortgage/Redemption Case - Did It Help?

On August 2nd, I discussed how the Indiana Court of Appeals precluded MERS and its assignee from asserting an interest in the mortgaged property due to timeliness issues. Here's my post: Senior Mortgagee Time Barred. The outcome of the decision rested in part on Ind. Code 32-29-8-3 and a mysterious (to me) post-sheriff's sale right of redemption.

Correction. On rehearing, the Court, on October 20th, issued an opinion in the case that, in part, cleared up the statutory redemption issue:

We agree that the correct interpretation of the statute is that the one-year redemption period begins after the sale of the property [the sheriff's sale], not after Citi first acquired an interest in the property.

Nevertheless, the decision against the senior mortgagee remained the same. As noted in my August 2nd post, the concept of redemption as it might apply to the CitiMortgage case was admittedly confusing and surprising to me. And I'm not sure the opinion on rehearing helped too much, other than to clarify the date upon which the clock should start ticking.

Application. I conducted some limited research for case law on this statutory section and found very little decisional law interpreting it. All I can conclude is that there may be a limited, extraordinary post-sheriff's sale right of redemption for assignees of mortgages whose assignments were not recorded before the filing of the foreclosure complaint. The redemption right clearly does not apply to borrowers or mortgagors.

Know it's there. I welcome emails or comments about CitiMortgage or Ind. Code 32-29-8-3. The point for secured lenders - specifically, assignees of mortgages - is that an unknown foreclosure sale may not be immediately fatal to your mortgage interest if the assignment wasn't recorded. On the flip side, sheriff's sale purchasers - thinking they hold title free and clear of all liens - could under narrow circumstances be in for a surprise. My head starts to spin when I consider all the logistics that could come in to play. Lesson: always buy an owner's policy of title insurance....

NOTE: See my March 29, 2012 post re: new legislation amending Section 3 and my 4-21-12 post noting that transfer has been granted by the Supreme Court.  On 10-4-12, the Supreme Court reversed the trial court.