2013 Legislation Ends Post-Sale Redemption Discussion
May 12, 2013
Last year, the Indiana General Assembly amended Ind. Code 32-29-8-3. For more, please read my 3-29-12 post. But the Court of Appeals' 2011 opinion in CitiMortgage v. Barabas and 2012 statutory amendment left open the question of whether Indiana had a limited post-sheriff's sale right of redemption.
When the Indiana Supreme Court issued its 2012 opinion on transfer in the CitiMortgage v. Barabas case, the Justices answered some important questions about Indiana mortgage law, including the role of MERS, but as I wrote on 10-12-12 the post-sale redemption question was not one of them. Some confusion remained. (Note: federal tax liens give the IRS a post-sale right of redemption, which is the only such right of which I'm aware in Indiana.)
In this year's session, the General Assembly in Senate Bill 279 finally axed the statutory language that purported to grant a one-year post-sale right of redemption to certain parties. Ind. Code 32-29-8-3 has been amended, effective July 1, 2013, as follows:
Sec. 3. A person who:
(1) purchases a mortgaged premises or any part of a mortgaged premises under the court's judgment or decree at a judicial sale or who claims title to the mortgaged premises under the judgment or decree; and
(2) buys the mortgaged premises or any part of the mortgaged premises without actual notice of
(A) an assignment that is not of record; or
(B) the transfer of a note, the holder of which is not a party to the action;
holds the premises free and discharged of the lien. However, any assignee or transferee may redeem the premises, like any other creditor, during the period of one (1) year after the sale or during another period ordered by the court in an action brought under section 4 of this chapter, but not exceeding ninety (90) days after the date of the court's decree in the action.
For parties involved in Indiana foreclosure actions, the bottom line is this: a foreclosure sale cuts off a the right of redemption. Parties can redeem right up to the sheriff's sale, but the game ends there. End of discussion.