CHAPTER 10.5. FORECLOSURE PREVENTION AGREEMENTS FOR RESIDENTIAL MORTGAGES - Indiana Statutes

IC 32-30-10.5
     Chapter 10.5. Foreclosure Prevention Agreements for Residential Mortgages

IC 32-30-10.5-1
Legislative findings; purpose
     Sec. 1. (a) The general assembly makes the following findings:
        (1) Indiana faces a serious threat to its state economy and to the economies of its political subdivisions because of Indiana's high rate of residential mortgage foreclosures, which constitutes an emergency.
        (2) Indiana's high rate of residential mortgage foreclosures has adversely affected property values in Indiana, and may have an even greater adverse effect on property values if the foreclosure rate continues to rise.
        (3) It is in the public interest for the state to modify the foreclosure process to encourage mortgage modification alternatives.
    (b) The purpose of this chapter is to avoid unnecessary foreclosures of residential properties and thereby provide stability to Indiana's statewide and local economies by:
        (1) requiring early contact and communications among creditors, their authorized agents, and debtors in order to engage in negotiations that could avoid foreclosure; and
        (2) facilitating the modification of residential mortgages in appropriate circumstances.
As added by P.L.105-2009, SEC.20.

IC 32-30-10.5-2
"Creditor"
     Sec. 2. (a) As used in this chapter, "creditor" means a person:
        (1) that regularly engages in the extension of mortgages that are subject to a credit service charge or loan finance charge, as applicable, or are payable by written agreement in more than four (4) installments (not including a down payment); and
        (2) to which the obligation is initially payable, either on the face of the note or contract, or by agreement if there is not a note or contract.
    (b) The term includes a mortgage servicer.
As added by P.L.105-2009, SEC.20.

IC 32-30-10.5-3
"Debtor"
     Sec. 3. As used in this chapter, "debtor", with respect to a mortgage, refers to the maker of the note secured by the mortgage.
As added by P.L.105-2009, SEC.20.

IC 32-30-10.5-4
"Foreclosure prevention agreement"
     Sec. 4. As used in this chapter, "foreclosure prevention

agreement" means a written agreement that:
        (1) is executed by both the creditor and the debtor; and
        (2) offers the debtor an individualized plan that may include:
            (A) a temporary forbearance with respect to the mortgage;
            (B) a reduction of any arrearage owed by the debtor;
            (C) a reduction of the interest rate that applies to the mortgage;
            (D) a repayment plan;
            (E) a deed in lieu of foreclosure;
            (F) reinstatement of the mortgage upon the debtor's payment of any arrearage;
            (G) a sale of the property; or
            (H) any loss mitigation arrangement or debtor relief plan established by federal law, rule, regulation, or guideline.
As added by P.L.105-2009, SEC.20.

IC 32-30-10.5-5
"Mortgage"
     Sec. 5. As used in this chapter, "mortgage" means a loan in which a first mortgage, or a land contract that constitutes a first lien, is created or retained against land upon which there is a dwelling that is or will be used by the debtor primarily for personal, family, or household purposes.
As added by P.L.105-2009, SEC.20.

IC 32-30-10.5-6
"Mortgage foreclosure counselor"
     Sec. 6. As used in this chapter, "mortgage foreclosure counselor" means a foreclosure prevention counselor who is part of, or has been trained or certified by, the Indiana Foreclosure Prevention Network.
As added by P.L.105-2009, SEC.20.

IC 32-30-10.5-7
"Mortgage servicer"
     Sec. 7. As used in this chapter, "mortgage servicer" means the last person to whom:
        (1) a debtor in a mortgage; or
        (2) the debtor's successor in interest;
has been instructed to send payments on the mortgage.
As added by P.L.105-2009, SEC.20.

IC 32-30-10.5-8 Version a
Presuit notice before filing of foreclosure action; contents; notice upon filing of action; debtor's right to settlement conference; exceptions to notice requirements
     Note: This version of section effective until 1-1-2011. See also following version of this section, effective 1-1-2011.
    Sec. 8. (a) This section applies to a foreclosure action that is filed after June 30, 2009. Except as provided in subsection (e) and section 10(g) of this chapter, not later than thirty (30) days before a creditor

files an action for foreclosure, the creditor shall send to the debtor by certified mail a presuit notice on a form prescribed by the Indiana housing and community development authority created by IC 5-20-1-3. In prescribing the form required by this section, the Indiana housing and community development authority shall include in the notice the statement set forth in IC 24-5.5-3-1. In addition, the notice required by this subsection must:
        (1) inform the debtor that:
            (A) the debtor is in default; and
            (B) the debtor is encouraged to obtain assistance from a mortgage foreclosure counselor; and
        (2) provide the contact information for the Indiana Foreclosure Prevention Network.
    (b) The notice required by subsection (a) shall be sent to:
        (1) the address of the mortgaged property; or
        (2) the last known mailing address of the debtor if the creditor's records indicate that the mailing address of the debtor is other than the address of the mortgaged property.
If the creditor provides evidence that the notice required by subsection (a) was sent by certified mail, return receipt requested, and as prescribed by this subsection, it is not necessary that the debtor accept receipt of the notice for an action to proceed as allowed under this chapter.
    (c) Except as provided in subsection (e) and section 10(g) of this chapter, if a creditor files an action to foreclose a mortgage, the creditor shall include with the complaint served on the debtor a notice that informs the debtor of the debtor's right to participate in a settlement conference. The notice must be in a form prescribed by the Indiana housing and community development authority created by IC 5-20-1-3. The notice must inform the debtor that the debtor may schedule a settlement conference by notifying the court, not later than thirty (30) days after the notice is served, of the debtor's intent to participate in a settlement conference.
    (d) In a foreclosure action filed under IC 32-30-10-3 after June 30, 2009, the creditor shall attach to the complaint filed with the court a copy of the notices sent to the debtor under subsections (a) and (c).
    (e) A creditor is not required to send the notices described in this section if:
        (1) the loan is secured by a dwelling that is not the debtor's primary residence;
        (2) the loan has been the subject of a prior foreclosure prevention agreement under this chapter and the debtor has defaulted with respect to the terms of that foreclosure prevention agreement; or
        (3) bankruptcy law prohibits the creditor from participating in a settlement conference under this chapter with respect to the loan.
As added by P.L.105-2009, SEC.20.

IC 32-30-10.5-8 Version b Presuit notice before filing of foreclosure action; contents; notice upon filing of action; debtor's right to settlement conference; exceptions to notice requirements
     Note: This version of section effective 1-1-2011. See also preceding version of this section, effective until 1-1-2011.
    Sec. 8. (a) This section applies to a foreclosure action that is filed after June 30, 2009. Except as provided in subsection (e) and section 10(g) of this chapter, not later than thirty (30) days before a creditor files an action for foreclosure, the creditor shall send to the debtor by certified mail a presuit notice on a form prescribed by the Indiana housing and community development authority created by IC 5-20-1-3. The notice required by this subsection must do the following:
        (1) Inform the debtor that:
            (A) the debtor is in default;
            (B) the debtor is encouraged to obtain assistance from a mortgage foreclosure counselor; and
            (C) if the creditor proceeds to file a foreclosure action and obtains a foreclosure judgment, the debtor has a right to do the following before a sheriff's sale is conducted:
                (i) Appeal a finding of abandonment by a court under IC 32-29-7-3(a)(2).
                (ii) Redeem the real estate from the judgment under IC 32-29-7-7.
                (iii) Retain possession of the property under IC 32-29-7-11(b), subject to the conditions set forth in IC 32-29-7-11(b).
        (2) Provide the contact information for the Indiana Foreclosure Prevention Network.
        (3) Include the following statement printed in at least 14 point boldface type:
                "NOTICE REQUIRED BY STATE LAW
                Mortgage foreclosure is a complex process. People may approach you about "saving" your home. You should be careful about any such promises. There are government agencies and nonprofit organizations you may contact for helpful information about the foreclosure process. For the name and telephone number of an organization near you, please call the Indiana Foreclosure Prevention Network.".
    (b) The notice required by subsection (a) shall be sent to:
        (1) the address of the mortgaged property; or
        (2) the last known mailing address of the debtor if the creditor's records indicate that the mailing address of the debtor is other than the address of the mortgaged property.
If the creditor provides evidence that the notice required by subsection (a) was sent by certified mail, return receipt requested, and as prescribed by this subsection, it is not necessary that the debtor accept receipt of the notice for an action to proceed as allowed under this chapter.
    (c) Except as provided in subsection (e) and section 10(g) of this

chapter, if a creditor files an action to foreclose a mortgage, the creditor shall include with the complaint served on the debtor a notice that informs the debtor of the debtor's right to participate in a settlement conference. The notice must be in a form prescribed by the Indiana housing and community development authority created by IC 5-20-1-3. The notice must inform the debtor that the debtor may schedule a settlement conference by notifying the court, not later than thirty (30) days after the notice is served, of the debtor's intent to participate in a settlement conference.
    (d) In a foreclosure action filed under IC 32-30-10-3 after June 30, 2009, the creditor shall attach to the complaint filed with the court a copy of the notices sent to the debtor under subsections (a) and (c).
    (e) A creditor is not required to send the notices described in this section if:
        (1) the mortgage is secured by a dwelling that is not the debtor's primary residence;
        (2) the mortgage has been the subject of a prior foreclosure prevention agreement under this chapter and the debtor has defaulted with respect to the terms of that foreclosure prevention agreement; or
        (3) bankruptcy law prohibits the creditor from participating in a settlement conference under this chapter with respect to the mortgage.
As added by P.L.105-2009, SEC.20. Amended by P.L.68-2010, SEC.3.

IC 32-30-10.5-9
Conditions for court's issuance of judgment of foreclosure; exceptions
     Sec. 9. (a) Except as provided in subsection (b), after June 30, 2009, a court may not issue a judgment of foreclosure under IC 32-30-10 on a mortgage subject to this chapter unless all of the following apply:
        (1) The creditor has given the notice required under section 8(c) of this chapter.
        (2) The debtor either:
            (A) does not contact the court within the thirty (30) day period described in section 8(c) of this chapter to schedule a settlement conference under section 8(c) of this chapter; or
            (B) contacts the court within the thirty (30) day period described in section 8(c) of this chapter to schedule a conference under section 8(c) of this chapter and, upon conclusion of the conference, the parties are unable to reach agreement on the terms of a foreclosure prevention agreement.
        (3) At least sixty (60) days have elapsed since the date the notice required by section 8(a) of this chapter was sent, unless the mortgaged property is abandoned.
    (b) If the court finds that a settlement conference would be of limited value based on the result of a prior loss mitigation effort

between the creditor and the debtor:
        (1) a settlement conference is not required under this chapter; and
        (2) the conditions set forth in subsection (a) do not apply, and the foreclosure action may proceed as otherwise allowed by law.
As added by P.L.105-2009, SEC.20.

IC 32-30-10.5-10
Debtor's request for settlement conference; court's notice; contents; conference participants; persons representing the creditor; duty to notify court of result; settlement conference to satisfy court's mediation or alternative dispute resolution rules
     Sec. 10. (a) Unless a settlement conference is not required under this chapter, the court shall issue a notice of a settlement conference if the debtor contacts the court to schedule a settlement conference as described in section 8(c) of this chapter. The court's notice of a settlement conference must do the following:
        (1) Order the creditor and the debtor to conduct a settlement conference on or before a date and time specified in the notice, which date must not be earlier than twenty-five (25) days after the date of the notice or later than sixty (60) days after the date of the notice, for the purpose of attempting to negotiate a foreclosure prevention agreement.
        (2) Encourage the debtor to contact a mortgage foreclosure counselor before the date of the settlement conference. The notice must provide the contact information for the Indiana Foreclosure Prevention Network.
        (3) Require the debtor to bring to the settlement conference the following documents needed to engage in good faith negotiations with the creditor:
            (A) Documentation of the debtor's present and projected future income, expenses, assets, and liabilities, including documentation of the debtor's employment history.
            (B) Any other documentation or information that the court determines is needed for the debtor to engage in good faith negotiations with the creditor. The court shall identify any documents required under this clause with enough specificity to allow the debtor to obtain the documents before the scheduled settlement conference.
        (4) Require the creditor to bring to the settlement conference the following transaction history for the mortgage:
            (A) A copy of the original note and mortgage.
            (B) A payment record substantiating the default.
            (C) An itemization of all amounts claimed by the creditor as being owed on the mortgage.
            (D) Any other documentation that the court determines is needed.
        (5) Inform the parties that:
            (A) each party has the right to be represented by an attorney

or assisted by a mortgage foreclosure counselor at the settlement conference; and
            (B) an attorney or a mortgage foreclosure counselor may participate in the settlement conference in person or by telephone.
        (6) Inform the parties that the settlement conference will be conducted at the county courthouse, or at another place designated by the court, on the date and time specified in the notice under subdivision (1) unless the parties submit to the court a stipulation to:
            (A) modify the date, time, and place of the settlement conference; or
            (B) hold the settlement conference by telephone at a date and time agreed to by the parties.
        If the parties stipulate under clause (B) to conduct the settlement conference by telephone, the parties shall ensure the availability of any technology needed to allow simultaneous participation in the settlement conference by all participants.
    (b) An attorney for the creditor shall attend the settlement conference, and an authorized representative of the creditor shall be available by telephone during the settlement conference. In addition, the court may require any person that is a party to the foreclosure action to appear at or participate in a settlement conference held under this section, and, for cause shown, the court may order the creditor and the debtor to reconvene a settlement conference at any time before judgment is entered.
    (c) At the court's discretion, a settlement conference may or may not be attended by a judicial officer.
    (d) The creditor shall ensure that any person representing the creditor:
        (1) at a settlement conference scheduled under subsection (a); or
        (2) in any negotiations with the debtor designed to reach agreement on the terms of a foreclosure prevention agreement;
has authority to represent the creditor in negotiating a foreclosure prevention agreement with the debtor.
    (e) If, as a result of a settlement conference held under this section, the debtor and the creditor agree to enter into a foreclosure prevention agreement, the agreement shall be reduced to writing and signed by both parties, and each party shall retain a copy of the signed agreement. Not later than seven (7) business days after the signing of the foreclosure prevention agreement, the creditor shall file with the court a copy of the signed agreement. At the election of the creditor, the foreclosure shall be dismissed or stayed for as long as the debtor complies with the terms of the foreclosure prevention agreement.
    (f) If, as a result of a settlement conference held under this section, the debtor and the creditor are unable to agree on the terms of a foreclosure prevention agreement:
        (1) the creditor shall, not later than seven (7) business days after

the conclusion of the settlement conference, file with the court a notice indicating that the settlement conference held under this section has concluded and a foreclosure prevention agreement was not reached; and
        (2) the foreclosure action filed by the creditor may proceed as otherwise allowed by law.
    (g) If:
        (1) a foreclosure is dismissed by the creditor under subsection (e) after a foreclosure prevention agreement is reached; and
        (2) a default in the terms of the foreclosure prevention agreement later occurs;
the creditor or its assigns may bring a foreclosure action under IC 32-30-10-3 without sending the notices described in section 8 of this chapter.
    (h) Participation in a settlement conference under this section satisfies any mediation or alternative dispute resolution requirement established by court rule.
As added by P.L.105-2009, SEC.20.

IC 32-30-10.5-11
Foreclosure actions filed before July 1, 2009; court's duty to provide notice of availability of settlement conference
     Sec. 11. (a) This section applies to a mortgage foreclosure action with respect to which the creditor has filed the complaint in the proceeding before July 1, 2009, and the court having jurisdiction over the proceeding has not rendered a judgment of foreclosure before July 1, 2009.
    (b) In a mortgage foreclosure action to which this section applies, the court having jurisdiction of the action shall serve notice of the availability of a settlement conference under section 8(c) of this chapter.
As added by P.L.105-2009, SEC.20.