Bill Text: IN SB0298 | 2012 | Regular Session | Enrolled
Bill Title: Mortgages and liens on real property.
Spectrum: Bipartisan Bill
Status: (Enrolled - Dead) 2012-03-19 - Signed by the Governor [SB0298 Detail]
Download: Indiana-2012-SB0298-Enrolled.html
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AN ACT to amend the Indiana Code concerning property.
Be it enacted by the General Assembly of the State of Indiana:
(b) An action may not be brought or maintained in the courts of Indiana to foreclose a mortgage or enforce a vendor's lien reserved by a
SECTION 2. IC 32-28-4-2 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 2. (a) Except as
provided in section 3 of this chapter, if the record of a mortgage or lien
described in section 1 of this chapter does not show when the debt or
the last installment of the debt secured by the mortgage or lien becomes
due, the mortgage or vendor's lien expires twenty (20) ten (10) years
after the date on which the mortgage or lien is executed unless an
action to foreclose is brought or maintained not later than ten (10)
years after the date on which the mortgage or lien was executed.
(b) If:
(1) the record of a mortgage or lien described in section 1 of
this chapter does not show when the debt or the last
installment of the debt secured by the mortgage or lien
becomes due; and
(2) the date of execution has been omitted in a mortgage or
vendor's lien;
the mortgage or vendor's lien expires twenty (20) ten (10) years after
the date on which the mortgage or vendor's lien is recorded unless an
action to foreclose is brought or maintained not later than ten (10)
years after the date on which the mortgage or vendor's lien was
recorded.
(c) Upon the request of the owner of record of real estate
encumbered by a mortgage or lien that has expired under this section,
the recorder of the county in which the real estate is situated shall
certify on the record that the mortgage or vendor's lien is fully paid and
satisfied by lapse of time, and the real estate is released from the lien.
SECTION 3. IC 32-28-4-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 3. (a) If the record of
a mortgage or vendor's lien to which this chapter applies does not show
the time when the debt or the last installment of the debt secured by the
mortgage or vendor's lien becomes due:
(1) the original mortgagee;
(2) the owner of the mortgage; or
(3) the owner of a vendor's lien;
may file an affidavit with the recorder of the county where the
mortgage or lien is recorded, stating when the debt becomes due. An
affidavit must be filed under this section not later than twenty (20) ten
(10) years after the date of execution of the mortgage or lien, or, if the
mortgage or lien contains no date of execution, not later than twenty
(20) ten (10) years from the date the mortgage or vendor's lien was
recorded. Upon the filing of the affidavit, the recorder shall note in the
record of the mortgage or vendor's lien that an affidavit has been filed,
showing the location where the affidavit is recorded.
(b) The filing of an affidavit under subsection (a) has the same
effect with respect to the duration of the lien of the mortgage or
vendor's lien described in the affidavit and with respect to the time
within which an action may be brought or maintained to foreclose the
mortgage or vendor's lien as though the time of maturity of the debt or
the last installment of the debt secured by the mortgage or vendor's lien
had been stated in the mortgage or vendor's lien when recorded. The
affidavit is prima facie evidence of the truth of the averments contained
in the affidavit. The lien of a mortgage or vendor's lien on the real
estate described in the affidavit expires twenty (20) ten (10) years after
the time when the debt or the last installment of the debt secured by the
mortgage or vendor's lien becomes due, as shown by the affidavit.
Upon the expiration of a mortgage or lien as described in this section
and at the request of the real estate owner, the recorder of the county
in which the affidavit is recorded shall certify on the record of the
mortgage or vendor's lien that the mortgage or vendor's lien is fully
paid and satisfied by lapse of time and that the real estate is released
from the lien.
(c) The recorder shall charge a fee for filing the affidavit in
accordance with the fee schedule established in IC 36-2-7-10.
SECTION 4. IC 32-29-7-13 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 13. There may not
be a redemption from the foreclosure of a mortgage executed after June
30, 1931, on real estate except as provided in this chapter and in
IC 32-29-8.
SECTION 5. IC 32-29-8-2 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 2. A person who:
(1) is assigned a mortgage and fails to (1) have an the
assignment of the mortgage made to the person properly placed
on the mortgage record; or
(2) be has an interest described in section 1 of this chapter and
is not made a party to the foreclosure action as required by
section 1 of this chapter;
is bound by the court's judgment or decree as if the person were a party
to the suit.
SECTION 6. IC 32-29-8-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE UPON PASSAGE]: 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; buying 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.
SECTION 7. IC 32-29-8-4 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]: Sec. 4. (a) As used in this section, "interested person", with respect to an action to foreclose a mortgage on an interest in real property in Indiana, means:
(1) the holder of the evidence of debt secured by the mortgage being foreclosed;
(2) a person:
(A) who purchases the property at a judicial sale after a judgment and decree of sale is entered in the action; and
(B) to whom a deed is executed and delivered by the sheriff under IC 32-29-7-10; or
(3) any person claiming by, through, or under a person described in subdivision (1) or (2).
(b) As used in this section, "omitted party", with respect to an action to foreclose a mortgage on an interest in real property in Indiana, means a person who:
(1) before the commencement of the action has acquired in the property an interest that:
(A) is junior or subordinate to the mortgage being foreclosed; and
(B) would otherwise be extinguished by the foreclosure; and
(2) is either:
(A) not named as a party defendant in the action or, if named as a party defendant, is not served with process; or
(B) not served with a notice of sale under IC 32-29-7-3(d) after a judgment and decree of sale is entered in the action.
The term includes any person claiming by, through, or under a person described in this subsection.
(c) At any time after a judgment and decree of sale is entered in an action to foreclose a mortgage on an interest in real property in Indiana, an interested person or an omitted party may bring a civil
action to:
(1) determine the extent of; and
(2) terminate;
the interest of an omitted party in the property subject to the sale.
(d) Except as provided in subsection (e) and subject to
subsections (f) and (g), upon the filing of an action described in
subsection (c), the court shall determine the extent of the omitted
party's interest in the property and issue a decree terminating that
interest, subject to the right of the omitted party to redeem the
property on terms as the court considers equitable under the
circumstances after considering the factors set forth in subsection
(f), if the omitted party would have had redemption rights:
(1) before the sale under IC 32-29-7-7; or
(2) after the sale, as described in IC 34-55-4-8(a)(2).
(e) If the omitted party proves that the omitted party has a right
to receive proceeds actually paid at the judicial sale, the omitted
party's interest in the property is not subject to termination by an
action brought under this section unless the proceeds that the
omitted party would have received at the judicial sale are paid to
the omitted party.
(f) In an action brought under this section, if the court
determines that the omitted party is entitled to redemption under
subsection (d), the court shall consider the following in deciding the
terms of the redemption:
(1) Whether the omitted party:
(A) was given or had actual notice or knowledge of the
foreclosure; and
(B) had opportunity to intervene in the foreclosure action
or otherwise exercise any right to redeem the property.
(2) Whether any interested person in good faith has made
valuable improvements to the property and, if so, the value of
all lasting improvements made to the property before the
commencement of the action under this section.
(3) The amount of any taxes and assessments, along with any
related interest payments, related to the property and paid by
the interested person or by any person under whose title to
the property the interested person claims.
(g) If the court determines that the omitted party is entitled to
redemption under subsection (d), and after considering the factors
set forth in subsection (f), the court shall grant redemption rights
to the omitted party that the court considers equitable under the
circumstances, subject to the following:
(1) The amount to be paid for redemption may not be less than the sale price resulting from the foreclosure of the interested person's senior lien, plus interest at the statutory judgment rate.
(2) The time allowed for payment of the redemption amount may not exceed ninety (90) days after the date of the court's decree under subsection (d).
(h) The senior lien upon which the foreclosure action was based is not extinguished by merger with the title to the property conveyed to a purchaser through a sheriff's deed executed and delivered under IC 32-29-7-10 until the interest of any omitted party has been terminated:
(1) through an action brought under this section; or
(2) by operation of law.
Until an omitted party's interest is terminated as described in this subsection, any owner of the property as a holder of a sheriff's deed executed and delivered under IC 32-29-7-10, or any person claiming by, through, or under such an owner, is the equitable owner of the senior lien upon which the foreclosure action was based and has all rights against an omitted party as existed before the judicial sale.
(i) An interested person may not terminate an omitted party's interest in real property that is the subject of a foreclosure action except through an action brought under this section. An interested person's rights under this section may not be denied because the interested person:
(1) had actual or constructive notice of the omitted party's interest in the property;
(2) was negligent in examining county records;
(3) was engaged in the business of lending; or
(4) obtained a title search or commitment or a title insurance policy.
SECTION 8. An emergency is declared for this act.
SEA 298 _ CC 1
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