One of the key factors that caused the economic recession a few years ago was the bursting of the housing bubble in America. In order to aid our economy’s recovery, we have taken steps in the General Assembly that will expedite the foreclosure market. This will better allow potential homebuyers to get back in the market and stimulate the economy.
In the past, our state laws required mortgages or vendor’s liens on real estate to expire 20 years after the last installment of the secured debt is due. Legislation passed this year reduces the required expiration date to 10 years. By more quickly providing a clean title for real estate, a title can more easily transfer. This makes receiving a loan easier for buyers.
This same piece of legislation also put into state law 120 years of common law dealing with strict foreclosures. In a strict foreclosure, if a lender files a lawsuit against a homeowner that has defaulted on their mortgage, and if the borrower cannot pay the mortgage within a specific timeline determined by the court, then the property goes back to the mortgage holder, rather than being sold at auction. This provides an out-of-court alternative to Hoosiers.
In a similar piece of legislation, creditors and local authorities will now be able to petition the court to determine if a foreclosed property is abandoned. In order to determine this, the court will ask any appropriate parties to present written or oral evidence that a property is or is not abandoned. If no parties object, or fail to appear on their appointed date in court, then the court will rule that the foreclosed property is abandoned.
Abandoned and vacant properties in communities are known to attract crime and reduce property value, something that can be better avoided with this legislation. Also, this bill, like that last, will expedite the foreclosure process, allowing homes and business properties to get back on the market. In addition, this bill will relieve court backlog because many foreclosure court cases are lengthy. By encouraging both the court and owner of the home to prove that the home is either occupied or vacant and abandoned we can help keep our communities safe and better serve our local economies.
The housing market in most of America is recovering, however it is slow. The steps we took this year to get properties back on the market more quickly and with a clean title will, in time, benefit all Hoosiers.