Sign Indiana Banking Permission Slip Myself

Industry sign banking indiana permission slip myself

lenders often have a question because they've heard the term but aren't really sure what it means the right of redemption so what is the right of redemption the right of an owner to reclaim property lost or in jeopardy of being lost to a mortgagee by paying off the debt the property secures after the borrowers default the mortgage and the note or our tickets into court the suit is the vehicle to enforce the security instrument but the object of the suit is to extinguish the owners right of redemption so as I say there what we do is we foreclose the owners right on redemption and their bar everybody take clear title to the collateral real estate so one way to think about a foreclosure action is as a quiet title action my colleagues in the Georgia and Tennessee can fill you in on non-judicial foreclosures but my impression being pretty ignorant of those is that the right of redemption in those states is extinguished without much more than the thought that it should be extinguish occurring in the mind of a banker and then someone shows up the house with a change of keys that pretty much cover it here it's a different story in judicial foreclosure states they require mortgagee to file a lawsuit in Indiana and Kentucky judicial foreclosure states the foreclosure lawsuits are strange creatures that amount to a slow motion coerced real estate transaction between at least two unwilling parties supervised by a court but conducted by a county official in Indiana the sales are conducted by county sheriff and then Kentucky they're conducted by master commissioner Master Commissioners in Kentucky fulfill their duties according to the court rules so each circuit in their 57 in in Kentucky appoints a master commissioner court rule 53 goes on to provide the judicial sales under an order of judgment of the circuit court may be executed by master Commissioner under such terms and conditions as are specified by the circuit court either in its order or judgment or by rule so local rules govern master Commissioner practices in Kentucky unless they don't because like politics foreclosures are all local some circuits have very specific language like Jefferson Circuit rule 505 that must be in the judgment or some have specific formatting request ins for which you'll get dinged if you ignore them like grant Circuit rule 2 G in any event it's essential to that your attorney speak with the commissioners assistant at the beginning of the case and then during the sale process because she's likely to be the keeper of all useful knowledge during the case a Jefferson circuit court for instance has a master Commissioner this is just the show how among the 57 circuits and things vary widely wildly and widely the master Commissioner either thought life has six step g master commissioners an extensive local rule 16 of them kenton counting on the other hand has a master commissioner no local rules but again you proceed at your own peril if you don't talk to the commissioners assistant Linda first to give you a flavor of how these go in one circuit in Jefferson circuit I'll say something about the process there which is charitably characterizes unique in Jefferson Circuit Court Lane enforcement actions are automatically referred to the master commissioner who acts essentially is a magistrate to the circuit judge in other counties as the slide says there are other ways to get the referral made either by an order tendered with the motion an automatic referral or by filing a an administrative office in the port form after the referrals made the Commissioner reviews the file in can in Jefferson County the master Commissioner the deputy master Commissioner also conducts hearings when necessary if the foreclosure is disputed reviews the motion for judgment order of sale it makes a recommendation to the circuit judge regarding whether the judgment order sale should be entered the Commissioner as I said also conducts the judicial sale the way this works in practice in Jefferson County is that the case is referred to the master commissioner through notice under local rule and the file is hand carried or pushed on a cart to the Commissioner's Office and placed on a shelf for review in the order in which the files come in and to give you an idea there are over 200 foreclosure sales set every two weeks so it's a it's a pretty big shelf the master permission to then reviews the record finds an it collects fifty dollars and returns the file by hand to the circuit court clerk then the attorney gets notice of that removes the NIT renews the motion for judgment which stains automatically refer to the Commissioner doesn't have to go back to the judge or in a doesn't require motion hour but the files carried from the circuit court clerk back to the commissioners office for a second review then the Commissioner reviews the record again recommends judgment hopefully with notice to any other party for objections them that's a ten day period if no objections are filed then the file is walked out to the circuit clerk's office but to the judge's office in his chambers for her chambers first signature then the files hand carried to the circuit court clerk for entry of judgment and the file wise its way back to the Commissioner's Office to await sale commissioners sales in Jefferson County are set 8 to 12 weeks out from the date that the Commissioner sets a sale that's immediately followed by the senior partner on the file complaining about the delay then I spend the next eight to 12 weeks begging the client forbid instructions sometime between six p.m. the night before and 10 a.m. on the morning the sale which begins at ten the client provides bit instructions or decides to cancel sale in Indiana the process is a much more streamlined there you move the court for judgment usually get a judgment you follow up recipe that's a fancy latin word for a request for a sale date the sheriff sets the sale the plaintiff drafts all the necessary documents the deed to foreclosure sale notice and the sales disclosure form you get a sale and it takes just as long its streamlined but just this slow at the end of both of these drawn out procedures however is the sale and that's the true mechanism by which the borrower loses the right of redemption how exactly the sale does that in deprived of the borrower the right of redemption differs in Indiana the right to redeem the property from the foreclosure judgment terminates with the sheriff sale that is the owner must pay the entire debt before the sale or the disposition of the property and that question has been litigated and the current chief judge of the US bank Bankruptcy Court for the Southern District of Indiana Jim Cochise has concluded in Collins that a sheriff sales complete when the hammer Falls so that's the moment at which the debtor loses his or her right to pay off the bank's debt and take the property back even though some states may permit Redemption post-sale Indiana is not one of them Kentucky is in Kentucky the right to redeem terminates only if the sale brings more than two-thirds of the court appraised value in irony Laden language the KR s requires that the appraisal be made by two disinterested intelligent housekeepers of the county if the winning bid does not bring two thirds of the appraised value the defendant can redeem it and that is it'll be the winning bidder will receive a commissioners deed that provides that the transfer of title is subject to the prior owners right to pay the winning bid not the judgment but the winning bid amount plus ten percent into court within 365 days of the sale date so in Indiana to recap prosecute the foreclosure action through the sheriff sale the bid should be formulated therefore to maximize the deficiency but to avoid a contest as the weather the bid is so low is that it'll shock the circuit judges conscience so Indiana there's no minimum bid as there is in Kentucky some bankers worried that well should at least bid fair market value whatever that is the Supreme Court taught us in bfp vs Resolution Trust that I'm fair market valuation presupposes conditions that by definition don't obtain in a forced foreclosure sale so that's not applicable so rather the standard is and it's a squishy one whether the bit of solo is to shock the judges conscience but there are market forces and play there that also will usually in a current form of foreclosure vultures who will be at the sale and an outbid an extremely low bid by the bank so that will ensure that the shock the conscience standard really is an issue and as I said in Kentucky you have 24 prosecute the foreclosure sale the minimum bid that the bank should make unless there's a very good reason not to and then you still shouldn't do it bid below sixty-seven percent of the ceiling at sixty-seven percent of the appraised value not two-thirds because that's what the statute says and that's an invitation to litigation or at least a hearing sixty-seven percent removes all doubt in the ceiling on the other hand is what excuse me whatever you want it to be but it most it could be is the banks that interesting chargeable costs as of the date of the sale so don't forget to check that your attorney is included both prejudgment post-judgment interest through the data sale because the judgment should provide that that continues to accrue until the data sale and so that gives you more room with which to credit bid and get the property so that's foreclosures any questions about for closing the right of redemption in Kentucky and Indiana the United States Code provides to government rights a Redemption and I forget I get them confused the IRS either gets 180 days or a year I forget which and all others get the opposite in those dates as far as I'm aware run from like the state law own Redemption period from the date of sale those can be sometimes negotiated away because for practical purposes they're often valueless to the United States but leave a cloud on the title for a bank he's taken in REO or for a third-party purchaser he was so lucky to buy the property at the sale I'm going to turn it over to you guys because we only have 20 minutes left and I want to make sure you have time if there's time at the end we'll be happy to take more questions or okay then I'll be happy to continue lucky you um so on to the the heartburn portion of my presentation I'm going to talk about keeping guarantees valid against guarantors during the life of a loan in indiana and kentucky kentucky and indiana guarantee laws are designed to protect banks no guarantor as we'll see indiana is slightly more lender friendly but as a practical matter and for most of the people in this fringe purposes guarantee law like bankruptcy law is borrower oriented kentucky's guarantee statute establishes the requirement that if a guarantee is not written on the note where expressly refers to the note then it must state the maximum principal amount of the liability not including attorney's fees and costs and the termination date so repeat if it's not on the face of the instrument it has to expressly refer to that instrument in detail by reciting the amount of the loan number or it has to state the amount that for which the guarantees a guarantor is on the hook and the date certain on which it expires that way the guarantor knows how much and for how long she's on the hook Indiana doesn't have that kind of statute dictating guarantee terms at the front end of a loan but if the underlying obligations are an Indiana loan change during the life of the loan and after the guaranty contract is executed then depending on the circumstances the guarantor may be off the hook so Indiana case law provides that when parties cause a material alteration of an underlying obligation without the consent of the guarantor the guarantor is discharged from further liability whether the change is to his or her injury or benefit so two elements there I'm material alteration and without the guarantor is consent a material alteration according to the case law is that which will affect a discharge of the guarantor it must be one that includes a change which alters the legal identity of the principal's contract or substantially increases the risk of loss of the guarantor or places the guarantor in a different position this last one obviously swallows the exceptions because arguably any alteration of the credit terms also altering alters the guarantors position to this is just an invitation for guarantor counsel to litigate and it's also an insurance policy for guarantors counsel against rule 11 because anything conceivably plausibly could change a guarantor position so so the theme is litigation costs versus preventive medicine so given Kentucky's rule establishing the mountain length of the gearing towards obligation on the front end in indiana's rule that practically any change in the terms to which the guarantor desert not simultaneously consent on the back end both laws should lead you to insist on new guarantees or acknowledgments of the continued validity of guarantees whenever a note is modified as I said Indiana courts are a little more lender friendly and applying this law but the theme remains the same litigation costs versus preventative medicine in the district court case in 2006 in Indiana console Murr versus bambor summer company was the lender the defendant borrower was woodwind and the defendant guarantor was bambor after the execution of the underlying security agreement guarantee seller company's ownership changed several times the unner defaulted and sued sulma guarantor bambor did not dispute execution of the personal guarantee at the front end for its terms of conditions rather he argued that since the liabilities under the security agreement changed over time he was relieved of liability under the guarantee the district court in its decision restated the basic rule that I mentioned before that when the principal and obligee caused a material alteration of the underlying obligation without the consent of the guarantor the guarantor is discharged from further liability in that situation bambor was compelled to provide evidence in his defense of the material material alteration was without his consent unfortunately for him the evidence showed that bambor was simultaneously fulfilling both roses in obligee on the debt in his professional roles head of the borrower and as a guarantor under the ongoing security agreement as principal the borrower there for bambor was unable to prove that any material alteration of the underlying obligation was without his consent so as to discharge him from personal liability so the lender one but even though the lender prevailed and there are plenty of other cases that provide the same lesson having us preferably us litigate is expensive so the moral is if as a lender you intend to refinance or modified deal each and every party that you want to answer for the debt should sign off on the new loan documents each and every time this is particularly true of your materially altering the obligation get the guarantors to sign another guarantee or get the accommodation party to sign a note modification lenders should you should take the view that it's an entirely new transaction even if the original documents have savings clauses or future indebtedness clauses those are litigation traps the though there's pain and it's cumbersome to have to trot these folks into the office and have them sign new guarantees it'll be worth the effort and you could save years and thousands of dollars on the back end you