Some random notes (taken during the Indiana Law Update) from mortgage section, in no particular order or emphasis on importance:
-Indiana doesn’t have a good process for liquidating mixed collateral — realty and personalty.
-Home equity line of credit as second mortgage often doesn’t get extinguished when its paid off to zero. There has to be notice. Typically, if the second mortgage holder starts advancing money again, it doesn’t lose its priority. (However, sometimes it does.)
-Credit bid of mortgage holder foreclosing establishes the amount of credit a debtor is entitled to on their overall debt. So, if a creditor obtains title at Sheriff’s sale by bidding in a judgment of $1 million, turns around and finds it can only sell the property for $500k; it doesn’t matter. The debtor still gets a $1 M credit. (Goes the other way too – if the creditor sells the property for a profit over the credit bid, the debtor doesn’t get extra money credited against its overall debt.)
Liquidation of “mixed collateral”, by which I assume you mean a loan secured by both personal and real property, is usually liquidated by the same means, usually Sheriff’s Sale, with real estate being sold first.
However, sometimes personal property is ordered to be delivered to the lienholder, who can then sell in a “commercially reasonable” manner at public or private sale and apply the net proceeds to the debt owed.
Short lesson, if you don’t do creditor’s rights on a regular basis, and you have a client with such rights, either engage a creditor’s rights attorney as co-counsel, or refer the entire matter to an experienced creditor’s rights attorney.
This is not a solicitation of legal employment, just offering some additional information.
Yup.