Indiana Foreclosure Defense Answer, Counterclaims, Settlement Conference & Loss Mitigation Package (Judicial)

INDIANA FORECLOSURE DEFENSE ANSWER, COUNTERCLAIMS, SETTLEMENT CONFERENCE & LOSS MITIGATION PACKAGE

(Judicial Foreclosure)

PART 1 — PRE-DEFENSE INTAKE CHECKLIST

Documents to Gather

☐ Pre-suit 30-day notice under IC 32-30-10.5-8 (and certified mail receipt)
☐ Complaint and Summons (verify settlement-conference notice on page 1)
☐ Note (all indorsements/allonges) and recorded Mortgage
☐ All Assignments of Mortgage (recorded)
☐ Full servicing payment history
☐ Loss-mitigation file (applications, denials)
☐ Breach / acceleration letter
☐ Reg X / Reg Z notices
☐ Title commitment

Statutory Audit

☐ Was IC 32-30-10.5-8 pre-suit notice mailed by certified mail at least 30 days before filing?
☐ Was the IFPN contact information included?
☐ Was the settlement-conference notice printed on page 1 of the summons under IC 32-30-10.5-8(c)(2)?
☐ Federal 120-day rule satisfied (12 C.F.R. § 1024.41(f))?
☐ Live-contact and 45-day notices under 12 C.F.R. § 1024.39?
☐ Loss-mitigation application timing under 12 C.F.R. § 1024.41(g)?
☐ Sheriff's sale advertisement: posted at courthouse AND published in newspaper for three weeks, beginning at least 30 days before sale (IC 32-29-7-3)?

PART 2 — VERIFIED ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS

STATE OF INDIANA
COUNTY OF [_______________]
[CIRCUIT / SUPERIOR] COURT

Cause No. [_______________]

DEFENDANT'S VERIFIED ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS

Defendant [_______________], by counsel, answers Plaintiff's Complaint as follows:

ANSWER

1. Defendant is without sufficient information to admit or deny the allegations of Paragraph 1 and therefore DENIES the same.
2. Defendant ADMITS / DENIES the allegations of Paragraph 2 [as appropriate — list paragraph by paragraph].
3. [Continue paragraph by paragraph; admit facts indisputably true (e.g., property address), deny everything else, plead "without sufficient information to admit or deny" where applicable.]

[Repeat through every numbered paragraph.]

GENERAL DENIAL: Each allegation not expressly admitted is DENIED.

AFFIRMATIVE DEFENSES (Ind. Trial Rule 8(C))

1. Lack of Standing / Real Party in Interest (T.R. 17(A)). Plaintiff is not the holder of the Note or the beneficial owner of the Mortgage and lacks standing.
2. Failure to State a Claim. The Complaint fails to state a claim upon which relief may be granted (T.R. 12(B)(6)).
3. Failure to Provide Pre-Suit Notice. Plaintiff failed to send the 30-day pre-suit notice required by IC 32-30-10.5-8 by certified mail.
4. Failure to Include Settlement-Conference Notice on Summons as required by IC 32-30-10.5-8(c)(2).
5. Failure to Satisfy Conditions Precedent under the Mortgage (notice of default, opportunity to cure, 30-day cure period required by paragraph 22 of standard Fannie/Freddie uniform instrument).
6. Anti-Dual-Tracking / RESPA Violation. Plaintiff/Servicer moved for judgment or sale while a complete loss-mitigation application was pending (12 C.F.R. § 1024.41(g)).
7. Failure of Federal 120-Day Rule. Foreclosure was filed within 120 days of the earliest delinquency (12 C.F.R. § 1024.41(f)).
8. Unclean Hands / Estoppel / Waiver. Plaintiff or its servicer waived strict compliance by accepting payments after default / by promising modification.
9. Payment / Accord and Satisfaction.
10. Statute of Limitations. Ind. Code § 34-11-2-9 (note actions: 6 years for written contracts under § 34-11-2-7); mortgage foreclosure may be limited under IC 32-28-4-1, IC 32-28-4-2.
11. Improper Application of Payments / Inaccurate Accounting.
12. Force-Placed Insurance and Junk Fees Inflate the Default.
13. Violation of Federal Servicing Rules (12 C.F.R. §§ 1024.35, 1024.36, 1024.39, 1024.41).
14. Failure of Mortgage Recording / Defective Assignment.
15. HUD / VA / USDA / Fannie / Freddie servicing prerequisites not satisfied (face-to-face meeting under 24 C.F.R. § 203.604, etc.).
16. Right of Reinstatement under IC 32-30-10-11 has not been honored.

COUNTERCLAIMS

Defendant/Counter-Plaintiff brings the following Counterclaims under T.R. 13 against Plaintiff/Counter-Defendant:

Count I — Violation of RESPA / Regulation X (12 U.S.C. § 2605; 12 C.F.R. §§ 1024.35, 1024.36, 1024.39, 1024.41). Servicer failed to acknowledge / timely respond to Notices of Error and Requests for Information; failed to make live early-intervention contact within 36 days of delinquency; failed to send 45-day written notice; failed to evaluate the complete loss-mitigation application; and dual-tracked the foreclosure. Damages, statutory damages up to $2,000/violation, attorney's fees, and costs are sought under 12 U.S.C. § 2605(f).

Count II — Violation of FDCPA (15 U.S.C. § 1692 et seq.). Plaintiff (or its foreclosure attorneys) is a debt collector who made false, deceptive, or misleading representations (§ 1692e) and used unfair or unconscionable means to collect (§ 1692f). Damages, statutory damages up to $1,000, fees and costs under § 1692k.

Count III — Violation of FCRA (15 U.S.C. § 1681s-2(b)). After dispute through one or more consumer reporting agencies, Plaintiff/Servicer failed to conduct a reasonable investigation and continued to report inaccurate tradeline data. Damages, statutory and punitive damages, fees and costs under §§ 1681n, 1681o.

Count IV — Indiana Deceptive Consumer Sales Act (IC 24-5-0.5). Defendant's mortgage servicing constitutes a "consumer transaction"; Plaintiff committed deceptive acts including [_______________]. Damages, treble damages capped at $1,000 per violation, fees and costs.

Count V — Breach of Contract. Plaintiff materially breached the Note and Mortgage by failing to provide required cure notice, by failing to apply payments, and by charging unauthorized fees.

Count VI — Quiet Title (Ind. Code § 32-30-3-13). The chain of recorded assignments contains void or fraudulent instruments and does not vest beneficial title in Plaintiff.

Count VII — Slander of Title.

JURY DEMAND

Defendant demands trial by jury on all issues so triable.

PRAYER

WHEREFORE, Defendant respectfully requests that:
(a) The Complaint be dismissed with prejudice;
(b) Judgment be entered for Defendant on the Counterclaims;
(c) Damages, statutory damages, treble damages, costs, and attorney's fees be awarded;
(d) Title to the Property be quieted in Defendant; and
(e) Such other relief as is just.

VERIFICATION

I affirm under the penalties for perjury that the foregoing representations are true to the best of my knowledge and belief.

Date: [__/__/____]

_______________________________
[Defendant signature]

_______________________________
[Attorney name, Atty No.]
[Firm, address, phone, email]

PART 3 — REQUEST FOR FORECLOSURE SETTLEMENT CONFERENCE (IC § 32-30-10.5-9)

TO THE CLERK OF THE [____] COURT:

Pursuant to Ind. Code § 32-30-10.5-9 and the Notice on the Summons, Defendant [_______________] hereby requests a Foreclosure Settlement Conference in this matter. This request is filed within 30 days of service of the Complaint.

Defendant requests that the Court:

1. Schedule a Settlement Conference at the courthouse at a date no earlier than 25 days and no later than 60 days from the date of the Court's notice;
2. Order Plaintiff to bring a complete transaction history of the mortgage to the conference;
3. Order Plaintiff's representative at the conference to have full authority to bind Plaintiff to a foreclosure-prevention agreement;
4. Order that no judgment may be entered prior to the conference under IC 32-30-10.5-10.

Defendant has contacted (or will contact) a HUD-approved mortgage foreclosure counselor and intends to participate in good faith.

Date: [__/__/____]

_______________________________
[Defendant / Counsel]

PART 4 — MOTION TO DISMISS FOR LACK OF STANDING

MEMORANDUM IN SUPPORT OF MOTION TO DISMISS (T.R. 12(B)(6) AND 17(A))

Plaintiff bears the burden of demonstrating that it is the holder of the Note and the beneficial owner of the Mortgage. The exhibits attached to the Complaint reveal:

1. The Note attached is not indorsed to Plaintiff or in blank;
2. The recorded chain of Assignments contains gaps;
3. Plaintiff has not pled facts establishing chain of holder status;
4. Plaintiff is not the real party in interest under T.R. 17(A).

WHEREFORE, Defendant requests dismissal under T.R. 12(B)(6) and T.R. 17(A).

PART 5 — LOSS MITIGATION APPLICATION PACKAGE (Regulation X)

Cover Letter

[Date]
[Servicer]
Loss Mitigation Department
[Address]

Re: Loss Mitigation Application — Loan No. [_______________]
Borrower: [_______________]
Property: [_______________]

Enclosed is a COMPLETE loss-mitigation application. Please evaluate Borrower for ALL options under 12 C.F.R. § 1024.41(c):

☐ Loan modification (flex / streamline)
☐ Repayment plan
☐ Forbearance
☐ Partial claim (FHA) / Deferral
☐ Short sale
☐ Deed-in-lieu

Dual-tracking is prohibited under § 1024.41(g) while this application is pending.

Documents enclosed:

☐ Borrower Assistance Form 710 (or servicer-equivalent)
☐ IRS Form 4506-C
☐ 2 months of pay stubs (or P&L for self-employed)
☐ 2 years of federal tax returns
☐ 2 months of bank statements
☐ Hardship letter
☐ Monthly budget
☐ Award letters (if applicable)
☐ Utility bill (occupancy)

Hardship Letter

I, [_______________], am the borrower on Loan No. [_______________] for property at [_______________]. I am requesting loss mitigation because of [hardship: e.g., job loss on [__/__/____]; medical illness; divorce; death of co-borrower; disaster; reduction in income].

I intend to ☐ retain ☐ vacate the property. I request [modification / forbearance / short sale / deed-in-lieu]. My current verified monthly income is $[________] and I can afford a payment of approximately $[________].

Signed: _______________________

PART 6 — LOAN MODIFICATION REQUEST

[Date]

[Servicer Loss Mitigation]
[Address]

Re: Formal Loan Modification Request — Loan No. [_______________]

Borrower respectfully requests a permanent loan modification with the following terms:

Borrower's gross monthly income: $[________]. Target front-end DTI: [____]%.

Pursuant to 12 C.F.R. § 1024.41(c), Borrower requests a written decision within 30 days for any complete application received more than 37 days before sale.

_______________________________
[Borrower / Counsel]

PART 7 — RESPA NOTICE OF ERROR AND REQUEST FOR INFORMATION

[Date]

[Servicer]
Attn: Customer Resolution / Designated Address
[Address]

Re: Loan No. [_______________] Borrower: [_______________]

NOTICE OF ERROR AND REQUEST FOR INFORMATION under 12 C.F.R. §§ 1024.35 and 1024.36.

Errors Asserted:
☐ Failure to credit a payment as of the date of receipt;
☐ Improper fee, force-placed insurance premium, attorney fee, BPO, or inspection charge;
☐ Dual-tracking the foreclosure;
☐ Failure to evaluate loss-mitigation application;
☐ Inaccurate payoff or reinstatement quote;
☐ Other: [_______________].

Information Requested:

1. Complete life-of-loan transaction history;
2. Owner / assignee identity (also under 15 U.S.C. § 1641(f)(2));
3. Master servicer and subservicer identification;
4. Note, allonges, indorsements;
5. All recorded assignments;
6. Loss-mitigation evaluations and denial reasons;
7. Force-placed insurance documentation;
8. Escrow statements since origination;
9. Internal communications about the foreclosure decision.

Acknowledge in 5 business days; respond within 30 business days (with permitted 15-day extension).

_______________________________
[Borrower / Counsel]

PART 8 — DISCOVERY DEMAND (FIRST SET)

INTERROGATORIES

1. Identify every entity that has held or owned the Note from origination.
2. Identify the present owner / investor.
3. Identify all servicers, subservicers, and default vendors.
4. Provide the complete life-of-loan payment history.
5. Identify every loss-mitigation application submitted and the disposition.
6. State the date and basis for the foreclosure referral.
7. Identify all attempts at live-contact early-intervention under 12 C.F.R. § 1024.39.
8. Identify each force-placed insurance policy and premium charged.
9. Identify each property inspection / BPO charged.

REQUESTS FOR PRODUCTION

1. Original Note (and all allonges) for inspection;
2. Recorded Mortgage and all recorded Assignments;
3. Life-of-loan transaction history;
4. Loss-mitigation files;
5. All RESPA correspondence and responses;
6. Collection notes / call logs;
7. Applicable servicing guidelines (PSA, Fannie/Freddie/HUD/VA);
8. Affidavits filed in any prior bankruptcy or foreclosure for this loan;
9. Force-placed insurance documentation and CPI vendor contracts;
10. Internal communications regarding foreclosure referral.

REQUESTS FOR ADMISSION

1. Admit Plaintiff is not in possession of the original Note.
2. Admit the IC 32-30-10.5-8 pre-suit notice was not sent by certified mail at least 30 days before filing.
3. Admit no live-contact early-intervention attempt was made within 36 days of delinquency.
4. Admit Plaintiff has not responded to Borrower's RESPA Notice of Error within 30 business days.
5. Admit dual-tracking occurred while a complete loss-mitigation application was pending.

PART 9 — REDEMPTION AND REINSTATEMENT REFERENCE

• Reinstatement before judgment — pay all arrears, late fees, and costs to dismiss the foreclosure (IC 32-30-10-11).
• Reinstatement after judgment, before sale — court will stay the foreclosure.
• Statutory redemption from judgment — Borrower may redeem the real estate from the judgment under IC 32-29-7-7 BEFORE the sheriff's sale by paying the full judgment, interest, and costs. Indiana has NO post-sale redemption.
• Possession — Borrower may retain possession until sale under IC 32-29-7-11(b).
• Deficiency — Court order required; subject to IC 32-29-7-5; may be waived if mortgage so provides.

PART 10 — BANKRUPTCY REFERRAL

When to refer:
☐ Sheriff's sale is imminent and litigation defenses will not stop the sale.
☐ Borrower has regular income for a Ch. 13 plan to cure over 60 months.
☐ Junior liens may be stripped.
☐ Multiple co-debtors need § 1301 stay.

Information needed:
☐ 6 months pay stubs; 2 years tax returns
☐ Creditor list with balances
☐ Real-estate values; vehicle equity
☐ Sheriff's sale date and sheriff contact
☐ Credit counseling certificate (within 180 days BEFORE filing under 11 U.S.C. § 109(h))
☐ Prior bankruptcy filings (assess § 362(c)(3) stay-extension motion if needed)

Filing imposes the automatic stay (11 U.S.C. § 362). Notify sheriff, foreclosure counsel, and Indiana court immediately. File Ch. 13 plan curing arrears over up to 60 months (11 U.S.C. § 1322(b)(5)).

SOURCES AND REFERENCES

• Ind. Code §§ 32-29-7-1 through -14
• Ind. Code §§ 32-30-10-1 through -13
• Ind. Code §§ 32-30-10.5-1 through -16
• Ind. Trial Rules 6, 8, 12, 13, 17, 56
• 12 C.F.R. Part 1024 (Regulation X)
• 15 U.S.C. §§ 1641(f)(2), 1681 et seq., 1692 et seq.
• 11 U.S.C. §§ 362, 506, 1322, 1328
• Ind. Code § 24-5-0.5 (Deceptive Consumer Sales Act)
• Indiana Foreclosure Prevention Network: 877-GET-HOPE

LEGAL DISCLAIMER: This is not legal advice. Indiana foreclosure deadlines are short. Consult a licensed Indiana attorney.