Short Sales & Foreclosures in Indiana (2025): What Agents, Homeowners & Investors Need to Know
Indiana is not typically the first state people think of when discussing housing distress — but 2025 has changed that narrative. With rising foreclosure activity, increasing vacancy issues, and significant pockets of local distress, more owners and agents in Indiana are being forced into tough decisions about how to handle mortgage hardship.
This is where the short sale becomes an essentia tool — and where agents close short sales faster becomes more important than ever..
Learn more about how we help real estate agents close short sales faster.
In today’s breakdown, we’ll look at what’s really happening across Indiana, where the pressure is building, and why short sales are becoming a smarter (and often overlooked) alternative to foreclosure for thousands of homeowners.
Indiana’s Foreclosure Landscape in 2025
Indiana is now in the Top 10 for Foreclosure Rates
In the first half of 2025, Indiana logged foreclosure filings on 0.18% of all housing units — about 1 in every 556 homes. That places the state among the 10 worst foreclosure rates in the country.
When the overall rate climbs that high, you can assume three things:
1. Many homeowners are underwater.
2. Loan modifications are being denied more frequently.
3. Short sales are about to surge.
For agents, this is exactly when understanding short sales becomes a strategic differentiator — especially when you can rely on an expert to manage negotiation and approval so you stay focused on listings and closings.
October 2025: 668 New Filings in a Single Month
By October 2025, Indiana recorded 668 foreclosure filings statewide — approximately 1 in every 4,421 housing units.
This month-to-month consistency in filings shows that distress isn’t spiking — it’s ongoing. That means homeowners in hardship aren’t just a small category anymore; they’re a major segment of the market.
Indiana Ranked 8th Nationally by Foreclosure Count
ATTOM’s 2025 data puts Indiana 8th in the nation, with:
- 937 total foreclosures
- A statewide rate of 1 in every 3,129 households
For context, that means Indiana has more foreclosure activity than many larger states — and far more than markets previously considered “high-risk.”
Short sales are becoming an increasingly necessary alternative to prevent these numbers from getting worse — and to help owners escape years of credit damage. When they choose that route, many rely on resources like short sale processing and lender negotiation through Crisp Short Sales.
Often, the biggest barrier to completing these transactions is simply having someone who knows how to prepare the file, manage the lender’s process, and keep the transaction moving.
The Hotspot: Marion County (Indianapolis)
If Indiana is heating up, Marion County is the boiling point.
Marion County Distress Snapshot
- 899 foreclosure starts between January–July 2025
- Roughly 1 in every 234 owner-occupied homes
- 1,630 filings in 2024 — the highest since 2018
- Foreclosure rates rising three consecutive years
Marion County’s volume is so heavy that even well-qualified sellers can get stuck in stalled foreclosure timelines or unresponsive servicers.
is exactly where short sales help prevent the worst-case scenario. For distressed sellers, starting a short sale early — especially a guided page like how we help homeowners avoid foreclosure through a short sale — can keep the process controlled instead of chaotic.
Zombie Foreclosures: Indiana’s Quiet (But Growing) Problem
A “zombie foreclosure” means a property is vacant while going through foreclosure — a double hit for neighborhoods, comps, and local governments.
Indiana has 219 zombie foreclosures as of Q4 2025, which is:
- 6.4% of all statewide foreclosures
- The 8th highest concentration nationally
Vacant distressed homes pull down neighborhood values, attract vandalism, and interfere with traditional sales.
Short sales prevent zombie foreclosures because the owner stays engaged in the process — signing documents, communicating with lenders, cooperating with agents — instead of disappearing and letting the property deteriorate.
Why Indiana Agents Are Leaning on Short Sales More Than Ever
Between underwater mortgages, higher interest rates, and accelerating foreclosure timelines, Indiana agents are turning to short sales as a strategic listing opportunity, not an inconvenience.
The catch? Short sales only work smoothly when the lender negotiation is handled by an expert. Agents don’t have the time — or desire — to chase loss mitigation departments for 6–12 weeks.
That’s why many Indiana agents work with a third-party short sale negotiation service like Crisp.
They stay in control of the listing, the commission, and the client relationship — while we manage the bank.
If a homeowner is ready to begin, they can do so instantly through the start a short sale intake form.
Why Short Sales Are Often Better Than Foreclosure in Indiana
For homeowners:
- Avoid foreclosure reporting on credit
- Avoid eviction
- Often get relocation assistance paid at closing
- Walk away with a clean break
For investors & agents:
- Faster closings
- Improved deal structure
- Less risk of lender delays or denials
- A dedicated file manager who keeps everything moving
Short sales are not “easy,” but with experience and structure, they are absolutely winnable — especially in a state like Indiana where lender volume is rising but not yet overloaded.
Indiana’s 2025 foreclosure data tells a clear story:
Distress is growing, and short sales are becoming a critical exit path for thousands of homeowners.
Agents who know how to spot early signs of hardship — and who partner with a reliable specialist to handle the lender side — will separate themselves quickly as the market continues shifting.
If you’re an Indiana agent with a complicated file, a dead-end lender, or a seller overwhelmed by the process, you don’t have to manage it alone. Short sales work best when the negotiation is handled by someone who does it every day — and that’s where Crisp steps in.