Our lending institution provided a downpayment grant for a household that is now facing foreclosure. What is the members responsibility?
The lender or its designee is required to make an appearance on behalf of the FHLBI to acknowledge that the lien is valid. If, after foreclosure, the lender is unable to recover enough funds from the proceeds from the sheriff’s sale to repay the grant, the grant is forgiven. The lender will be required to provide FHLBI with a closing statement or other documentation that validates that the proceeds at sale were insufficient to repay the grant.
