New Bill Would Stop Slumlords Buying Foreclosed Homes
Published by Cash Flow Deals · Last updated 2026-08-05
Indiana House Bill 1048 was introduced to block bad-acting landlords from buying homes at online foreclosure sales, after businessman Marshall Welton lured 17 low-income Hispanic Indianapolis households into a predatory rent-to-buy scheme between 2015 and 2017. He was later sued and settled with authorities, according to the IndyStar.
| Factor | Traditional Listing | Cash Flow Deals |
|---|---|---|
| Who ends up owning the house | Whoever wins at auction, including operators the state is trying to regulate | A real FHA or conventional homebuyer, vetted by their own lender |
| Contract structure | A foreclosure auction sale has no negotiation on terms | Net price locked with the seller in advance, before repairs are scoped |
| Path to closing | An auction sale can transfer to a buyer with no accountability track record | Title transfers once, directly seller to buyer, through novation |
What prompted the bill
The IndyStar reported that businessman Marshall Welton ran a predatory "rent-to-buy" scheme from 2015 to 2017, luring 17 low-income Hispanic Indianapolis households into arrangements that ultimately cost them money and stability. Welton was sued and reached a settlement with authorities. Indiana House Bill 1048 followed, aimed at keeping operators with that kind of track record from acquiring foreclosed homes at online foreclosure sales in the first place.
Why foreclosure sales became the entry point
Foreclosure sales move properties out of a distressed homeowner's hands and into whoever shows up with a bid, with little vetting of the buyer's history. That structure is what let an operator like Welton keep acquiring properties despite a documented pattern of predatory deals. Lawmakers' response, also covered separately by WFYI's public affairs desk, was to propose shutting bad-acting landlords out of that pipeline entirely rather than trying to police them property by property after the fact.
What this means for a homeowner trying to avoid the auction altogether
The safest way to avoid ending up as a data point in this exact story is to never reach the auction step. A homeowner who sells before a sheriff's sale date chooses their own buyer instead of whoever wins a bid. A seller who wants that certainty without gambling on a traditional listing's timeline can request a locked net-price offer from a real estate investment company before repairs are scoped, then use those funds to catch up with a lender or simply exit on their own terms.
Common questions
What is Indiana House Bill 1048?
It's legislation introduced to block bad-acting landlords from buying homes at online foreclosure sales, prompted by a documented predatory rent-to-buy scheme, according to the IndyStar's February 2022 reporting.
Who was Marshall Welton and why did his case matter to this bill?
Welton was a businessman the IndyStar reported lured 17 low-income Hispanic Indianapolis households into a predatory rent-to-buy scheme from 2015 to 2017. He was sued and settled with authorities, becoming the case lawmakers pointed to when drafting the bill.
How does a foreclosure auction differ from a regular home sale?
At a foreclosure auction, the property goes to whoever bids successfully, with little vetting of the buyer's track record. A regular sale lets the homeowner choose and vet their own buyer before agreeing to terms.
Can a homeowner avoid a foreclosure auction if they act early enough?
Yes. Selling before a sheriff's sale date, including through a locked net-price offer from a real estate investment company, lets a homeowner choose their buyer instead of leaving it to whoever wins an auction bid.
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What this means for your options
Rising mortgage delinquency is often the first sign of a softening local market. Homeowners who move before their equity position weakens keep more control over the outcome.
Wait and see
Keep the property as-is and hope conditions improve. The mortgage, insurance, and upkeep keep costing money while you wait, with no set date for things to turn around.
List with a traditional agent
Standard MLS listing, typically 5-6% in commission, and a financed buyer whose deal depends on appraisal, inspection, and lender approval — any of which can fall through after weeks on market.
Sell to Cash Flow Deals
No repairs, no showings, no financing contingency on your side — our novation structure connects you with a bank-financed buyer at a price locked at signing. A no-obligation offer, usually within one business day.
See your no-obligation cash offer before you decide anything.