February 28, 2003





SENATE BILL No. 202

_____


DIGEST OF SB 202 (Updated February 27, 2003 11:44 AM - DI 105)



Citations Affected: IC 32-29.

Synopsis: Equitable subrogation. Provides that a mortgagee may not be denied equitable subrogation solely because the mortgagee is a lender and had constructive notice of the intervening lien, the lien was released, or the mortgagee obtained title insurance.

Effective: July 1, 2003.





Clark




    January 9, 2003, read first time and referred to Committee on Insurance and Financial Institutions.
    February 27, 2003, reported favorably _ Do Pass.






February 28, 2003

First Regular Session 113th General Assembly (2003)


PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
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SENATE BILL No. 202



    A BILL FOR AN ACT to amend the Indiana Code concerning property.

Be it enacted by the General Assembly of the State of Indiana:

    SECTION 1. IC 32-29-1-11 , AS ADDED BY P.L.2-2002, SECTION 14, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2003]: Sec. 11. (a) This chapter does not limit:
        (1) the right to assign, mortgage, or pledge the rents and profits arising from real estate;
        (2) the right of an assignee, a mortgagee, or a pledgee to collect rents and profits for application in accordance with an assignment, a mortgage, or a pledge; or
        (3) the power of a court of equity to appoint a receiver to take charge of real estate to collect rents and profits for application in accordance with an assignment, a mortgage, or a pledge.
    (b) A person may enforce an assignment, a mortgage, or a pledge of rents and profits arising from real property:
        (1) whether the person has or does not have possession of the real estate; and
        (2) regardless of the:
            (A) adequacy of the security; or


            (B) solvency of the assignor, mortgagor, or pledgor.
    (c) If a person:
        (1) enforces an assignment, a mortgage, or a pledge of rents and profits arising from real estate; and
        (2) does not have possession of the real estate;
the obligations of a mortgagee in possession of real estate may not be imposed on the holder of the assignment, mortgage, or pledge.
     (d) Except for those instances involving liens defined in IC 32-28-3-1 , a mortgagee seeking equitable subrogation with respect to a lien may not be denied equitable subrogation solely because:
        (1) the mortgagee:
            (A) is engaged in the business of lending; and
            (B) had constructive notice of the intervening lien over which the mortgagee seeks to assert priority;
        (2) the lien for which the mortgagee seeks to be subrogated was released; or

        (3) the mortgagee obtained a title insurance policy.