Citations Affected: IC 4-6-12; IC 5-20; IC 6-1.1-12-43; IC 23-2-5; IC 24-4.4; IC 24-4.5;
IC 24-9-3-6; IC 25-34.1-8-10; IC 27-7; IC 34-55-10-2.
Synopsis: Mortgage lending. Conference committee report for EHB 1359. Requires the homeowner protection unit (unit) within the attorney general's office to: (1) establish a new toll free telephone number; or (2) designate an existing toll free telephone number; to receive calls from persons having information about suspected fraudulent residential real estate transactions. Unless otherwise prohibited by law, requires the unit to share information reported by callers to the telephone number with appropriate law enforcement and regulatory agencies not later than 15 business days after the unit determines the appropriate entity to which the information should be referred. Allows the Indiana housing and community development authority (authority) to make or participate in the making of: (1) construction loans; and (2) mortgage loans; for multiple family residential housing under terms approved by the authority. Requires the authority to ensure that a mortgage loan: (1) acquired by the authority; or (2) made by a mortgage lender with funds provided by the authority; may not knowingly be made to a person whose adjusted family income exceeds 125% of the median income for the geographic area involved. For purposes of allocating federal low income housing credits, provides that a "qualified building" is a building that is used or will be used to provide residential housing for special needs populations. (Current law provides that a "qualified building" is a building that is used or will be used to provide residential housing for persons with disabilities.) Provides that the authority's authority to issue bonds is subject to the approval of the public finance director. (Current law provides that the authority's bonding authority is subject to the approval of the governor.) Repeals provisions concerning job and contract awarding preferences for the authority's program for making or participating in the making of mortgage loans for multiple family residential housing. Repeals provisions concerning the articles of incorporation of sponsors, builders, or developers of multiple family residential housing. Eliminates the exemption from the loan broker statute for: (1) persons authorized to make loans on behalf of, or insured by, certain federal agencies; and (2) licensed real estate brokers and salespersons who render loan related services in a real estate transaction. Specifies that evidence of compliance with the licensing and registration requirements for loan brokers, originators, and principal managers may include a national criminal history background check by the Federal Bureau of Investigation (FBI). Specifies that the securities commissioner (commissioner) shall require each: (1) equitable owner of a loan brokerage business; and (2) applicant for registration as an originator or a principal manager; to
submit fingerprints for a national criminal history background check by the FBI. Prohibits the commissioner from releasing the results of a national criminal history background check to a private entity. Removes a provision in existing law allowing the commissioner to check the qualifications and background of each: (1) equitable owner of a loan brokerage business; and (2) applicant for registration as an originator or a principal manager; by accessing a multistate automated licensing system for mortgage brokers and originators. Allows the commissioner to designate a multistate automated licensing system and repository as the sole entity responsible for processing applications for: (1) licenses for loan brokers; and (2) certificates of registration for originators and principal managers. Specifies that a loan broker is subject to the state statute requiring disclosure of a breach of the security of any records: (1) maintained by the broker; and (2) containing the personal information of a borrower or prospective borrower. Prohibits loan brokers, originators, and principal managers from disposing of unencrypted, unredacted personal information with respect to borrowers or prospective borrowers without first taking certain actions to render the personal information illegible or unusable. Prohibits a person from performing specified acts in connection with a contract for the services of a loan broker. Provides that: (1) first lien mortgage transactions are subject to regulation by; and (2) creditors making first lien mortgage transactions must be licensed by; the department of financial institutions. Requires a creditor, a mortgage servicer, or an agent of a creditor to acknowledge a written offer made in connection with a proposed short sale of property that is subject to a mortgage transaction that is at least 60 days delinquent. Provides that the acknowledgment must be provided not later than 10 business days after the date of the offer. Requires the creditor, servicer, or agent to accept or reject the short sale offer not later than 30 business days after receipt of the offer. Requires the real estate appraiser licensure and certification board to require each initial applicant for licensure or certification as a real estate appraiser to submit fingerprints for a national criminal history background check by the FBI. Prohibits the board from releasing the results of a national criminal history background check to a private entity. Requires the department of insurance to establish an electronic system for the collection and storage of the following information concerning residential mortgage transactions: (1) An identification of the property involved in the transaction. (2) The names and license, registration, or certificate numbers of certain professionals participating in or assisting with the transaction. (3) The date on which the closing agent received the information necessary to allow the closing agent to complete the HUD-1 or HUD-1A settlement statement. (4) The date of the closing. Provides that the system must allow closing agents to: (1) input the required information; and (2) submit the form electronically to a data base maintained by the department of insurance. Requires the professionals involved in the transaction to submit their names and license, registration, or certificate numbers to the closing agent in the transaction not later than the time of the closing. Requires the department of insurance to make the data base accessible to: (1) the state agencies responsible for regulating the specified professionals; and (2) the homeowner protection unit in the attorney general's office. Allows the department of insurance to adopt rules to: (1) implement the system; and (2) establish an administrative fee to cover the department's expenses in establishing and maintaining the system. Specifies permissible uses by the department of insurance of funds in the title insurance enforcement fund. Provides that, with respect to a debtor domiciled in Indiana, money in a health savings account established under the Internal Revenue Code is exempt in a bankruptcy proceeding. Requires various state agencies to form the mortgage lending and fraud prevention task force to coordinate the state's efforts to: (1) regulate the various participants involved in originating, issuing, and closing home loans; (2) enforce state laws and rules concerning mortgage lending practices and mortgage fraud; and (3) prevent fraudulent practices in the home loan industry. Requires the Indiana housing and community development authority to provide, not later than November 1, 2008, a report to the legislative council that includes the following: (1) An identification of new and existing funding sources that can be used to assist Indiana homeowners in refinancing their existing mortgage transactions, in order to prevent the foreclosure of the homes secured by the mortgages. (2) A plan for the rehabilitation of areas in Indiana that have been adversely or disproportionately affected by mortgage foreclosures. Requires the securities commissioner and the director of the department of financial institutions to cooperate to determine the appropriate state agency or
department to regulate a person subject to regulation, licensure, or registration under both: (1)
the loan broker statute; and (2) the provisions of this act providing that first lien mortgage
transactions are subject to regulation by the department of financial institutions. (This
conference committee report: (1) adds the provisions described in the digest; and (2)
removes provisions making various changes to the laws concerning financial institutions.)
Effective: Upon passage; July 1, 2008; January 1, 2009.
MADAM PRESIDENT:
Your Conference Committee appointed to confer with a like committee from the House
upon Engrossed Senate Amendments to Engrossed House Bill No. 1359 respectfully reports
that said two committees have conferred and agreed as follows to wit:
that the House recede from its dissent from all Senate amendments and that
the House now concur in all Senate amendments to the bill and that the bill
be further amended as follows:
Delete the title and insert the following:
A BILL FOR AN ACT to amend the Indiana Code concerning trade
regulation.
Delete everything after the enacting clause and insert the following:
federally assisted or assisted by a government sponsored
enterprise, such as the Federal National Mortgage Association,
the Federal Home Loan Mortgage Corporation, or the Federal
Agricultural Mortgage Corporation, the Federal Home Loan
Bank, and other similar entities under terms that are approved
by the authority;
(3) to purchase or participate in the purchase from mortgage
lenders of mortgage loans made to persons of low and moderate
income for residential housing;
(4) to make loans to mortgage lenders for the purpose of
furnishing funds to such mortgage lenders to be used for making
mortgage loans for persons and families of low and moderate
income. However, the obligation to repay loans to mortgage
lenders shall be general obligations of the respective mortgage
lenders and shall bear such date or dates, shall mature at such
time or times, shall be evidenced by such note, bond, or other
certificate of indebtedness, shall be subject to prepayment, and
shall contain such other provisions consistent with the purposes
of this chapter as the authority shall by rule or resolution
determine;
(5) to collect and pay reasonable fees and charges in connection
with making, purchasing, and servicing of its loans, notes, bonds,
commitments, and other evidences of indebtedness;
(6) to acquire real property, or any interest in real property, by
conveyance, including purchase in lieu of foreclosure, or
foreclosure, to own, manage, operate, hold, clear, improve, and
rehabilitate such real property and sell, assign, exchange, transfer,
convey, lease, mortgage, or otherwise dispose of or encumber
such real property where such use of real property is necessary or
appropriate to the purposes of the authority;
(7) to sell, at public or private sale, all or any part of any mortgage
or other instrument or document securing a construction loan, a
land development loan, a mortgage loan, or a loan of any type
permitted by this chapter;
(8) to procure insurance against any loss in connection with its
operations in such amounts and from such insurers as it may deem
necessary or desirable;
(9) to consent, subject to the provisions of any contract with
noteholders or bondholders which may then exist, whenever it
deems it necessary or desirable in the fulfillment of its purposes
to the modification of the rate of interest, time of payment of any
installment of principal or interest, or any other terms of any
mortgage loan, mortgage loan commitment, construction loan,
loan to lender, or contract or agreement of any kind to which the
authority is a party;
(10) to enter into agreements or other transactions with any
federal, state, or local governmental agency for the purpose of
providing adequate living quarters for such persons and families
in cities and counties where a need has been found for such
housing;
(11) to include in any borrowing such amounts as may be deemed
necessary by the authority to pay financing charges, interest on
the obligations (for a period not exceeding the period of
construction and a reasonable time thereafter or if the housing is
completed, two (2) years from the date of issue of the
obligations), consultant, advisory, and legal fees and such other
expenses as are necessary or incident to such borrowing;
(12) to make and publish rules respecting its lending programs
and such other rules as are necessary to effectuate the purposes of
this chapter;
(13) to provide technical and advisory services to sponsors,
builders, and developers of residential housing and to residents
and potential residents, including housing selection and purchase
procedures, family budgeting, property use and maintenance,
household management, and utilization of community resources;
(14) to promote research and development in scientific methods
of constructing low cost residential housing of high durability;
(15) to encourage community organizations to participate in
residential housing development;
(16) to make, execute, and effectuate any and all agreements or
other documents with any governmental agency or any person,
corporation, association, partnership, limited liability company,
or other organization or entity necessary or convenient to
accomplish the purposes of this chapter;
(17) to accept gifts, devises, bequests, grants, loans,
appropriations, revenue sharing, other financing and assistance
and any other aid from any source whatsoever and to agree to, and
to comply with, conditions attached thereto;
(18) to sue and be sued in its own name, plead and be impleaded;
(19) to maintain an office in the city of Indianapolis and at such
other place or places as it may determine;
(20) to adopt an official seal and alter the same at pleasure;
(21) to adopt and from time to time amend and repeal bylaws for
the regulation of its affairs and the conduct of its business and to
prescribe rules and policies in connection with the performance
of its functions and duties;
(22) to employ fiscal consultants, engineers, attorneys, real estate
counselors, appraisers, and such other consultants and employees
as may be required in the judgment of the authority and to fix and
pay their compensation from funds available to the authority
therefor;
(23) notwithstanding IC 5-13, but subject to the requirements of
any trust agreement entered into by the authority, to invest:
(A) the authority's money, funds, and accounts;
(B) any money, funds, and accounts in the authority's custody;
and
(C) proceeds of bonds or notes;
in the manner provided by an investment policy established by
resolution of the authority;
(24) to make or participate in the making of construction loans,
mortgage loans, or both, to individuals, partnerships, limited
liability companies, corporations, and organizations for the
construction of residential facilities for individuals with a
developmental disability or for individuals with a mental illness
or for the acquisition or renovation, or both, of a facility to make
it suitable for use as a new residential facility for individuals with
a developmental disability or for individuals with a mental illness;
(25) to make or participate in the making of construction and
mortgage loans to individuals, partnerships, corporations, limited
liability companies, and organizations for the construction,
rehabilitation, or acquisition of residential facilities for children;
(26) to purchase or participate in the purchase of mortgage loans
from:
(A) public utilities (as defined in IC 8-1-2-1); or
(B) municipally owned gas utility systems organized under
IC 8-1.5;
if those mortgage loans were made for the purpose of insulating
and otherwise weatherizing single family residences in order to
conserve energy used to heat and cool those residences;
(27) to provide financial assistance to mutual housing
associations (IC 5-20-3) in the form of grants, loans, or a
combination of grants and loans for the development of housing
for low and moderate income families;
(28) to service mortgage loans made or acquired by the authority
and to impose and collect reasonable fees and charges in
connection with such servicing;
(29) subject to the authority's investment policy, to enter into
swap agreements (as defined in IC 8-9.5-9-4) in accordance with
IC 8-9.5-9-5 and IC 8-9.5-9-7;
(30) to promote and foster community revitalization through
community services and real estate development;
(31) to coordinate and establish linkages between governmental
and other social services programs to ensure the effective delivery
of services to low income individuals;
(32) to cooperate with local housing officials and plan
commissions in the development of projects that the officials or
commissions have under consideration;
(33) to take actions necessary to implement its powers that the
authority determines to be appropriate and necessary to ensure the
availability of state or federal financial assistance; and
(34) to administer any program or money designated by the state
or available from the federal government or other sources that is
consistent with the authority's powers and duties.
The omission of a power from the list in this subsection does not imply
that the authority lacks that power. The authority may exercise any
power that is not listed in this subsection but is consistent with the
powers listed in this subsection to the extent that the power is not
expressly denied by the Constitution of the State of Indiana or by
another statute.
(b) The authority shall structure and administer any program
conducted ensure that a mortgage loan acquired by the authority
under subsection (a)(3) or made by a mortgage lender with funds
provided by the authority under subsection (a)(4) in order to assure
that no mortgage loan shall is not knowingly be made to a person
whose adjusted family income, shall exceed as determined by the
authority, exceeds one hundred twenty-five percent (125%) of the
median income for the geographic area within which the person resides
and at least forty percent (40%) of the mortgage loans so financed shall
be for persons whose adjusted family income shall be below eighty
percent (80%) of the median income for such area. involved.
However, if the authority determines that additional
encouragement is needed for the development of the geographic
area involved, a mortgage loan acquired or made under subsection
(a)(3) or (a)(4) may be made to a person whose adjusted family
income, as determined by the authority, does not exceed one
hundred forty percent (140%) of the median income for the
geographic area involved. The authority shall establish procedures
that the authority determines are appropriate to structure and
administer any program conducted under subsection (a)(3) or
(a)(4) for the purpose of acquiring or making mortgage loans to
persons of low or moderate income. In determining what
constitutes low income, moderate income, or median income for
purposes of any program conducted under subsection (a)(3) or
(a)(4), the authority shall consider:
(1) the appropriate geographic area in which to measure
income levels; and
(2) the appropriate method of calculating low income,
moderate income, or median income levels including:
(A) sources of;
(B) exclusions from; and
(C) adjustments to;
income.
(c) In addition to the powers set forth in subsection (a), the authority
may, with the proceeds of bonds and notes sold to retirement plans
covered by IC 5-10-1.7, structure and administer a program of
purchasing or participating in the purchasing from mortgage lenders of
mortgage loans made to qualified members of retirement plans and
other individuals. The authority shall structure and administer any
program conducted under this subsection to assure that:
(1) each mortgage loan is made as a first mortgage loan for real
property:
(A) that is a single family dwelling, including a condominium
or townhouse, located in Indiana;
(B) for a purchase price of not more than ninety-five thousand
dollars ($95,000);
(C) to be used as the purchaser's principal residence; and
(D) for which the purchaser has made a down payment in an
amount determined by the authority;
(2) no mortgage loan exceeds seventy-five thousand dollars
($75,000);
(3) any bonds or notes issued which are backed by mortgage loans
purchased by the authority under this subsection shall be offered
for sale to the retirement plans covered by IC 5-10-1.7; and
(4) qualified members of a retirement plan shall be given
preference with respect to the mortgage loans that in the
aggregate do not exceed the amount invested by their retirement
plan in bonds and notes issued by the authority that are backed by
mortgage loans purchased by the authority under this subsection.
(d) As used in this section, "a qualified member of a retirement
plan" means an active or retired member:
(1) of a retirement plan covered by IC 5-10-1.7 that has invested
in bonds and notes issued by the authority that are backed by
mortgage loans purchased by the authority under subsection (c);
and
(2) who for a minimum of two (2) years preceding the member's
application for a mortgage loan has:
(A) been a full-time state employee, teacher, judge, police
officer, or firefighter;
(B) been a full-time employee of a political subdivision
participating in the public employees' retirement fund;
(C) been receiving retirement benefits from the retirement
plan; or
(D) a combination of employment and receipt of retirement
benefits equaling at least two (2) years.
(e) (c) The authority, when directed by the governor, shall
administer programs and funds under 42 U.S.C. 1437 et seq.
(f) (d) The authority shall identify, promote, assist, and fund home
ownership education programs conducted throughout Indiana by
nonprofit counseling agencies certified by the authority using funds
appropriated under section 27 of this chapter. The attorney general and
the entities listed in IC 4-6-12-4(a)(1) through IC 4-6-12-4(a)(10) shall
cooperate with the authority in implementing this subsection.
low income housing credits allocated to the authority under 26 U.S.C.
42. The authority shall allocate credits under this section based on the
proportionate amount of a qualified building that is used to provide
residential housing for persons with disabilities, special needs
populations, as determined by the authority.
(d) The authority shall hold available the allocation made under
subsection (c) for qualified buildings through October 31 of each
calendar year. Beginning November 1 of each calendar year, any part
of the allocation that remains unassigned shall be available for any
appropriate use under 26 U.S.C. 42.
effectuate the purposes of this chapter.
(b) The proceeds of any bonds or notes shall be used solely for the
purposes for which they are issued. The proceeds shall be disbursed in
such manner and under such restrictions, if any, as the authority may
provide in the resolution authorizing the issuance of such bonds or
notes or in the trust agreement securing the same.
(c) Prior to the preparation of definitive bonds, the authority may,
under like restrictions and subject to the approval of the governor,
public finance director appointed under IC 4-4-11-9, issue interim
receipts or temporary bonds, with or without coupons, exchangeable for
definitive bonds when such bonds shall have been executed and are
available for delivery. The authority may also provide for the
replacement of any bonds or notes which shall become mutilated or
shall be destroyed or lost.
(d) The authority shall cooperate with and use the assistance of the
Indiana finance authority established under IC 4-4-11 in the issuance
of the bonds or notes.
JULY 1, 2008]: Sec. 4. (a) A mutual housing association may be
established as a nonprofit corporation incorporated under IC 23-7-1.1
(before its repeal on August 1, 1991) or IC 23-17 to prevent and
eliminate neighborhood deterioration and to preserve neighborhood
stability by:
(1) providing high quality, long term housing for families of low
and moderate income; and
(2) affording community and residential involvement in the
provision of that housing.
(b) The articles of incorporation of a mutual housing association
must meet the requirements of the Indiana housing and community
development authority under IC 5-20-1-6 and must be approved by the
authority.
(c) The articles of incorporation of a mutual housing association
must include a provision that provides that if the mutual housing
association dissolves, is involved in a bankruptcy proceeding, or
otherwise disposes of its physical properties, the association may only
transfer the assets to another entity that provides high quality long term
housing for families of low and moderate income.
closing agent shall:
(1) examine the closing agent to determine compliance with this
section; and
(2) impose and collect penalties under subsection (f). (g).
company, or another group or entity, however organized.
(j) (i) As used in this chapter, "registrant" means an individual who
is registered:
(1) to engage in origination activities under this chapter; or
(2) as a principal manager.
(k) (j) As used in this chapter, "ultimate equitable owner" means a
person who, directly or indirectly, owns or controls ten percent (10%)
or more of the equity interest in a loan broker licensed or required to be
licensed under this chapter, regardless of whether the person owns or
controls the equity interest through one (1) or more other persons or
one (1) or more proxies, powers of attorney, or variances.
(l) (k) As used in this chapter, "principal manager" means an
individual who:
(1) has at least three (3) years of experience:
(A) as a loan broker; or
(B) in financial services;
that is acceptable to the commissioner; and
(2) is principally responsible for the supervision and management
of the employees and business affairs of a licensee.
(l) As used in this chapter, "personal information" includes any
of the following:
(1) An individual's first and last names or first initial and last
name.
(2) Any of the following data elements:
(A) A Social Security number.
(B) A driver's license number.
(C) A state identification card number.
(D) A credit card number.
(E) A financial account number or debit card number in
combination with a security code, password, or access code
that would permit access to the person's account.
(3) With respect to an individual, any of the following:
(A) Address.
(B) Telephone number.
(C) Information concerning the individual's:
(i) income or other compensation;
(ii) credit history;
(iii) credit score;
(iv) assets;
(v) liabilities; or
(vi) employment history.
(m) As used in this chapter, personal information is "encrypted"
if the personal information:
(1) has been transformed through the use of an algorithmic
process into a form in which there is a low probability of
assigning meaning without use of a confidential process or
key; or
(2) is secured by another method that renders the personal
information unreadable or unusable.
(n) As used in this chapter, personal information is "redacted"
if the personal information has been altered or truncated so that
not more than the last four (4) digits of:
(1) a Social Security number;
(2) a driver's license number;
(3) a state identification number; or
(4) an account number;
are accessible as part of the personal information.
imprisonment, unless waived by the commissioner under
subsection (f); (i);
(5) evidence that the applicant, if the applicant is an individual,
has completed the education requirements under section 21 of this
chapter;
(6) the name and registration number for each originator to be
employed by the licensee;
(7) the name and registration number for each principal manager;
and
(8) for each ultimate equitable owner, the following information:
(1) (A) The name of the ultimate equitable owner.
(2) (B) The address of the ultimate equitable owner, including
the home address of the ultimate equitable owner if the
ultimate equitable owner is an individual.
(3) (C) The telephone number of the ultimate equitable owner,
including the home telephone number if the ultimate equitable
owner is an individual.
(4) (D) The ultimate equitable owner's Social Security number
and date of birth, if the ultimate equitable owner is an
individual.
(b) An application for registration as an originator shall be made on
a registration form prescribed by the commissioner. The application
must include the following information for the individual that seeks to
be registered as an originator:
(1) The name of the individual.
(2) The home address of the individual.
(3) The home telephone number of the individual.
(4) The individual's Social Security number and date of birth.
(5) The name of the:
(A) licensee; or
(B) applicant for licensure;
for whom the individual seeks to be employed as an originator.
(6) Consent to service of process under subsection (h).
(7) Evidence that the individual has completed the education
requirements described in section 21 of this chapter.
(8) An application fee of one hundred dollars ($100).
(9) All registration numbers previously issued to the individual
under this chapter, if applicable.
(c) An application for registration as a principal manager shall be
made on a registration form prescribed by the commissioner. The
application must include the following information for the individual
who seeks to be registered as a principal manager:
(1) The name of the individual.
(2) The home address of the individual.
(3) The home telephone number of the individual.
(4) The individual's Social Security number and date of birth.
(5) The name of the:
(A) licensee; or
(B) applicant for licensure;
for whom the individual seeks to be employed as a principal
manager.
immediate irreparable harm, orders and notices as the commissioner
determines to be in the public interest, including cease and desist
orders, orders to show cause, and notices. After notice and hearing, the
commissioner may enter an order of rescission, restitution, or
disgorgement, including interest at the rate of eight percent (8%) per
year, directed to a person who has violated this chapter or a rule or
order under this chapter.
(b) Upon the issuance of an order or notice without a prior hearing
by the commissioner under subsection (a), the commissioner shall
promptly notify the respondent and, if the subject of the order or notice
is a registrant, the licensee for whom the registrant is employed:
(1) that the order or notice has been issued;
(2) of the reasons the order or notice has been issued; and
(3) that upon the receipt of a written request the matter will be set
down for a hearing to commence within fifteen (15) business days
after receipt of the request unless the respondent consents to a
later date.
If a hearing is not requested and not ordered by the commissioner, an
order remains in effect until it is modified or vacated by the
commissioner. If a hearing is requested or ordered, the commissioner,
after notice of an opportunity for hearing, may modify or vacate the
order or extend it until final determination.
(c) The commissioner may deny an application for an initial or a
renewal license or registration, and may suspend or revoke the
license of a licensee or the registration of a registrant if the applicant,
the licensee, the registrant, or an ultimate equitable owner of an
applicant or of a licensee:
(1) fails to maintain the bond required under section 5 of this
chapter;
(2) has, within the most recent ten (10) years:
(A) been the subject of an adjudication or a determination by:
(i) a court with jurisdiction; or
(ii) an agency or administrator that regulates securities,
commodities, banking, financial services, insurance, real
estate, or the real estate appraisal industry;
in Indiana or in any other jurisdiction; and
(B) been found, after notice and opportunity for hearing, to
have violated the securities, commodities, banking, financial
services, insurance, real estate, or real estate appraisal laws of
Indiana or any other jurisdiction;
(3) has:
(A) been denied the right to do business in the securities,
commodities, banking, financial services, insurance, real
estate, or real estate appraisal industry; or
(B) had the person's authority to do business in the securities,
commodities, banking, financial services, insurance, real
estate, or real estate appraisal industry revoked or suspended;
by Indiana or by any other state, federal, or foreign governmental
agency or self regulatory organization;
(4) is insolvent;
(5) has violated any provision of this chapter;
in effect until it is modified or vacated by the commissioner. If a
hearing is requested or ordered, the commissioner, after notice of the
hearing has been given to all interested persons and the hearing has
been held, may modify or vacate the order or extend it until final
determination.
(f) IC 4-21.5 does not apply to a proceeding under this section.
(g) If a registrant seeks to transfer the registrant's registration to
another licensee who desires to have the registrant engage in
origination activities or serve as a principal manager, whichever
applies, the registrant shall, before the registrant conducts origination
activities or serves as a principal manager for the new employer,
submit to the commissioner, on a form prescribed by the commissioner,
a registration application, as required by section 5 of this chapter.
(h) If the employment of a registrant is terminated, whether:
(1) voluntarily by the registrant; or
(2) by the licensee employing the registrant;
the licensee that employed the registrant shall, not later than five (5)
days after the termination, notify the commissioner of the termination
and the reasons for the termination.
(i) If a material fact or statement included in an application under
this chapter changes after the application has been submitted, the
applicant shall provide written notice to the commissioner of the
change. The commissioner may revoke or refuse to renew the license
or registration of any person who:
(1) is required to submit a written notice under this subsection
and fails to provide the required notice within two (2) business
days after the person discovers or should have discovered the
change; or
(2) would not qualify for licensure or registration under this
chapter as a result of the change in a material fact or statement.
subdivision (2). The commissioner may also bring an action on
behalf of the state to enjoin a person from violating this chapter.
The commissioner shall notify the person that an order or notice
has been issued, the reasons for it, and that a hearing will be set
within fifteen (15) days after the commissioner receives a written
request from the person requesting a hearing.
(5) Sign all orders, official certifications, documents, or papers
issued under this chapter or delegate the authority to sign any of
those items to a deputy.
(6) Hold and conduct hearings.
(7) Hear evidence.
(8) Conduct inquiries with or without hearings.
(9) Receive reports of investigators or other officers or employees
of the state of Indiana or of any municipal corporation or
governmental subdivision within the state.
(10) Administer oaths, or cause them to be administered.
(11) Subpoena witnesses, and compel them to attend and testify.
(12) Compel the production of books, records, and other
documents.
(13) Order depositions to be taken of any witness residing within
or without the state. The depositions shall be taken in the manner
prescribed by law for depositions in civil actions and made
returnable to the commissioner.
(14) Order that each witness appearing under the commissioner's
order to testify before the commissioner shall receive the fees and
mileage allowances provided for witnesses in civil cases.
(15) Provide interpretive opinions or issue determinations that the
commissioner will not institute a proceeding or an action under
this chapter against a specified person for engaging in a specified
act, practice, or course of business if the determination is
consistent with this chapter. The commissioner may adopt rules
to establish fees for individuals requesting an interpretive opinion
or a determination under this subdivision. A person may not
request an interpretive opinion or a determination concerning an
activity that:
(A) occurred before; or
(B) is occurring on;
the date the opinion or determination is requested.
(16) Subject to subsection (f), designate a multistate
automated licensing system and repository, established and
operated by a third party, to serve as the sole entity
responsible for:
(A) processing applications for:
(i) licenses and certificates of registration under this
chapter; and
(ii) renewals of licenses and certificates of registration
under this chapter; and
(B) performing other services that the commissioner
determines are necessary for the orderly administration of
the division's licensing and registration system.
A multistate automated licensing system and repository
described in this subdivision may include the National
Mortgage Licensing System established by the Conference of
State Bank Supervisors and the American Association of
Residential Mortgage Regulators. The commissioner may take
any action necessary to allow the division to participate in a
multistate automated licensing system and repository.
(b) If a witness, in any hearing, inquiry, or investigation conducted
under this chapter, refuses to answer any question or produce any item,
the commissioner may file a written petition with the circuit or superior
court in the county where the hearing, investigation, or inquiry in
question is being conducted requesting a hearing on the refusal. The
court shall hold a hearing to determine if the witness may refuse to
answer the question or produce the item. If the court determines that
the witness, based upon the witness's privilege against
self-incrimination, may properly refuse to answer or produce an item,
the commissioner may make a written request that the court grant use
immunity to the witness. Upon written request of the commissioner, the
court shall grant use immunity to a witness. The court shall instruct the
witness, by written order or in open court, that:
(1) any evidence the witness gives, or evidence derived from that
evidence, may not be used in any criminal proceedings against
that witness, unless the evidence is volunteered by the witness or
is not responsive to a question; and
(2) the witness must answer the questions asked and produce the
items requested.
A grant of use immunity does not prohibit evidence that the witness
gives in a hearing, investigation, or inquiry from being used in a
prosecution for perjury under IC 35-44-2-1. If a witness refuses to give
the evidence after the witness has been granted use immunity, the court
may find the witness in contempt.
(c) In any prosecution, action, suit, or proceeding based upon or
arising out of this chapter, the commissioner may sign a certificate
showing compliance or noncompliance with this chapter by any person.
This shall constitute prima facie evidence of compliance or
noncompliance with this chapter and shall be admissible in evidence
in any action at law or in equity to enforce this chapter.
(d) If:
(1) a person disobeys any lawful:
(A) subpoena issued under this chapter; or
(B) order or demand requiring the production of any books,
accounts, papers, records, documents, or other evidence or
information as provided in this chapter; or
(2) a witness refuses to:
(A) appear when subpoenaed;
(B) testify to any matter about which the witness may be
lawfully interrogated; or
(C) take or subscribe to any oath required by this chapter;
the circuit or superior court of the county in which the hearing, inquiry,
or investigation in question is held, if demand is made or if, upon
written petition, the production is ordered to be made, or the
commissioner or a hearing officer appointed by the commissioner, shall
compel compliance with the lawful requirements of the subpoena,
order, or demand, compel the production of the necessary or required
books, papers, records, documents, and other evidence and
information, and compel any witness to attend in any Indiana county
and to testify to any matter about which the witness may lawfully be
interrogated, and to take or subscribe to any oath required.
(e) If a person fails, refuses, or neglects to comply with a court order
under this section, the person shall be punished for contempt of court.
(f) The commissioner's authority to designate a multistate
automated licensing system and repository under subsection
(a)(16) is subject to the following:
(1) The commissioner may not require any person exempt
from licensure or registration under this chapter, or any
employee or agent of an exempt person, to:
(A) submit information to; or
(B) participate in;
the multistate automated licensing system and repository.
(2) The commissioner may require a person required under
this chapter to submit information to the multistate
automated licensing system and repository to pay a processing
fee considered reasonable by the commissioner.
periodical;
(B) scripts of any recording, radio, or television
announcement; and
(C) any sales kits or literature;
to be used in solicitation of borrowers.
(b) The records listed in subsection (a) shall be kept for a period of
two (2) years in the licensee's loan broker's principal office and must
be separate or readily identifiable from the records of any other
business that is conducted in the office of the loan broker.
(c) If a breach of the security of any records:
(1) maintained by a loan broker under this section; and
(2) containing the unencrypted, unredacted personal
information of one (1) or more borrowers or prospective
borrowers;
occurs, the loan broker is subject to the disclosure requirements
under IC 24-4.9-3, unless the loan broker is exempt from the
disclosure requirements under IC 24-4.9-3-4.
(d) A person who is:
(1) licensed or required to be licensed under this chapter; or
(2) registered or required to be registered under this chapter;
may not dispose of the unencrypted, unredacted personal
information of one (1) or more borrowers or prospective
borrowers without first shredding, incinerating, mutilating,
erasing, or otherwise rendering the information illegible or
unusable.
authority.
(8) Subject to subsection (e), and except as provided in subsection
(f), any person authorized to:
(A) sell and service a loan for the Federal National Mortgage
Association or the Federal Home Loan Mortgage Association;
(B) issue securities backed by the Government National
Mortgage Association;
(C) make loans insured by the United States Department of
Housing and Urban Development or the United States
Department of Agriculture Rural Housing Service;
(D) act as a supervised lender or nonsupervised automatic
lender of the United States Department of Veterans Affairs; or
(E) act as a correspondent of loans insured by the United
States Department of Housing and Urban Development, if the
person closes at least twenty-five (25) such insured loans in
Indiana during each calendar year.
(9) Any person who is a creditor, or proposed to be a creditor, for
any loan.
(b) As used in this chapter, "bona fide third party fee" includes fees
for the following:
(1) Credit reports, investigations, and appraisals performed by a
person who holds a license or certificate as a real estate appraiser
under IC 25-34.1-8.
(2) If the loan is to be secured by real property, title examinations,
an abstract of title, title insurance, a property survey, and similar
purposes.
(3) The services provided by a loan broker in procuring possible
business for a lending institution if the fees are paid by the
lending institution.
(c) As used in this section, "successful procurement of a loan"
means that a binding commitment from a creditor to advance money
has been received and accepted by the borrower.
(d) The burden of proof of any exemption or classification provided
in this chapter is on the party claiming the exemption or classification.
(e) A person claiming an exemption under subsection (a)(8) shall,
as a condition to receiving or maintaining the exemption, file a notice
every twenty-four (24) months on a form acceptable to the
commissioner. The notice required under this subsection must:
(1) provide the name and business address of each originator
employed by the person to originate loans in Indiana;
(2) include all other information required by the commissioner;
and
(3) be accompanied by a fee of four hundred dollars ($400),
If any information included in a notice under this subsection changes
after the notice has been submitted, the person shall provide written
notice to the commissioner of the change. The commissioner's receipt
of a notice under this subsection shall not be considered to be a
determination or confirmation by the commissioner of the validity of
the claimed exemption.
(f) An exemption described in subsection (a)(8) does not extend to:
(1) a subsidiary of the exempt person; or
release or disclosure of the unencrypted, unredacted personal
information of one (1) or more borrowers or prospective
borrowers. An activity described in this subdivision includes
an action prohibited by section 18(d) of this chapter.
(b) A person who commits an act described in subsection (a) is
subject to sections 10, 14, 15, and 16 of this chapter.
shall in its mandate specifically direct the commissioner as to the
commissioner's further action in the matter. The commissioner is not
barred from revoking or altering the order for any proper cause that
accrues or is discovered after the order is entered. If the order is
affirmed, the appellant is not barred after thirty (30) days from the date
the order is affirmed from filing a new application if the application is
not otherwise barred or limited. During the pendency of the appeal, the
order from which the appeal is taken is not suspended but remains in
effect unless otherwise ordered by the court. An appeal may be taken
from the judgment of the court on the same terms and conditions as an
appeal is taken in civil actions.
transaction is entered into; and
(b) the laws of the debtor's state of residence requires that the
transaction be made under the laws of the state of the debtor's
residence.
Sec. 202. This article does not apply to the following:
(1) Extensions of credit to government or governmental
agencies or instrumentalities.
(2) A first lien mortgage transaction in which the debt is
incurred primarily for a purpose other than a personal,
family, or household purpose.
(3) An extension of credit primarily for a business, a
commercial, or an agricultural purpose.
(4) A first lien mortgage transaction made:
(a) in compliance with the requirements of; and
(b) by a community development corporation (as defined
in IC 4-4-28-2) acting as a subrecipient of funds from;
the Indiana housing and community development authority
established by IC 5-20-1-3.
(5) A supervised financial organization.
(6) An operating subsidiary that is majority owned, directly
or indirectly, by a supervised financial organization to the
extent the operating subsidiary is regulated by the chartering
authority of the supervised financial organization.
(7) A credit union service organization that is majority owned,
directly or indirectly, by one (1) or more credit unions.
(8) Agencies, instrumentalities, and government owned
corporations of the United States, including United States
government sponsored enterprises.
Sec. 203. Any civil court in Indiana may exercise jurisdiction
over any creditor with respect to any conduct in Indiana governed
by this article or with respect to any claim arising from a
transaction subject to this article. In addition to any other method
provided by rule or by statute, personal jurisdiction over a creditor
may be acquired in a civil action or proceeding instituted in any
civil court by the service of process.
Sec. 301. In addition to definitions appearing in subsequent
chapters of this article, the following definitions apply throughout
this article:
(1) "Credit" means the right granted by a creditor to a debtor
to defer payment of debt or to incur debt and defer its
payment.
(2) "Creditor" means a person:
(a) that regularly engages in the extension of first lien
mortgage transactions that are subject to a credit service
charge or loan finance charge, as applicable, or are
payable by written agreement in more than four (4)
installments (not including a down payment); and
(b) to which the obligation is initially payable, either on the
face of the note or contract, or by agreement if there is not
a note or contract.
The term does not include a person described in subsection
(13)(a) in a tablefunded transaction.
(3) "Department" refers to the members of the department of
financial institutions.
(4) "Director" refers to the director of the department of
financial institutions.
(5) "Dwelling" means a residential structure that contains one
(1) to four (4) units, regardless of whether the structure is
attached to real property. The term includes an individual:
(a) condominium unit;
(b) cooperative unit;
(c) mobile home; or
(d) trailer;
that is used as a residence.
(6) "First lien mortgage transaction" means a loan in which
a first mortgage, or a land contract which constitutes a first
lien, is created or retained against land upon which there is a
dwelling that is or will be used by the debtor primarily for
personal, family, or household purposes.
(7) "Loan" includes:
(a) the creation of debt by:
(i) the creditor's payment of or agreement to pay money
to the debtor or to a third party for the account of the
debtor; or
(ii) the extension of credit by a person who regularly
engages as a seller in credit transactions primarily
secured by an interest in land;
(b) the creation of debt by a credit to an account with the
creditor upon which the debtor is entitled to draw
immediately; and
(c) the forbearance of debt arising from a loan.
(8) "Payable in installments", with respect to a debt or an
obligation, means that payment is required or permitted by
written agreement to be made in more than four (4)
installments not including a down payment.
(9) "Person" includes an individual or an organization.
(10) A person is "regularly engaged"as a creditor in first lien
mortgage transactions in Indiana if:
(a) the person acted as a creditor in first lien mortgage
transactions in Indiana more than five (5) times in the
preceding calendar year; or
(b) the person did not meet the numerical standards set
forth in subdivision (a) in the preceding calendar year, but
has or will meet the numerical standards set forth in
subdivision (a) in the current calendar year.
(11) "Revolving first lien mortgage transaction" means an
arrangement between a creditor and a debtor in which:
(a) the creditor permits the debtor to obtain advances from
time to time;
(b) the unpaid balances of principal, credit service charges
or loan finance charges, and other appropriate charges are
debited to an account; and
a proposed short sale from a third party acting on behalf of the
debtor only if the debtor has provided written authorization for the
creditor, servicer, or creditor's agent to do so. Not later than thirty
(30) business days after receipt of an offer under this subsection,
the creditor, servicer, or creditor's agent shall respond to the offer
with an acceptance or a rejection of the offer. As used in this
subsection, "short sale" means a transaction in which the property
that is the subject of a first lien mortgage transaction is sold for an
amount that is less than the amount of the debtor's outstanding
obligation under the first lien mortgage transaction. A creditor or
mortgage servicer that fails to respond to an offer within the time
prescribed by this subsection is liable in accordance with 12 U.S.C.
2605(f) in any action brought under that section.
Sec. 301. (1) A violation of a state or federal law, regulation, or
rule applicable to first lien mortgage transactions is a violation of
this article.
(2) The department may enforce penalty provisions set forth in
15 U.S.C. 1640 for violations of disclosure requirements applicable
to first lien mortgage transactions.
Sec. 401. Unless a person subject to this article has first obtained
a license from the department, the person shall not regularly
engage in Indiana as a creditor in first lien mortgage transactions.
However, this article does not require an employee of a person that
is licensed under this article to obtain a license to make a first lien
mortgage loan.
Sec. 402. (1) The department shall receive and act on all
applications for licenses to engage in first lien mortgage
transactions. Applications must be made as prescribed by the
director.
(2) A license may not be issued unless the department finds that
the financial responsibility, character, and fitness of:
(a) the applicant and
any significant affiliate of the applicant;
(b) each executive officer, director, or manager of the
applicant, or any other individual having a similar status or
performing a similar function for the applicant; and
(c) if known, each person directly or indirectly owning of
record or owning beneficially at least ten percent (10%) of the
outstanding shares of any class of equity security of the
applicant;
are such as to warrant belief that the business will be operated
honestly and fairly within the purposes of this article.
(3) The director is entitled to request evidence of compliance
with this section at:
(a) the time of application;
(b) the time of renewal of a license; or
(c) any other time considered necessary by the director.
(4) Evidence of compliance with this section may include:
(a) criminal background checks, including a national criminal
history background check (as defined in IC 10-13-3-12) by the
Federal Bureau of Investigation, for any individual described
in subsection (2);
(b) credit histories; and
(c) other background checks considered necessary by the
director.
If the director requests a national criminal history background
check under subdivision (a) for an individual described in
subsection (2), the director shall require the individual to submit
fingerprints to the department or to the state police department, as
appropriate, at the time evidence of compliance is requested under
subsection (3). The individual to whom the request is made shall
pay any fees or costs associated with the fingerprints and the
national criminal history background check. The national criminal
history background check may be used by the director to
determine the individual's compliance with this section. The
director or the department may not release the results of the
national criminal history background check to any private entity.
(5) The department may deny an application under this section
if the director of the department determines that the application
was submitted for the benefit of, or on behalf of, a person who does
not qualify for a license.
(6) Upon written request, the applicant is entitled to a hearing
on the question of the qualifications of the applicant for a license
in the manner provided in IC 4-21.5.
(7) The applicant shall pay the following fees at the time
designated by the department:
(a) An initial license fee as established by the department
under IC 28-11-3-5.
(b) An annual renewal fee as established by the department
under IC 28-11-3-5.
(c) Examination fees as established by the department under
IC 28-11-3-5.
(8) A fee as established by the department under IC 28-11-3-5
may be charged for each day the annual renewal fee under
subsection (7)(b) is delinquent.
(9) A license issued under this section is not assignable or
transferable.
(10) Subject to subsection (11), the director may designate an
automated central licensing system and repository, operated by a
third party, to serve as the sole entity responsible for:
(a) processing applications and renewals for licenses under
this section; and
(b) performing other services that the director determines are
necessary for the orderly administration of the department's
licensing system under this article.
(11) The director's authority to designate an automated central
licensing system and repository under subsection (10) is subject to
the following:
(a) The director or the director's designee may not require
any person exempt from licensure under this article, or any
employee or agent of an exempt person, to:
(i) submit information to; or
(ii) participate in;
the automated central licensing system and repository.
(b) Information stored in the automated central licensing
system and repository is subject to the confidentiality
provisions of IC 28-1-2-30 and IC 5-14-3. A person may not:
(i) obtain information from the automated central licensing
system and repository, unless the person is authorized to
do so by statute;
(ii) initiate any civil action based on information obtained
from the automated central licensing system if the
information is not otherwise available to the person under
any other state law; or
(iii) initiate any civil action based on information obtained
from the automated central licensing system if the person
could not have initiated the action based on information
otherwise available to the person under any other state
law.
(c) Documents, materials, and other forms of information in
the control or possession of the automated central licensing
system and repository that are confidential under
IC 28-1-2-30 and that are:
(i) furnished by the director, the director's designee, or a
licensee; or
(ii) otherwise obtained by the automated central licensing
system and repository;
are confidential and privileged by law and are not subject to
inspection under IC 5-14-3, subject to subpoena, subject to
discovery, or admissible in evidence in any civil action.
However, the director or the director's designee may use the
documents, materials, or other information available to the
director or the director's designee in furtherance of any
action brought in connection with the director's duties under
this article.
(d) Disclosure of documents, materials, and information:
(i) to the director or the director's designee; or
(ii) by the director or the director's designee;
under this subsection does not result in a waiver of any
applicable privilege or claim of confidentiality with respect to
the documents, materials, or information.
(e) Information provided to the automated central licensing
system and repository is subject to IC 4-1-11.
(f) This subsection does not limit or impair a person's right to:
(i) obtain information;
(ii) use information as evidence in a civil action or
proceeding; or
(iii) use information to initiate a civil action or proceeding;
if the information may be obtained from the director or the
director's designee under any law.
(g) The director may require a licensee required to submit
information to the automated central licensing system and
repository to pay a processing fee considered reasonable by
the director.
Sec. 403. (1) A license issued by the department authorizing a
person to engage in first lien mortgage transactions under this
article may be revoked by the department if the person fails to:
(a) file any renewal form required by the department; or
(b) pay any license renewal fee described under section 402 of
this chapter;
not later than sixty (60) days after the due date.
(2) A person whose license is revoked under this section may do
either of the following:
(a) Pay all delinquent fees and apply for a new license.
(b) Appeal the revocation to the department for an
administrative review under IC 4-21.5-3. Pending the decision
resulting from the hearing under IC 4-21.5-3 concerning the
license revocation, the license remains in force.
Sec. 404. (1) The department may issue to a person licensed to
engage in first lien mortgage transactions an order to show cause
why the person's license should not be revoked or suspended for a
period determined by the department. The order must state the
place and time for a meeting with the department that is not less
than ten (10) days from the date of the order. After the meeting,
the department shall revoke or suspend the license if the
department finds that:
(a) the licensee has repeatedly and willfully violated:
(i) this article or any rule or order lawfully adopted or
issued under this article; or
(ii) any other state or federal law, regulation, or rule
applicable to first lien mortgage transactions; or
(b) facts or conditions exist which would clearly have justified
the department in refusing to grant a license had the facts or
conditions been known to exist at the time the application for
the license was made.
(2) Except as provided in section 403 of this chapter, a
revocation or suspension of a license is not authorized under this
article unless before instituting proceedings to suspend or revoke
the license, the department gives notice to the licensee of the
conduct or facts that warrant the intended action, and the licensee
is given an opportunity to show compliance with all lawful
requirements for retention of the license.
(3) If the department finds that probable cause for revocation
of a license exists and that enforcement of this article requires
immediate suspension of the license pending investigation, the
department may, after a hearing with the licensee upon five (5)
days written notice to the licensee, enter an order suspending the
license for not more than thirty (30) days.
(4) Whenever the department revokes or suspends a license, the
department shall enter an order to that effect and notify the
licensee of the revocation or suspension. Not later than five (5) days
after the entry of the order the department shall deliver to the
licensee a copy of the order and the findings supporting the order.
(5) Any person holding a license to engage in first lien mortgage
transactions may relinquish the license by notifying the
department in writing of the relinquishment. However, a
relinquishment under this paragraph does not affect the person's
liability for acts previously committed and coming within the scope
of this article.
(6) A revocation, suspension, or relinquishment of a license does
not impair or affect the obligation of any preexisting lawful
contract between:
(a) the person whose license has been revoked, suspended, or
relinquished; and
(b) any debtor.
(7) The department may reinstate a license, terminate a
suspension, or grant a new license to a person whose license has
been revoked or suspended if the director determines that, at the
time the determination is made, there is no fact or condition that
exists that clearly would justify the department in refusing to grant
a license.
(8) If the director:
(a) has just cause to believe an emergency exists from which
it is necessary to protect the interests of the public; or
(b) determines that a license was obtained for the benefit of,
or on behalf of, a person who does not qualify for a license;
the director may proceed with the revocation of the license under
IC 4-21.5-3-6.
Sec. 405. (1) Every licensee shall maintain records in a manner
that will enable the department to determine whether the licensee
is complying with this article. The record keeping system of a
licensee is sufficient if the licensee makes the required information
reasonably available. The department shall determine the
sufficiency of the records and whether the licensee has made the
required information reasonably available. The department shall
be given free access to the records wherever the records are
located. Records concerning any first lien mortgage transaction
shall be retained for two (2) years after the making of the final
entry relating to the transaction, but in the case of a revolving first
lien mortgage transaction, the two (2) years required under this
subsection is measured from the date of each entry relating to the
transaction.
(2) A licensee shall file with the department financial statements
relating to all first lien mortgage transactions originated by the
licensee. The licensee shall file the financial statements as required
by the department, but not more frequently than annually, in the
form prescribed by the department.
(3) A licensee shall file notification with the department if the
licensee:
(a) has a change in name, address, or any of its principals;
(b) opens a new branch, closes an existing branch, or relocates
an existing branch;
(c) files for bankruptcy or reorganization; or
(d) is subject to revocation or suspension proceedings by a
state or governmental authority with regard to the licensee's
activities;
not later than thirty (30) days after the date of the event described
in this subsection.
(4) A licensee shall file notification with the department if a key
officer or director of the licensee:
(a) is under indictment for a felony involving fraud, deceit, or
misrepresentation under the laws of Indiana or any other
jurisdiction; or
(b) has been convicted of or pleaded guilty or nolo contendere
to a felony involving fraud, deceit, or misrepresentation under
the laws of Indiana or any other jurisdiction;
not later than thirty (30) days after the date of the event described
in this subsection.
Sec. 501. A creditor in a first lien mortgage transaction shall
comply with IC 6-1.1-12-43, to the extent applicable.
Sec. 502. (1) A violation by a creditor in a first lien mortgage
transaction of Section 125 of the Federal Consumer Credit
Protection Act (15 U.S.C. 1635) (concerning a debtor's right to
rescind a transaction) constitutes a violation of this article. A
creditor may not accrue interest during the period when a first lien
mortgage transaction may be rescinded under Section 125 of the
Federal Consumer Protection Act (15 U.S.C. 1635).
(2) A creditor must make available for disbursement the
proceeds of a transaction subject to subsection (1) on the later of:
(a) the date the creditor is reasonably satisfied that the debtor
has not rescinded the transaction; or
(b) the first business day after the expiration of the rescission
period under subsection (1).
Chapter 3. Administration
Sec. 101. This chapter shall be known and may be cited as the
First Lien Mortgage Lending Act - Administration.
Sec. 102. This chapter applies to a person that regularly engages
as a creditor in first lien mortgage transactions in Indiana.
Sec. 103. (1) In addition to other powers granted by this article,
the department within the limitations provided by law may:
(a) receive and act on complaints, take action designed to
obtain voluntary compliance with this article, or commence
proceedings on the department's own initiative;
(b) counsel persons and groups on their rights and duties
under this article;
(c) establish programs for the education of consumers with
respect to credit practices and problems;
(d) make studies appropriate to effectuate the purposes and
policies of this article and make the results available to the
public;
(e) adopt, amend, and repeal rules, orders, policies, and forms
to carry out the provisions of this article;
(f) maintain more than one (1) office within Indiana; and
(g) appoint any necessary attorneys, hearing examiners,
clerks, and other employees and agents and fix their
compensation, and authorize attorneys appointed under this
section to appear for and represent the department in court.
(2) Liability may not be imposed under this article for an act
done or omitted in conformity with a rule, written notice, written
opinion, written interpretation, or written directive of the
department notwithstanding the fact that after the act is done or
omitted the rule, written notice, written opinion, written
interpretation, or written directive may be:
(a) amended or repealed; or
(b) determined by judicial or other authority to be invalid;
for any reason.
Sec. 104. (1) In administering this article and in order to
determine whether the provisions of this article are being complied
with by persons engaging in acts subject to this article, the
department may examine the records of persons and may make
investigations of persons as may be necessary to determine
compliance. Records subject to examination under this section
include the following:
(a) Training, operating, and policy manuals.
(b) Minutes of:
(i) management meetings; and
(ii) other meetings.
(c) Financial records, credit files, and data bases.
(d) Other records that the department determines are
necessary to perform its investigation or examination.
The department may also administer oaths or affirmations,
subpoena witnesses, compel the attendance of witnesses, adduce
evidence, and require the production of any matter that is relevant
to an investigation. The department shall determine the sufficiency
of the records maintained and whether the person has made the
required information reasonably available. The records concerning
any transaction subject to this article shall be retained for two (2)
years after the making of the final entry relating to the first lien
mortgage transaction, but in the case of a revolving first lien
mortgage transaction the two (2) year period is measured from the
date of each entry.
(2) The department's examination and investigatory authority
under this article includes the following:
(a) The authority to require a creditor to refund overcharges
resulting from the creditor's noncompliance with the terms of
a first lien mortgage transaction.
(b) The authority to require a creditor to comply with the
penalty provisions set forth in IC 24-4.4-2-201.
(c) The authority to investigate complaints filed with the
department by debtors.
(3) The department shall be given free access to the records
wherever the records are located. If the person's records are
located outside Indiana, the records shall be made available to the
department at a convenient location within Indiana, or the person
shall pay the reasonable and necessary expenses for the
department or the department's representative to examine the
records where they are maintained. The department may designate
comparable officials of the state in which the records are located
to inspect the records on behalf of the department.
(4) Upon a person's failure without lawful excuse to obey a
subpoena or to give testimony and upon reasonable notice by the
department to all affected persons, the department may apply to
any civil court with jurisdiction for an order compelling
compliance.
(5) The department shall not make public:
(a) the name or identity of a person whose acts or conduct the
department investigates under this section; or
(b) the facts discovered in the investigation.
However, this subsection does not apply to civil actions or
enforcement proceedings under this article.
Sec. 105. Except as otherwise provided, IC 4-21.5-3 governs any
action taken by the department under this chapter or
IC 24-4.4-2-401 through IC 24-4.4-2-405. IC 4-22-2 applies to the
adoption of rules by the department under this article. However,
if the department determines that an emergency exists, the
department may adopt any rules authorized by this article under
IC 4-22-2-37.1.
Sec. 106. (1) After notice and hearing, the department may
order a creditor or a person acting on the creditor's behalf to cease
and desist from engaging in violations of this article. In any civil
court with jurisdiction:
(a) a respondent aggrieved by an order of the department
may obtain judicial review of the order; and
(b) the department may obtain an order of the court for the
enforcement of the department's order.
A proceeding for review or enforcement under this subsection shall
be initiated by the filing of a petition in the court. Copies of the
petition shall be served upon all parties of record.
(2) Not later than thirty (30) days after service of a petition for
review upon the department under subsection (1), or within such
further time as the court may allow, the department shall transmit
to the court the original or a certified copy of the entire record
upon which the order that is the subject of the review is based,
including any transcript of testimony, which need not be printed.
By stipulation of all parties to the review proceeding, the record
may be shortened. After conducting a hearing on the matter, the
court may:
(a) reverse or modify the order if the findings of fact of the
department are clearly erroneous in view of the reliable,
probative, and substantial evidence in the whole record;
(b) grant any temporary relief or restraining order the court
considers just; and
(c) enter an order:
(i) enforcing;
(ii) modifying;
(iii) enforcing as modified; or
(iv) setting aside;
in whole or in part, the order of the department; or
(d) enter an order remanding the case to the department for
further proceedings.
(3) An objection not urged at the hearing shall not be considered
by the court unless the failure to urge the objection is excused for
good cause shown. A party may move the court to remand the case
to the department in the interest of justice for the purpose of:
(a) adducing additional specified and material evidence; and
(b) seeking a finding upon such evidence;
upon good cause shown for the failure to previously adduce this
evidence before the department.
(4) The jurisdiction of the court is exclusive and the court's final
judgment or decree is subject to review on appeal in the same
manner and form and with the same effect as in appeals from a
final judgment or decree. The department's copy of the testimony
shall be available at reasonable times to all parties for examination
without cost.
(5) A proceeding for review under this section must be initiated
not later than thirty (30) days after a copy of the order of the
department is received. If a proceeding is not initiated within the
time set forth in this subsection, the department may obtain a
decree of a civil court with jurisdiction for enforcement of the
department's order upon a showing that:
(a) the order was issued in compliance with this section;
(b) a proceeding for review was not initiated within the thirty
(30) day period prescribed by this subsection; and
(c) the respondent is subject to the jurisdiction of the court.
(6) With respect to unconscionable agreements or fraudulent or
unconscionable conduct by a respondent, the department may not
issue an order under this section but may bring a civil action for an
injunction under section 111 of this chapter.
Sec. 107. If it is claimed that a person has engaged in conduct
subject to an order by:
(a) the department under section 106(1) of this chapter; or
(b) a court under sections 108 through 110 of this chapter;
the department may accept an assurance in writing that the person
will not engage in the conduct in the future. If a person giving an
assurance of discontinuance fails to comply with the terms of the
assurance, the assurance is evidence that before the assurance was
issued the person engaged in the conduct described in the
assurance.
Sec. 108. The department may bring a civil action to restrain a
person from violating this article and for other appropriate relief.
Sec. 109. (1) As used in this section, "deceptive act" means an
act or a practice in which a person knowingly or intentionally:
(a) makes a material misrepresentation concerning; or
(b) conceals material information regarding the terms or
conditions of;
a first lien mortgage transaction.
(2) For purposes of this section, "knowingly" means having
actual knowledge at the time of the transaction.
(3) The department may bring a civil action to enjoin a
deceptive act performed in connection with a first lien mortgage
transaction.
Sec. 110. With respect to an action brought under:
(a) section 108 of this chapter to enjoin violations of this
article; or
(b) section 109 of this chapter to enjoin deceptive acts;
the department may apply to the court for appropriate temporary
relief against a respondent, pending final determination of the
proceedings. If the court finds after a hearing held upon notice to
the respondent that there is reasonable cause to believe that the
respondent is engaging in or is likely to engage in the conduct
sought to be restrained, the court may grant any temporary relief
or restraining order the court considers appropriate.
Sec. 111. (1) The department may bring a civil action against a
creditor or a person acting on the creditor's behalf to recover a
civil penalty for willfully violating this article. If the court finds
that the defendant has engaged in a course of repeated and willful
violations of this article, the court may assess a civil penalty of not
more than five thousand dollars ($5,000). A civil penalty may not
be imposed under this subsection:
(a) for violations of this article occurring more than two (2)
years before the action is brought; or
(b) for making unconscionable agreements or engaging in a
course of fraudulent or unconscionable conduct.
(2) If the department determines, after notice and opportunity
for hearing, that a person has violated this article, the department
may, in addition to or instead of all other remedies available under
this section, impose upon the person a civil penalty not greater
than ten thousand dollars ($10,000) per violation.
Sec. 112. In an action brought by the department under this
article, the defendant does not have a right to trial by a jury.
Sec. 113. The grant of powers to the department under this
article does not affect remedies available to debtors under this
article or under other principles of law or equity.
Sec. 114. The department may bring an action or a proceeding
in a court in a county:
(1) in which an act on which the action or proceeding is based
occurred;
(2) in which the respondent resides or transacts business; or
(3) in which the action or proceeding is otherwise authorized
by rule or venue laws.
Sec. 115. As used in this article, "civil court" means any court
in Indiana having jurisdiction of civil cases.
or manufacture of agricultural products by a natural person who
cultivates, plants, propagates, or nurtures the agricultural products;
"Agricultural products" includes agricultural, horticultural, viticultural,
and dairy products, livestock, wildlife, poultry, bees, forest products,
fish and shellfish, and any and all products raised or produced on farms
and any processed or manufactured products thereof.
(3) "Average daily balance" means the sum of each of the daily
balances in a billing cycle divided by the number of days in the billing
cycle, and if the billing cycle is a month, the creditor may elect to treat
the number of days in each billing cycle as thirty (30).
(4) "Closing costs" with respect to a debt secured by an interest in
land includes:
(a) fees or premiums for title examination, title insurance, or
similar purposes, including surveys;
(b) fees for preparation of a deed, settlement statement, or other
documents;
(c) escrows for future payments of taxes and insurance;
(d) fees for notarizing deeds and other documents;
(e) appraisal fees; and
(f) credit reports.
(5) "Conspicuous": A term or clause is conspicuous when it is so
written that a reasonable person against whom it is to operate ought to
have noticed it.
(6) "Consumer credit" means credit offered or extended to a
consumer primarily for a personal, family, or household purpose.
(7) "Credit" means the right granted by a creditor to a debtor to
defer payment of debt or to incur debt and defer its payment.
(8) "Creditor" means a person:
(a) who regularly engages in the extension of consumer credit that
is subject to a credit service charge or loan finance charge, as
applicable, or is payable by written agreement in more than
four (4) installments (not including a down payment); and
(b) to whom the obligation is initially payable, either on the face
of the note or contract, or by agreement when there is not a note
or contract.
(9) "Earnings" means compensation paid or payable for personal
services, whether denominated as wages, salary, commission, bonus,
or otherwise, and includes periodic payments under a pension or
retirement program.
(10) "Lender credit card or similar arrangement" means an
arrangement or loan agreement, other than a seller credit card, pursuant
to which a lender gives a debtor the privilege of using a credit card,
letter of credit, or other credit confirmation or identification in
transactions out of which debt arises:
(a) by the lender's honoring a draft or similar order for the
payment of money drawn or accepted by the debtor;
(b) by the lender's payment or agreement to pay the debtor's
obligations; or
(c) by the lender's purchase from the obligee of the debtor's
obligations.
(11) "Official fees" means:
other credit confirmation or identification for the purpose of purchasing
or leasing goods or services from that person, a person related to that
person, or from that person and any other person. The term includes a
card that is issued by a person, that is in the name of the seller, and that
can be used by the buyer or lessee only for purchases or leases at
locations of the named seller.
(20) "Supervised financial organization" means a person, other than
an insurance company or other organization primarily engaged in an
insurance business:
(a) organized, chartered, or holding an authorization certificate
under the laws of a state or of the United States which authorizes
the person to make loans and to receive deposits, including a
savings, share, certificate, or deposit account; and
(b) subject to supervision by an official or agency of a state or of
the United States.
(21) "Mortgage servicer" means the last person to whom a
mortgagor or the mortgagor's successor in interest has been instructed
by a mortgagee to send payments on a loan secured by a mortgage.
(22) "Affiliate", with respect to any person subject to this article,
means a person that, directly or indirectly, through one (1) or more
intermediaries:
(a) controls;
(b) is controlled by; or
(c) is under common control with;
the person subject to this article.
balances of the amount financed which is more than one
thousand dollars ($1,000); or
(b) twenty-one percent (21%) per year on the unpaid balances of
the amount financed.
(3) This section does not limit or restrict the manner of contracting
for the credit service charge, whether by way of add-on, discount, or
otherwise, so long as the rate of the credit service charge does not
exceed that permitted by this section. If the sale is precomputed:
(a) the credit service charge may be calculated on the assumption
that all scheduled payments will be made when due; and
(b) the effect of prepayment is governed by the provisions on
rebate upon prepayment (IC 24-4.5-2-210).
(4) For the purposes of this section, the term of a sale agreement
commences with the date the credit is granted or, if goods are delivered
or services performed more than thirty (30) days after that date, with
the date of commencement of delivery or performance except as set
forth below:
(a) Delays attributable to the customer. Where the customer
requests delivery after the thirty (30) day period or where delivery
occurs after the thirty (30) day period for a reason attributable to
the customer (including but not limited to failure to close on a
residence or failure to obtain lease approval), the term of the sale
agreement shall commence with the date credit is granted.
(b) Partial Deliveries. Where any portion of the order has been
delivered within the thirty (30) day period, the term of the sale
agreement shall commence with the date credit is granted.
Differences in the lengths of months are disregarded and a day may be
counted as one-thirtieth (1/30) of a month. Subject to classifications
and differentiations the seller may reasonably establish, a part of a
month in excess of fifteen (15) days may be treated as a full month if
periods of fifteen (15) days or less are disregarded and that procedure
is not consistently used to obtain a greater yield than would otherwise
be permitted.
(5) Subject to classifications and differentiations the seller may
reasonably establish, the seller may make the same credit service
charge on all amounts financed within a specified range. A credit
service charge so made does not violate subsection (2) if:
(a) when applied to the median amount within each range, it does
not exceed the maximum permitted by subsection (2); and
(b) when applied to the lowest amount within each range, it does
not produce a rate of credit service charge exceeding the rate
calculated according to paragraph (a) by more than eight percent
(8%) of the rate calculated according to paragraph (a).
(6) Notwithstanding subsection (2), the seller may contract for and
receive a minimum credit service charge of not more than thirty dollars
($30). The minimum credit service charge allowed under this
subsection may be imposed only if:
(a) the borrower debtor prepays in full a consumer credit sale,
refinancing, or consolidation, regardless of whether the sale,
refinancing, or consolidation is precomputed;
(b) the sale, refinancing, or consolidation prepaid by the borrower
debtor is subject to a credit service charge that:
(i) is contracted for by the parties; and
(ii) does not exceed the rate prescribed in subsection (2); and
(c) the credit service charge earned at the time of prepayment is
less than the minimum credit service charge contracted for under
this subsection.
(7) The amounts of three hundred dollars ($300) and one thousand
dollars ($1,000) in subsection (2) are subject to change pursuant to the
provisions on adjustment of dollar amounts (IC 24-4.5-1-106).
(8) The amount of thirty dollars ($30) in subsection (6) is subject to
change under the provisions on adjustment of dollar amounts (IC
24-4.5-1-106). However, notwithstanding IC 24-4.5-1-106(1), the
Reference Base Index to be used under this subsection is the Index for
October 1992.
contract that constitutes a lien is created or retained against land
upon which there is a dwelling that is or will be used by the debtor
primarily for personal, family, or household purposes. This
subsection applies to a mortgage transaction with respect to which
any installment or minimum payment due is delinquent for at least
sixty (60) days. The creditor, servicer, or the creditor's agent shall
acknowledge a written offer made in connection with a proposed
short sale not later than ten (10) business days after the date of the
offer if the offer complies with the requirements for a qualified
written request set forth in 12 U.S.C. 2605(e)(1)(B). The creditor,
servicer, or creditor's agent is required to acknowledge a written
offer made in connection with a proposed short sale from a third
party acting on behalf of the debtor only if the debtor has provided
written authorization for the creditor, servicer, or creditor's agent
to do so. Not later than thirty (30) business days after receipt of an
offer under this subsection, the creditor, servicer, or creditor's
agent shall respond to the offer with an acceptance or a rejection
of the offer. As used in this subsection, "short sale" means a
transaction in which the property that is the subject of a mortgage
transaction is sold for an amount that is less than the amount of the
debtor's outstanding obligation under the mortgage transaction. A
creditor or mortgage servicer that fails to respond to an offer
within the time prescribed by this subsection is liable in accordance
with 12 U.S.C. 2605(f) in any action brought under that section.
supervised loan (IC 24-4.5-3-501), a lender may contract for a loan
finance charge, calculated according to the actuarial method, not
exceeding twenty-one percent (21%) per year on the unpaid balances
of the principal.
(2) This section does not limit or restrict the manner of contracting
for the loan finance charge, whether by way of add-on, discount, or
otherwise, so long as the rate of the loan finance charge does not
exceed that permitted by this section. If the loan is precomputed:
(a) the loan finance charge may be calculated on the assumption
that all scheduled payments will be made when due; and
(b) the effect of prepayment is governed by the provisions on
rebate upon prepayment (IC 24-4.5-3-210).
(3) For the purposes of this section, the term of a loan commences
with the date the loan is made. Differences in the lengths of months are
disregarded, and a day may be counted as one-thirtieth (1/30) of a
month. Subject to classifications and differentiations the lender may
reasonably establish, a part of a month in excess of fifteen (15) days
may be treated as a full month if periods of fifteen (15) days or less are
disregarded and if that procedure is not consistently used to obtain a
greater yield than would otherwise be permitted. For purposes of
computing average daily balances, the creditor may elect to treat all
months as consisting of thirty (30) days.
(4) With respect to a consumer loan made pursuant to a revolving
loan account:
(a) the loan finance charge shall be deemed not to exceed the
maximum annual percentage rate if the loan finance charge
contracted for and received does not exceed a charge in each
monthly billing cycle which is one and three-fourths percent (1
3/4%) of an amount no greater than:
(i) the average daily balance of the debt;
(ii) the unpaid balance of the debt on the same day of the
billing cycle; or
(iii) subject to subsection (5), the median amount within a
specified range within which the average daily balance or the
unpaid balance of the debt, on the same day of the billing
cycle, is included; for the purposes of this subparagraph and
subparagraph (ii), a variation of not more than four (4) days
from month to month is "the same day of the billing cycle";
(b) if the billing cycle is not monthly, the loan finance charge
shall be deemed not to exceed the maximum annual percentage
rate if the loan finance charge contracted for and received does
not exceed a percentage which bears the same relation to
one-twelfth (1/12) the maximum annual percentage rate as the
number of days in the billing cycle bears to thirty (30); and
(c) notwithstanding subsection (1), if there is an unpaid balance
on the date as of which the loan finance charge is applied, the
lender may contract for and receive a charge not exceeding fifty
cents ($0.50) if the billing cycle is monthly or longer, or the pro
rata part of fifty cents ($0.50) which bears the same relation to
fifty cents ($0.50) as the number of days in the billing cycle bears
to thirty (30) if the billing cycle is shorter than monthly, but no
charge may be made pursuant to this paragraph if the lender has
made an annual charge for the same period as permitted by the
provisions on additional charges (paragraph (c) of subsection (1)
of IC 24-4.5-3-202).
(5) Subject to classifications and differentiations, the lender may
reasonably establish and make the same loan finance charge on all
amounts financed within a specified range. A loan finance charge does
not violate subsection (1) if:
(a) when applied to the median amount within each range, it does
not exceed the maximum permitted by subsection (1); and
(b) when applied to the lowest amount within each range, it does
not produce a rate of loan finance charge exceeding the rate
calculated according to paragraph (a) by more than eight percent
(8%) of the rate calculated according to paragraph (a).
(6) With respect to a consumer loan not made pursuant to a
revolving loan account, the lender may contract for and receive a
minimum loan finance charge of not more than thirty dollars ($30). The
minimum loan finance charge allowed under this subsection may be
imposed only if:
(a) the borrower debtor prepays in full a consumer loan,
refinancing, or consolidation, regardless of whether the loan,
refinancing, or consolidation is precomputed;
(b) the loan, refinancing, or consolidation prepaid by the borrower
debtor is subject to a loan finance charge that:
(i) is contracted for by the parties; and
(ii) does not exceed the rate prescribed in subsection (1); and
(c) the loan finance charge earned at the time of prepayment is
less than the minimum loan finance charge contracted for under
this subsection.
(7) The amount of thirty dollars ($30) in subsection (6) is subject to
change under the provisions on adjustment of dollar amounts (IC
24-4.5-1-106). However, notwithstanding IC 24-4.5-1-106(1), the
Reference Base Index to be used under this subsection is the Index for
October 1992.
(8) In addition to the loan finance charge provided for in this
section, a lender may contract for the following:
(a) With respect to a consumer loan that is not made under a
revolving loan account, a loan origination fee of not more than
two percent (2%) of the loan amount.
(b) With respect to a consumer loan that is made under a
revolving loan account, a loan origination fee of not more than
two percent (2%) of the line of credit that was contracted for.
(9) The charges provided for in subsection (8):
(a) are not subject to refund or rebate;
(b) are not permitted if a lender makes a settlement charge under
IC 24-4.5-3-202(d)(ii); and
(c) are limited to two percent (2%) of the part of the loan that
does not exceed two thousand dollars ($2,000), if the loan is not
primarily secured by an interest in land.
Notwithstanding subdivision (a), if a lender retains any part of a loan
origination fee charged on a loan that is paid in full by a new loan from
the same lender within three (3) months after the date of the prior loan,
the lender may charge a loan origination fee only on that part of the
new loan not used to pay the amount due on the prior loan, or in the
case of a revolving loan, the lender may charge a loan origination fee
only on the difference between the amount of the existing credit line
and the increased credit line. This subsection does not prohibit a lender
from contracting for and receiving a fee for preparing deeds,
mortgages, reconveyance, and similar documents under
IC 24-4.5-3-202(d)(ii), in addition to the charges provided for in
subsection (8).
date the creditor or mortgage servicer receives the first written
request until the date on which the accurate consumer loan
payoff amount is provided;
if an accurate consumer loan payoff amount is not provided by the
creditor or mortgage servicer within ten (10) calendar days after
the creditor or mortgage servicer receives the debtor's second
written request, and the creditor or mortgage servicer failed to
comply with subdivision (a).
A liability under this subsection is an excess charge under
IC 24-4.5-5-202.
(4) As used in this subsection, "mortgage transaction" means a
consumer credit loan in which a mortgage, deed of trust, or a land
contract that constitutes a lien is created or retained against land
upon which there is a dwelling that is or will be used by the debtor
primarily for personal, family, or household purposes. This
subsection applies to a mortgage transaction with respect to which
any installment or minimum payment due is delinquent for at least
sixty (60) days. The creditor, servicer, or the creditor's agent shall
acknowledge a written offer made in connection with a proposed
short sale not later than ten (10) business days after the date of the
offer if the offer complies with the requirements for a qualified
written request set forth in 12 U.S.C. 2605(e)(1)(B). The creditor,
servicer, or creditor's agent is required to acknowledge a written
offer made in connection with a proposed short sale from a third
party acting on behalf of the debtor only if the debtor has provided
written authorization for the creditor, servicer, or creditor's agent
to do so. Not later than thirty (30) business days after receipt of an
offer under this subsection, the creditor, servicer, or creditor's
agent shall respond to the offer with an acceptance or a rejection
of the offer. As used in this subsection, "short sale" means a
transaction in which the property that is the subject of a mortgage
transaction is sold for an amount that is less than the amount of the
debtor's outstanding obligation under the mortgage transaction. A
creditor or mortgage servicer that fails to respond to an offer
within the time prescribed by this subsection is liable in accordance
with 12 U.S.C. 2605(f) in any action brought under that section.
unpaid balances of the principal which is more than three
hundred dollars ($300) but does not exceed one thousand
dollars ($1,000); and
(iii) fifteen percent (15%) per year on that part of the unpaid
balances of the principal which is more than one thousand
dollars ($1000); or
(b) twenty-one percent (21%) per year on the unpaid balances of
the principal.
(3) This section does not limit or restrict the manner of contracting
for the loan finance charge, whether by way of add-on, discount, or
otherwise, so long as the rate of the loan finance charge does not
exceed that permitted by this section. If the loan is precomputed:
(a) the loan finance charge may be calculated on the assumption
that all scheduled payments will be made when due; and
(b) the effect of prepayment is governed by the provisions on
rebate upon prepayment (IC 24-4.5-3-210).
(4) The term of a loan for the purposes of this section commences
on the date the loan is made. Differences in the lengths of months are
disregarded, and a day may be counted as one-thirtieth (1/30) of a
month. Subject to classifications and differentiations the lender may
reasonably establish, a part of a month in excess of fifteen (15) days
may be treated as a full month if periods of fifteen (15) days or less are
disregarded and that procedure is not consistently used to obtain a
greater yield than would otherwise be permitted.
(5) Subject to classifications and differentiations, the lender may
reasonably establish and make the same loan finance charge on all
principal amounts within a specified range. A loan finance charge does
not violate subsection (2) if:
(a) when applied to the median amount within each range, it does
not exceed the maximum permitted in subsection (2); and
(b) when applied to the lowest amount within each range, it does
not produce a rate of loan finance charge exceeding the rate
calculated according to paragraph (a) by more than eight percent
(8%) of the rate calculated according to paragraph (a).
(6) The amounts of three hundred dollars ($300) and one thousand
dollars ($1,000) in subsection (2) and thirty dollars ($30) in subsection
(7) are subject to change pursuant to the provisions on adjustment of
dollar amounts (IC 24-4.5-1-106). For the adjustment of the amount of
thirty dollars ($30), the Reference Base Index to be used is the Index
for October 1992.
(7) With respect to a supervised loan not made pursuant to a
revolving loan account, the lender may contract for and receive a
minimum loan finance charge of not more than thirty dollars ($30). The
minimum loan finance charge allowed under this subsection may be
imposed only if:
(a) the borrower debtor prepays in full a consumer loan,
refinancing, or consolidation, regardless of whether the loan,
refinancing, or consolidation is precomputed;
(b) the loan, refinancing, or consolidation prepaid by the borrower
debtor is subject to a loan finance charge that:
(i) is contracted for by the parties; and
applicant for initial licensure or certification under this chapter to
submit fingerprints for a national criminal history background
check (as defined in IC 10-13-3-12) by the Federal Bureau of
Investigation, for use by the board in determining whether the
applicant should be denied licensure or certification under this
chapter for any reason set forth in subsection (a)(1). The applicant
shall pay any fees or costs associated with the fingerprints and
background check required under this subsection. The board may
not release the results of a background check described in this
subsection to any private entity.
(c) The board may request evidence of compliance with this
section in accordance with subsection (d). Evidence of compliance
with this section may include any of the following:
(1) Subject to subsections (b) and (d)(2), criminal background
checks, including a national criminal history background
check (as defined in IC 10-13-3-12) by the Federal Bureau of
Investigation.
(2) Credit histories.
(3) Other background checks considered necessary by the
board.
(d) The board may request evidence of compliance with this
section at any of the following times:
(1) The time of application for an initial license or certificate.
(2) The time of renewal of a license or certificate.
(3) Any other time considered necessary by the board.
(e) The commission, upon recommendation of the board, shall
adopt rules under IC 4-22-2 to implement this section.
A person described in subsection (b)(3)(B) who is involved in the
transaction may provide the information required by this
subsection for a person described in subsection (b)(3)(A) that
serves as the principal broker for the person described in
subsection (b)(3)(B).
(e) A person described in subsection (b) who fails to comply with
subsection (d) is subject to a civil penalty of one hundred dollars
($100) for each closing with respect to which the person fails to
comply with subsection (d). The penalty:
(1) may be enforced by the state agency that has
administrative jurisdiction over the person in the same
manner that the agency enforces the payment of fees or other
penalties payable to the agency; and
(2) shall be paid into the home ownership education account
established by IC 5-20-1-27.
(f) Subject to subsection (g), the department shall make the
information stored in the data base described in subsection
(c)(2)(D) accessible to:
(1) each entity described in IC 4-6-12-4; and
(2) the homeowner protection unit established under
IC 4-6-12-2.
(g) The department, a closing agent who submits a form under
subsection (c), each entity described in IC 4-6-12-4, and the
homeowner protection unit established under IC 4-6-12-2 shall
exercise all necessary caution to avoid disclosure of any
information:
(1) concerning a person described in subsection (b), including
the person's license, registration, or certificate number; and
(2) contained in the data base described in subsection
(c)(2)(D);
except to the extent required or authorized by state or federal law.
(h) The department may adopt rules under IC 4-22-2 to
implement this section. Rules adopted by the department under
this subsection may establish procedures for the department to:
(1) establish;
(2) collect; and
(3) change as necessary;
an administrative fee to cover the department's expenses in
establishing and maintaining the electronic system required by this
section.
(i) If the department adopts a rule under IC 4-22-2 to establish
an administrative fee to cover the department's expenses in
establishing and maintaining the electronic system required by this
section, as allowed under subsection (h), the department may:
(1) require the fee to be paid:
(A) to the closing agent responsible for inputting the
information and submitting the form described in
subsection (c)(2); and
(B) by the borrower in the transaction;
(2) allow the closing agent described in subdivision (1)(A) to
retain a part of the fee collected to cover the closing agent's
costs in inputting the information and submitting the form
described in subsection (c)(2); and
(3) require the closing agent to pay the remainder of the fee
collected to the department for deposit in the title insurance
enforcement fund established by IC 27-7-3.6-1, for the
department's use in establishing and maintaining the
electronic system required by this section.
more than fifteen thousand dollars ($15,000). The exemption
under this subdivision is individually available to joint debtors
concerning property held by them as tenants by the entireties.
(2) Other real estate or tangible personal property of eight
thousand dollars ($8,000).
(3) Intangible personal property, including choses in action,
deposit accounts, and cash (but excluding debts owing and
income owing), of three hundred dollars ($300).
(4) Professionally prescribed health aids for the debtor or a
dependent of the debtor.
(5) Any interest that the debtor has in real estate held as a tenant
by the entireties. The exemption under this subdivision does not
apply to a debt for which the debtor and the debtor's spouse are
jointly liable.
(6) An interest, whether vested or not, that the debtor has in a
retirement plan or fund to the extent of:
(A) contributions, or portions of contributions, that were made
to the retirement plan or fund by or on behalf of the debtor or
the debtor's spouse:
(i) which were not subject to federal income taxation to the
debtor at the time of the contribution; or
(ii) which are made to an individual retirement account in
the manner prescribed by Section 408A of the Internal
Revenue Code of 1986;
(B) earnings on contributions made under clause (A) that are
not subject to federal income taxation at the time of the levy;
and
(C) roll-overs of contributions made under clause (A) that are
not subject to federal income taxation at the time of the levy.
(7) Money that is in a medical care savings account established
under IC 6-8-11.
(8) Money that is in a health savings account established
under Section 223 of the Internal Revenue Code of 1986.
(8) (9) Any interest the debtor has in a qualified tuition program,
as defined in Section 529(b) of the Internal Revenue Code of
1986, but only to the extent funds in the program are not
attributable to:
(A) excess contributions, as described in Section 529(b)(6) of
the Internal Revenue Code of 1986, and earnings on the excess
contributions;
(B) contributions made by the debtor within one (1) year
before the date of the levy or the date a bankruptcy petition is
filed by or against the debtor, and earnings on the
contributions; or
(C) the excess over five thousand dollars ($5,000) of aggregate
contributions made by the debtor for all programs under this
subdivision and education savings accounts under subdivision
(9) (10) having the same designated beneficiary:
(i) not later than one (1) year before; and
(ii) not earlier than two (2) years before;
the date of the levy or the date a bankruptcy petition is filed by
or against the debtor, and earnings on the aggregate
contributions.
(9) (10) Any interest the debtor has in an education savings
account, as defined in Section 530(b) of the Internal Revenue
Code of 1986, but only to the extent funds in the account are not
attributable to:
(A) excess contributions, as described in Section 4973(e) of
the Internal Revenue Code of 1986, and earnings on the excess
contributions;
(B) contributions made by the debtor within one (1) year
before the date of the levy or the date a bankruptcy petition is
filed by or against the debtor, and earnings on the
contributions; or
(C) the excess over five thousand dollars ($5,000) of aggregate
contributions made by the debtor for all accounts under this
subdivision and qualified tuition programs under subdivision
(8) (9) having the same designated beneficiary:
(i) not later than one (1) year before; and
(ii) not earlier than two (2) years before;
the date of the levy or the date a bankruptcy petition is filed by
or against the debtor, and earnings on the excess contributions.
(10) (11) The debtor's interest in a refund or a credit received or
to be received under section 32 of the Internal Revenue Code of
1986.
(d) A bankruptcy proceeding that results in the ownership by the
bankruptcy estate of a debtor's interest in property held in a tenancy by
the entireties does not result in a severance of the tenancy by the
entireties.
(e) Real estate or personal property upon which a debtor has
voluntarily granted a lien is not, to the extent of the balance due on the
debt secured by the lien:
(1) subject to this chapter; or
(2) exempt from levy or sale on execution or any other final
process from a court.
IC 25-34.1-2-1.
(6) The real estate appraiser licensure and certification board
created by IC 25-34.1-8-1.
(c) The members of the task force shall annually appoint a chair
from among the members of the task force. Each year, the chair
shall rotate among the agencies set forth in subsection (b).
(d) Subject to subsection (e), beginning not later than July 2008,
the task force shall meet each month to:
(1) coordinate the state's efforts to:
(A) regulate the various participants involved in
originating, issuing, and closing home loans;
(B) enforce state laws and rules concerning mortgage
lending practices and mortgage fraud; and
(C) prevent fraudulent practices in the home loan
industry; and
(2) share information and resources necessary for the efficient
administration of the tasks set forth in subdivision (1), unless
prohibited by law.
(e) With respect to any meeting of the task force:
(1) one (1) or more members of the task force may participate
in the meeting; or
(2) the meeting may be conducted in its entirety;
by means of a conference telephone or similar communications
equipment by which all persons participating in the meeting can
communicate with each other. Participation by the means
described in this subsection constitutes presence in person at the
meeting.
(f) Beginning in 2008, not later than November 1 of each year,
the task force shall report to the legislative council on the activities
of each agency comprising the task force under subsection (b) with
respect to the most recent state fiscal year. The report required
under this subsection must include:
(1) information on the regulatory activities of each agency
described in subsection (b), including a description of any:
(A) disciplinary or enforcement actions taken;
(B) criminal prosecutions pursued;
(C) rules adopted;
(D) policies issued; or
(E) legislative recommendations made;
concerning the professions involved in originating, issuing,
and closing home loans;
(2) a description of any challenges:
(A) encountered by the task force during the most recent
state fiscal year; or
(B) anticipated by the task force in the current state fiscal
year;
in carrying out the duties set forth in subsection (d);
(3) any additional information required by the legislative
council; and
(4) any recommendations by the task force for legislation
necessary to assist the task force in carrying out the duties set
forth in subsection (d).
A report to the legislative council under this subsection must be in
an electronic format under IC 5-14-6.
____________________________ ____________________________
Representative Bardon Senator Lawson C
Chairperson
____________________________ ____________________________
Representative Burton Senator Broden
House Conferees Senate Conferees