CHAPTER 2. MISCELLANEOUS
IC 24-4.4-2
Chapter 2. Miscellaneous
IC 24-4.4-2-101
Short title
Sec. 101. This chapter shall be known and may be cited as theFirst Lien Mortgage Lending Act - Miscellaneous.
As added by P.L.145-2008, SEC.20.
IC 24-4.4-2-201
Duty to provide payoff amount; liability for failure to provide;prepayment penalty prohibited for adjustable rate mortgages;short sales
Sec. 201. (1) A creditor or mortgage servicer shall provide anaccurate payoff amount for a first lien mortgage transaction to thedebtor not later than ten (10) calendar days after the creditor ormortgage servicer receives the debtor's written request for theaccurate payoff amount. A creditor or mortgage servicer who fails toprovide an accurate payoff amount is liable for:
(a) one hundred dollars ($100) if an accurate payoff amount isnot provided by the creditor or mortgage servicer not later thanten (10) calendar days after the creditor or mortgage servicerreceives the debtor's first written request; and
(b) the greater of:
(i) one hundred dollars ($100); or
(ii) the loan finance charge that accrues on the first lienmortgage transaction from the date the creditor or mortgageservicer receives the first written request until the date onwhich the accurate payoff amount is provided;
if an accurate payoff amount is not provided by the creditor ormortgage servicer not later than ten (10) calendar days after thecreditor or mortgage servicer receives the debtor's secondwritten request, and the creditor or mortgage servicer fails tocomply with subdivision (a).
(2) This subsection applies to a first lien mortgage transaction, orthe refinancing or consolidation of a first lien mortgage transaction,that:
(a) is closed after June 30, 2009; and
(b) has an interest rate that is subject to change at one (1) ormore times during the term of the first lien mortgagetransaction.
A creditor in a transaction to which this subsection applies may notcontract for and may not charge the debtor a prepayment fee orpenalty.
(3) This subsection applies to a first lien mortgage transactionwith respect to which any installment or minimum payment due isdelinquent for at least sixty (60) days. The creditor, servicer, or thecreditor's agent shall acknowledge a written offer made in connectionwith a proposed short sale not later than ten (10) business days afterthe 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). Thecreditor, servicer, or creditor's agent is required to acknowledge awritten offer made in connection with a proposed short sale from athird party acting on behalf of the debtor only if the debtor hasprovided written authorization for the creditor, servicer, or creditor'sagent to do so. Not later than thirty (30) business days after receiptof an offer under this subsection, the creditor, servicer, or creditor'sagent shall respond to the offer with an acceptance or a rejection ofthe offer. Payment accepted by a creditor, servicer, or creditor's agentin connection with a short sale constitutes payment in fullsatisfaction of the first lien mortgage transaction unless the creditor,servicer, or creditor's agent obtains:
(a) the following statement: "The debtor remains liable for anyamount still owed under the first lien mortgage transaction."; or
(b) a statement substantially similar to the statement set forth insubdivision (a);
acknowledged by the initials or signature of the debtor, on or beforethe date on which the short sale payment is accepted. As used in thissubsection, "short sale" means a transaction in which the propertythat is the subject of a first lien mortgage transaction is sold for anamount that is less than the amount of the debtor's outstandingobligation under the first lien mortgage transaction. A creditor ormortgage servicer that fails to respond to an offer within the timeprescribed by this subsection is liable in accordance with 12 U.S.C.2605(f) in any action brought under that section.
As added by P.L.145-2008, SEC.20. Amended by P.L.52-2009,SEC.1; P.L.35-2010, SEC.10.
IC 24-4.4-2-301
Violation of state or federal law, regulation, or rule; enforcement
Sec. 301. (1) A violation of a state or federal law, regulation, orrule applicable to first lien mortgage transactions is a violation of thisarticle.
(2) The department may enforce penalty provisions set forth in 15U.S.C. 1640 for violations of disclosure requirements applicable tofirst lien mortgage transactions.
As added by P.L.145-2008, SEC.20.
IC 24-4.4-2-401
License required; registration with NMLSR; licensed mortgageloan originators; applications for licensure; director's authority tocontract with NMLSR
Sec. 401. (1) Unless a person subject to this article has firstobtained a license under this article from the department andannually maintains the license, the person shall not engage in Indianaas a creditor in first lien mortgage transactions. A separate licenseunder this article is required for each legal entity that engages inIndiana as a creditor in first lien mortgage transactions. However, aseparate license under this article is not required for each branch ofa legal entity licensed under this article. (2) Each:
(a) creditor licensed under this article; and
(b) entity exempt from licensing under this article that employsa licensed mortgage loan originator;
shall register with and maintain a valid unique identifier issued bythe NMLSR. Each licensed mortgage loan originator must beemployed by, and associated with, a licensed creditor, or an entityexempt from licensing under this article, in the NMLSR in order tooriginate loans.
(3) Applicants for a license under this article must apply for thelicense in the form prescribed by the director. Each form:
(a) must contain content as set forth by rule, instruction, orprocedure of the director; and
(b) may be changed or updated as necessary by the director tocarry out the purposes of this article.
(4) To fulfill the purposes of this article, the director mayestablish relationships or contracts with the NMLSR or other entitiesdesignated by the NMLSR to:
(a) collect and maintain records; and
(b) process transaction fees or other fees related to licensees orother persons subject to this article.
(5) For the purpose of participating in the NMLSR, the directoror the department may:
(a) waive or modify, in whole or in part, by rule or order, any ofthe requirements of this article; and
(b) establish new requirements as reasonably necessary toparticipate in the NMLSR.
As added by P.L.145-2008, SEC.20. Amended by P.L.35-2010,SEC.11.
IC 24-4.4-2-402
Applications for licenses; issuance; evidence of compliance; use ofNMLSR; denial of application; right to hearing; fees
Sec. 402. (1) The department shall receive and act on allapplications 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 thatthe professional training and experience, 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 asimilar function for the applicant; and
(c) if known, each person directly or indirectly owning ofrecord or owning beneficially at least ten percent (10%) of theoutstanding shares of any class of equity security of theapplicant;
are such as to warrant belief that the business will be operatedhonestly 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 must include:
(a) criminal background checks, as described in section 402.1of this chapter, including a national criminal history backgroundcheck (as defined in IC 10-13-3-12) by the Federal Bureau ofInvestigation, for any individual described in subsection (2);
(b) credit histories as described in section 402.2 of this chapter;
(c) surety bond requirements as described in section 402.3 ofthis chapter;
(d) a review of licensure actions in Indiana and in other states;and
(e) other background checks considered necessary by thedirector.
(5) For purposes of this section and in order to reduce the pointsof contact that the director has to maintain for purposes of thissection, the director may use the NMLSR as a channeling agent forrequesting and distributing information to and from any source asdirected by the director.
(6) The department may deny an application under this section ifthe director of the department determines that the application wassubmitted for the benefit of, or on behalf of, a person who does notqualify for a license.
(7) Upon written request, the applicant is entitled to a hearing onthe question of the qualifications of the applicant for a license in themanner provided in IC 4-21.5.
(8) The applicant shall pay the following fees at the timedesignated by the department:
(a) An initial license fee as established by the department underIC 28-11-3-5.
(b) An annual renewal fee as established by the departmentunder IC 28-11-3-5.
(c) Examination fees as established by the department underIC 28-11-3-5.
(9) A fee as established by the department under IC 28-11-3-5may be charged for each day a fee under subsection 8(b) or 8(c) isdelinquent.
(10) A license issued under this section is not assignable ortransferable.
As added by P.L.145-2008, SEC.20. Amended by P.L.35-2010,SEC.12.
IC 24-4.4-2-402.1
National criminal history background check; fingerprints;payment of fees or costs; use of NMLSR
Sec. 402.1. (1) When the director requests a national criminalhistory background check under section 402(4)(a) of this chapter foran individual described in section 402(2) of this chapter, the director
shall require the individual to submit fingerprints to the department,state police department, or NMLSR, as directed, at the time evidenceof compliance is requested under section 402(3) of this chapter. Theindividual to whom the request is made shall pay any fees or costsassociated with processing and evaluating the fingerprints and thenational criminal history background check. The national criminalhistory background check may be used by the director to determinethe individual's compliance with this section. The director or thedepartment may not release the results of the national criminalhistory background check to any private entity.
(2) For purposes of this section and in order to reduce the pointsof contact that the Federal Bureau of Investigation may have tomaintain for purposes of this section, the director may use theNMLSR as a channeling agent for requesting information from anddistributing information to the United States Department of Justiceor any governmental agency.
As added by P.L.35-2010, SEC.13.
IC 24-4.4-2-402.2
Credit reports; payment of fees or costs; demonstrated financialresponsibility; considerations
Sec. 402.2. (1) If the director requests a credit report for anindividual described in section 402(2) of this chapter, the individualto whom the request is made shall pay any fees or costs associatedwith procuring the report.
(2) The individual must submit personal history and experienceinformation in a form prescribed by the NMLSR, including thesubmission of authorization for the NMLSR or the director to obtainan independent credit report obtained from a consumer reportingagency described in Section 603(p) of the Fair Credit Reporting Act(15 U.S.C. 1681a(p)).
(3) The director may consider one (1) or more of the followingwhen determining if an individual has demonstrated financialresponsibility:
(a) Bankruptcies filed within the last ten (10) years.
(b) Current outstanding judgments, except judgments solely asa result of medical expenses.
(c) Current outstanding tax liens or other government liens orfilings.
(d) Foreclosures within the past three (3) years.
(e) A pattern of serious delinquent accounts within the pastthree (3) years.
As added by P.L.35-2010, SEC.14.
IC 24-4.4-2-402.3
Surety bond; penal sum to reflect amount of mortgages originated
Sec. 402.3. (1) Each:
(a) creditor; and
(b) entity exempt from licensing under this article that employsa licensed mortgage loan originator;must be covered by a surety bond in accordance with this section.
(2) A surety bond must:
(a) provide coverage for each creditor and each entity exemptfrom licensing under this article that employs a mortgage loanoriginator in an amount as prescribed in subsection (4); and
(b) be in a form prescribed by the director.
(3) The director may adopt rules or guidance documents withrespect to the requirements for a surety bond as necessary toaccomplish the purposes of this article.
(4) The penal sum of the surety bond shall be maintained in anamount that reflects the dollar amount of mortgage transactionsoriginated as determined by the director.
(5) If an action is commenced on the surety bond of a creditor oran entity exempt from licensing under this article as described insubsection (1), the director may require the filing of a new bond.
(6) A creditor or an entity exempt from licensing under this articleas described in subsection (1) shall file a new surety bondimmediately upon recovery of any action on the surety bond requiredunder this section.
As added by P.L.35-2010, SEC.15.
IC 24-4.4-2-402.4
NMLSR as sole entity responsible for processing licenses;reporting of information to NMLSR; confidentiality ofinformation; agreements with governmental agencies orassociations; waiver of privilege; processing fee
Sec. 402.4. (1) Subject to subsection (6), the director shalldesignate the NMLSR to serve as the sole entity responsible for:
(a) processing applications and renewals for licenses under thisarticle;
(b) issuing unique identifiers for licensees and entities exemptfrom licensing under this article that employ a licensedmortgage loan originator under this article; and
(c) performing other services that the director determines arenecessary for the orderly administration of the department'slicensing system under this article.
(2) Subject to the confidentiality provisions contained inIC 5-14-3, this section, and IC 28-1-2-30, the director shall regularlyreport significant or recurring violations of this article to theNMLSR.
(3) Subject to the confidentiality provisions contained inIC 5-14-3, this section, and IC 28-1-2-30, the director may reportcomplaints received regarding licensees under this article to theNMLSR.
(4) The director may report publicly adjudicated licensure actionsagainst a licensee to the NMLSR.
(5) The director shall establish a process in which licensees maychallenge information reported to the NMLSR by the department.
(6) The director's authority to designate the NMLSR undersubsection (1) is subject to the following: (a) Information stored in the NMLSR is subject to theconfidentiality provisions of IC 5-14-3 and IC 28-1-2-30. Aperson may not:
(i) obtain information from the NMLSR, unless the personis authorized to do so by statute;
(ii) initiate any civil action based on information obtainedfrom the NMLSR if the information is not otherwiseavailable to the person under any other state law; or
(iii) initiate any civil action based on information obtainedfrom the NMLSR if the person could not have initiated theaction based on information otherwise available to theperson under any other state law.
(b) Documents, materials, and other forms of information in thecontrol or possession of the NMLSR that are confidential underIC 28-1-2-30 and that are:
(i) furnished by the director, the director's designee, or alicensee; or
(ii) otherwise obtained by the NMLSR;
are confidential and privileged by law and are not subject toinspection under IC 5-14-3, subject to subpoena, subject todiscovery, or admissible in evidence in any civil action.However, the director may use the documents, materials, orother information available to the director in furtherance of anyaction brought in connection with the director's duties underthis article.
(c) Disclosure of documents, materials, and information:
(i) to the director; or
(ii) by the director;
under this subsection does not result in a waiver of anyapplicable privilege or claim of confidentiality with respect tothe documents, materials, or information.
(d) Information provided to the NMLSR is subject to IC 4-1-11.
(e) This subsection does not limit or impair a person's right to:
(i) obtain information;
(ii) use information as evidence in a civil action orproceeding; or
(iii) use information to initiate a civil action or proceeding;
if the information may be obtained from the director or thedirector's designee under any law.
(f) Except as otherwise provided in Public Law 110-289,Section 1512, the requirements under any federal law orIC 5-14-3 regarding the privacy or confidentiality of anyinformation or material provided to the NMLSR, and anyprivilege arising under federal or state law, including the rulesof any federal or state court, with respect to the information ormaterial, continue to apply to the information or material afterthe information or material has been disclosed to the NMLSR.The information and material may be shared with all state andfederal regulatory officials with mortgage industry oversightauthority without the loss of privilege or the loss of
confidentiality protections provided by federal law or IC 5-14-3.
(g) For purposes of this section, the director may enteragreements or sharing arrangements with other governmentalagencies, the Conference of State Bank Supervisors, theAmerican Association of Residential Mortgage Regulators, orother associations representing governmental agencies, asestablished by rule or order of the director.
(h) Information or material that is subject to a privilege orconfidentiality under subdivision (f) is not subject to:
(i) disclosure under any federal or state law governing thedisclosure to the public of information held by an officer oran agency of the federal government or the respective state;or
(ii) subpoena, discovery, or admission into evidence in anyprivate civil action or administrative process, unless withrespect to any privilege held by the NMLSR with respect tothe information or material, the person to whom theinformation or material pertains waives, in whole or in part,in the discretion of the person, that privilege.
(i) Any provision of IC 5-14-3 that concerns the disclosure of:
(i) confidential supervisory information; or
(ii) any information or material described in subdivision (f);
and that is inconsistent with subdivision (f) is superseded bythis section.
(j) This section does not apply with respect to information ormaterial that concerns the employment history of, and publiclyadjudicated disciplinary and enforcement actions against, aperson described in section 402(2) of this chapter and that isincluded in the NMLSR for access by the public.
(k) The director may require a licensee required to submitinformation to the NMLSR to pay a processing fee consideredreasonable by the director. In determining whether an NMLSRprocessing fee is reasonable, the director shall:
(i) require review of; and
(ii) make available;
the audited financial statements of the NMLSR.
As added by P.L.35-2010, SEC.16.
IC 24-4.4-2-403
License renewal; revocation or suspension of license not renewed;reinstatement or appeal
Sec. 403. (1) A license issued under this article must be renewedthrough the NMLSR not later than December 31 of each calendaryear. The minimum standards for license renewal for a creditorinclude the following:
(a) The creditor has continued to meet the surety bondrequirement under section 402.3 of this chapter.
(b) The creditor has filed the creditor's annual call report in amanner that satisfies section 405(4) of this chapter.
(c) The creditor has paid all required fees for renewal of the
license.
(d) The creditor and individuals described in section 402(2) ofthis chapter continue to meet all the standards for licensingcontained in section 402 of this chapter.
(2) A license issued by the department authorizing a person toengage in first lien mortgage transactions as a creditor under thisarticle may be revoked or suspended by the department if the personfails to:
(a) file any renewal form required by the department; or
(b) pay any license renewal fee described under section 402 ofthis chapter;
not later than sixty (60) days after the due date.
(3) A person whose license is revoked or suspended under thissection may do either of the following:
(a) Pay all delinquent fees and apply for reinstatement of thelicense.
(b) Appeal the revocation or suspension to the department foran administrative review under IC 4-21.5-3. Pending thedecision resulting from the hearing under IC 4-21.5-3concerning the license revocation or suspension, the licenseremains in force.
As added by P.L.145-2008, SEC.20. Amended by P.L.35-2010,SEC.17.
IC 24-4.4-2-404
Suspension or revocation of license; order to show cause;immediate suspension pending investigation; order;relinquishment of license; obligations under existing contracts notaffected; reinstatement
Sec. 404. (1) The department may issue to a person licensed toengage in first lien mortgage transactions as a creditor an order toshow cause why the person's license should not be revoked orsuspended for a period determined by the department. The ordermust state the place and time for a meeting with the department thatis not less than ten (10) days from the date of the order. After themeeting, the department shall revoke or suspend the license if thedepartment finds that:
(a) the licensee has repeatedly and willfully violated:
(i) this article or any rule, order, or guidance documentlawfully adopted or issued under this article; or
(ii) any other state or federal law, regulation, or ruleapplicable to first lien mortgage transactions;
(b) the licensee does not meet the licensing qualificationscontained in section 402 of this chapter; or
(c) facts or conditions exist which would clearly have justifiedthe department in refusing to grant a license had the facts orconditions been known to exist at the time the application forthe license was made.
(2) Except as provided in section 403 of this chapter, a revocationor suspension of a license is not authorized under this article unless
before instituting proceedings to suspend or revoke the license, thedepartment gives notice to the licensee of the conduct or facts thatwarrant the intended action, and the licensee is given an opportunityto show compliance with all lawful requirements for retention of thelicense.
(3) If the department finds that probable cause for revocation ofa license exists and that enforcement of this article requiresimmediate suspension of the license pending investigation, thedepartment may, after a hearing with the licensee upon five (5) dayswritten notice to the licensee, enter an order suspending the licensefor not more than thirty (30) days.
(4) Whenever the department revokes or suspends a license, thedepartment shall enter an order to that effect and notify the licenseeof the revocation or suspension. Not later than five (5) days after theentry of the order the department shall deliver to the licensee a copyof the order and the findings supporting the order.
(5) Any person holding a license to engage in first lien mortgagetransactions as a creditor may relinquish the license by notifying thedepartment in writing of the relinquishment. However, arelinquishment under this paragraph does not affect the person'sliability for acts previously committed and coming within the scopeof this article.
(6) If the director determines it to be in the public interest, thedirector may pursue revocation of a license of a licensee that hasrelinquished the license under subsection (5).
(7) A revocation, suspension, or relinquishment of a license doesnot impair or affect the obligation of any preexisting lawful contractbetween:
(a) the person whose license has been revoked, suspended, orrelinquished; and
(b) any debtor.
(8) The department may reinstate a license or terminate asuspension of a license to a person whose license has been revokedor suspended if the director determines that, at the time thedetermination is made, there is no fact or condition that exists thatclearly would justify the department in refusing to reinstate a license.
(9) If the director:
(a) has just cause to believe an emergency exists from which itis necessary to protect the interests of the public; or
(b) determines that a license was obtained for the benefit of, oron behalf of, a person who does not qualify for a license;
the director may proceed with the revocation of the license underIC 4-21.5-3-6.
As added by P.L.145-2008, SEC.20. Amended by P.L.35-2010,SEC.18.
IC 24-4.4-2-404.1
Violations by certain individuals; director's notice of intent to issueorder; felonies; civil penalties
Sec. 404.1. (1) If the director determines that a director, an
officer, or an employee of a creditor:
(a) has committed a violation of a statute, a rule, a final ceaseand desist order, any condition imposed in writing by thedirector in connection with the granting of any application orother request by the creditor, or any written agreement betweenthe creditor and the director or the department;
(b) has committed fraudulent or unconscionable conduct; or
(c) has been convicted of or has pleaded guilty or nolocontendere to a felony under the laws of Indiana or any otherjurisdiction;
the director, subject to subsection (2), may issue and serve upon theofficer, director, or employee a notice of the director's intent to issuean order removing the person from the person's office oremployment, an order prohibiting any participation by the person inthe conduct of the affairs of any creditor, or an order both removingthe person and prohibiting the person's participation.
(2) A violation, practice, or breach specified in subsection (1) issubject to the authority of the director under subsection (1) if thedirector finds any of the following:
(a) The interests of the creditor's customers could be seriouslyprejudiced by reason of the violation or practice.
(b) The violation, practice, or breach involves personaldishonesty on the part of the officer, director, or employeeinvolved.
(c) The violation, practice, or breach demonstrates a willful orcontinuing disregard by the officer, director, or employee forstate and federal laws and regulations, and for the consumerprotections contained in this article.
(3) A person who:
(a) has been convicted of; or
(b) has pleaded guilty or nolo contendere to;
a felony under the laws of Indiana or any other jurisdiction may notserve as an officer, a director, or an employee of a creditor, or servein any similar capacity, unless the person obtains the written consentof the director.
(4) A creditor that willfully permits a person to serve the creditorin violation of subsection (3) is subject to a civil penalty of fivehundred dollars ($500) for each day the violation continues.
As added by P.L.35-2010, SEC.19.
IC 24-4.4-2-404.2
Director's notice of intent to issue order; contents; hearing; finalorder; suspension or prohibition pending final order; officialrecord
Sec. 404.2. (1) A notice issued under this chapter must:
(a) be in writing;
(b) contain a statement of the facts constituting the allegedpractice, violation, or breach;
(c) state the facts alleged in support of the violation, practice, orbreach; (d) state the director's intention to enter an order under section404.4(1) of this chapter;
(e) be delivered to the board of directors of the creditor;
(f) be delivered to the officer, director, or employee concerned;
(g) specify the procedures that must be followed to initiate ahearing to contest the facts alleged; and
(h) if the director suspends or prohibits an officer, a director, oran employee of the creditor from participating in the affairs ofthe creditor, as described in subsection (5), include a statementof the suspension or prohibition.
(2) If a hearing is requested not later than ten (10) days afterservice of the written notice, the department shall hold a hearingconcerning the alleged practice, violation, or breach. The hearingshall be held not later than forty-five (45) days after receipt of therequest. The department, based on the evidence presented at thehearing, shall enter a final order under section 404.4 of this chapter.
(3) If no hearing is requested within the time specified insubsection (2), the director may proceed to issue a final order undersection 404.4 of this chapter on the basis of the facts set forth in thewritten notice.
(4) An officer, director, or employee who is removed from aposition under a removal order that has become final may notparticipate in the conduct of the affairs of any licensee under thisarticle without the approval of the director.
(5) The director may, for the protection of the creditor or theinterests of its customers, suspend from office or prohibit fromparticipation in the affairs of the creditor an officer, a director, or anemployee of a creditor who is the subject of a written notice servedby the director under section 404.1(1) of this chapter. A suspensionor prohibition under this subsection becomes effective upon serviceof the notice under section 404.1(1) of this chapter. Unless stayed bya court in a proceeding authorized by subsection (6), the suspensionor prohibition remains in effect pending completion of theproceedings related to the notice served under section 404.1(1) ofthis chapter and until the effective date of an order entered by thedepartment under subsection (2) or the director under subsection (3).Copies of the notice shall also be served upon the creditor or affiliateof which the person is an officer, a director, or an employee.
(6) Not more than fifteen (15) days after an officer, a director, oran employee has been suspended from office or prohibited fromparticipation in the conduct of the affairs of the creditor or affiliateunder subsection (5), the officer, director, or employee may apply toa court having jurisdiction for a stay of the suspension or prohibitionpending completion of the proceedings related to the written noticeserved under section 404.1(1) of this chapter, and the court may staythe suspension or prohibition.
(7) The department shall maintain an official record of aproceeding under this chapter.
As added by P.L.35-2010, SEC.20.
IC 24-4.4-2-404.3
Consent agreement; notice of charges not required
Sec. 404.3. If the director enters into a consent to a final orderunder section 404.4 of this chapter with a creditor, a director, anofficer, or an employee, the director is not required to issue and servea notice of charges upon the creditor, director, or officer undersection 404.1 of this chapter. A consent agreement may be negotiatedand entered into before or after the issuance of a notice of charges.The director shall provide a copy of the consent order to the board ofdirectors of the creditor.
As added by P.L.35-2010, SEC.21.
IC 24-4.4-2-404.4
Final order; remedies; consent presumed
Sec. 404.4. (1) If, after a hearing described in section 404.2(2) ofthis chapter, the department finds that the conditions specified insection 404.1 of this chapter have been established, the departmentmay issue a final order. If a hearing is not requested within the timespecified in section 404.2(2) of this chapter, the director may issuea final order on the basis of the facts set forth in the written noticeserved under section 404.1(1) of this chapter.
(2) Unless the director has entered into a consent agreementdescribed in section 404.3 of this chapter, a final order must includeseparately stated findings of fact and conclusions of law for allaspects of the order.
(3) In a final order under this section, the department or thedirector, as appropriate, may order one (1) or more of the followingwith respect to an officer, a director, or an employee of a creditor:
(a) The removal of the officer, director, or employee from theperson's office, position, or employment.
(b) A prohibition against any participation by the officer,director, or employee in the conduct of the affairs of anycreditor.
(c) If the subject of the order is an officer or a director of acreditor, and subject to section 404.6 of this chapter, theimposition of a civil penalty not to exceed fifteen thousanddollars ($15,000) for each practice, violation, or act that:
(i) is described in section 404.1 of this chapter; and
(ii) is found to exist by the department or the director.
(4) A final order shall be issued in writing not later than ninety(90) days after conclusion of a hearing held under section 404.2(2)of this chapter, unless this period is waived or extended with thewritten consent of all parties or for good cause shown.
(5) If the officer, director, or employee does not appearindividually or by an authorized representative at a hearing heldunder section 404.2(2) of this chapter, the officer, director, oremployee is considered to have consented to the issuance of a finalorder.
(6) The remedies provided in this chapter are in addition to otherremedies contained in this article.As added by P.L.35-2010, SEC.22.
IC 24-4.4-2-404.5
Final order; effective date; authority of department or court tostay, modify, or vacate
Sec. 404.5. (1) A final order issued under this chapter is effectiveon the eleventh day after service of the order. However, a final orderissued upon consent under section 404.3 of this chapter is effectiveat the time specified in the order.
(2) A final order remains effective and enforceable as provided inthe order.
(3) The department or a reviewing court may stay, modify, orvacate a final order.
As added by P.L.35-2010, SEC.23.
IC 24-4.4-2-404.6
Factors for determining amount of civil penalty; indemnificationby creditor prohibited; deposit of civil penalties in financialinstitutions fund
Sec. 404.6. (1) The director or the department, as appropriate,shall consider the following factors in determining the amount of acivil penalty that should be assessed against a director or an officerin a final order issued under section 404.4(3)(c) of this chapter:
(a) The appropriateness of the civil penalty with respect to thefinancial resources and good faith of the individual charged.
(b) The gravity of the practice, violation, or act.
(c) The history of previous practices, violations, or acts.
(d) The economic benefit derived by the individual from thepractice, violation, or act.
(e) Other factors that justice requires.
(2) A creditor may not indemnify a director or an officer for acivil penalty imposed in a final order under section 404.4(3)(c) ofthis chapter.
(3) Civil penalties shall be deposited in the financial institutionsfund established by IC 28-11-2-9.
As added by P.L.35-2010, SEC.24.
IC 24-4.4-2-404.7
Authority of director to enforce orders, agreements, or conditionsin court
Sec. 404.7. The director may enforce any of the following byapplying for appropriate relief to a court having jurisdiction:
(a) An order issued under this chapter.
(b) A written agreement entered into by the department or thedirector and any director, officer, or employee of a creditor.
(c) Any condition imposed in writing by the department or thedirector on any director, officer, or employee of a creditor.
As added by P.L.35-2010, SEC.25.
IC 24-4.4-2-405 Record keeping; use of unique identifier on forms and documents;use of examination and regulatory software; reports of conditionto NMLSR; financial statements; notice to department of certainevents or changes
Sec. 405. (1) Every licensee shall maintain records in a mannerthat will enable the department to determine whether the licensee iscomplying with this article. The record keeping system of a licenseeis sufficient if the licensee makes the required informationreasonably available. The department shall determine the sufficiencyof the records and whether the licensee has made the requiredinformation reasonably available. The department shall be given freeaccess to the records wherever the records are located. Recordsconcerning any first lien mortgage transaction shall be retained fortwo (2) years after the making of the final entry relating to thetransaction, but in the case of a revolving first lien mortgagetransaction, the two (2) years required under this subsection ismeasured from the date of each entry relating to the transaction.
(2) The unique identifier of any person originating a mortgagetransaction must be clearly shown on all mortgage transactionapplication forms and any other documents as required by thedirector.
(3) Every licensee shall use automated examination and regulatorysoftware designated by the director, including third party software.Use of the software consistent with guidance and policies issued bythe director is not a violation of IC 28-1-2-30.
(4) Each:
(a) creditor licensed by the department under this article; and
(b) entity that is exempt from licensing under this article andthat employs one (1) or more licensed mortgage originators;
shall submit to the NMLSR reports of condition, which must be in aform and must contain information as required by the NMLSR.
(5) Each:
(a) creditor licensed by the department under this article; and
(b) entity exempt from licensing under this article that employslicensed mortgage loan originators;
shall file with the department additional financial statements relatingto all first lien mortgage transactions originated by the licensedcreditor or the exempt entity as required by the department, but notmore frequently than annually, in the form prescribed by thedepartment.
(6) A licensed creditor shall file notification with the departmentif the licensee:
(a) has a change in name, address, or any of its principals;
(b) opens a new branch, closes an existing branch, or relocatesan existing branch;
(c) files for bankruptcy or reorganization; or
(d) is subject to revocation or suspension proceedings by a stateor governmental authority with regard to the licensed creditor'sactivities;
not later than thirty (30) days after the date of the event described in
this subsection.
(7) A licensee shall file notification with the department if thelicensee or any director, executive officer, or manager of the licenseehas been convicted of or pleaded guilty or nolo contendere to afelony under the laws of Indiana or any other jurisdiction. Thelicensee shall file the notification required by this subsection notlater than thirty (30) days after the date of the event described in thissubsection.
(8) A licensee shall file notification with the department if thelicensee or any director, executive officer, or manager of the licenseehas had the person's authority to do business in the securities,commodities, banking, financial services, insurance, real estate, orreal estate appraisal industry revoked or suspended by Indiana or byany other state, federal, or foreign governmental agency or selfregulatory organization. The licensee shall file the notificationrequired by this subsection not later than thirty (30) days after thedate of the event described in this subsection.
As added by P.L.145-2008, SEC.20. Amended by P.L.35-2010,SEC.26.
IC 24-4.4-2-501
Creditor's duty to comply with closing requirements
Sec. 501. A creditor in a first lien mortgage transaction shallcomply with IC 6-1.1-12-43, to the extent applicable.
As added by P.L.145-2008, SEC.20.
IC 24-4.4-2-502
Debtor's right to rescind; accruing interest prohibited duringrescission period; disbursement of proceeds
Sec. 502. (1) A violation by a creditor in a first lien mortgagetransaction of Section 125 of the Federal Consumer Credit ProtectionAct (15 U.S.C. 1635) (concerning a debtor's right to rescind atransaction) constitutes a violation of this article. A creditor may notaccrue interest during the period when a first lien mortgagetransaction may be rescinded under Section 125 of the FederalConsumer Credit Protection Act (15 U.S.C. 1635).
(2) A creditor must make available for disbursement the proceedsof a transaction subject to subsection (1) on the later of:
(a) the date the creditor is reasonably satisfied that the debtorhas not rescinded the transaction; or
(b) the first business day after the expiration of the rescissionperiod under subsection (1).
As added by P.L.145-2008, SEC.20. Amended by P.L.1-2009,SEC.135.
IC 24-4.4-2-503
Reverse mortgages; pamphlet; counseling required for debtor
Sec. 503. A creditor in a first lien mortgage transaction that:
(1) qualifies as a home equity conversion mortgage under theFederal Housing Administration's program; or (2) otherwise constitutes a reverse mortgage;
shall provide the debtor with a pamphlet that is approved by thedepartment and that describes the availability of reverse mortgagecounseling services provided by housing counselors approved by theSecretary of the United States Department of Housing and UrbanDevelopment, as provided in 24 CFR 206.41(a). The debtor mustreceive the counseling described in this section and present thecreditor with the certificate described in 24 CFR 206.41(c) before thecreditor may make a first lien mortgage transaction described in thissection to the debtor.
As added by P.L.35-2010, SEC.27.