CHAPTER 2. DEFINITIONS
IC 24-9-2
Chapter 2. Definitions
IC 24-9-2-1
Applicability
Sec. 1. The definitions in this chapter apply throughout thisarticle.
As added by P.L.73-2004, SEC.33.
IC 24-9-2-2
"Benchmark rate"
Sec. 2. "Benchmark rate" means the interest rate established underSection 152 of the Federal Home Ownership and Equity ProtectionAct of 1994 (15 U.S.C. 1602 (aa)) and the regulations adopted underthat act by the Federal Reserve Board, including 12 CFR 226.32 andthe Official Staff Commentary to the regulations as amended.
As added by P.L.73-2004, SEC.33.
IC 24-9-2-3
"Bona fide discount points"
Sec. 3. "Bona fide discount points" means loan discount pointsthat:
(1) are knowingly paid by the borrower;
(2) are paid for the express purpose of reducing the interest rateapplicable to the loan;
(3) reduce the interest rate from an interest rate that does notexceed the benchmark rate; and
(4) are recouped within the first four (4) years of the scheduledloan payments;
if the reduction in the interest rate that is achieved by the payment ofthe loan discount points reduces the interest charged on thescheduled payments so that the borrower's dollar amount of savingsin interest during the first four (4) years of the loan is equal to orgreater than the dollar amount of loan discount points paid by theborrower.
As added by P.L.73-2004, SEC.33.
IC 24-9-2-4
"Borrower"
Sec. 4. "Borrower" means a person obligated to repay a homeloan, including a coborrower, cosigner, or guarantor.
As added by P.L.73-2004, SEC.33.
IC 24-9-2-5
"Bridge loan"
Sec. 5. "Bridge loan" means temporary or short term financingwith a maturity of less than eighteen (18) months that requirespayments of interest only until the entire unpaid balance is due andpayable.
As added by P.L.73-2004, SEC.33.
IC 24-9-2-6
"Creditor"
Sec. 6. (a) "Creditor" means:
(1) a person:
(A) who regularly extends consumer credit that is subject toa finance charge or that is payable by written agreement inmore than four (4) installments; and
(B) to whom the debt arising from a home loan transactionis initially payable; or
(2) a person who brokers a home loan, including a person who:
(A) directly or indirectly solicits, processes, places, ornegotiates home loans for others;
(B) offers to solicit, process, place, or negotiate home loansfor others; or
(C) closes home loans that may be in the person's own namewith funds provided by others and that are thereafterassigned to the person providing funding for the loans.
(b) The term does not include:
(1) a servicer;
(2) a state or local housing finance authority;
(3) any other state or local governmental or quasi-governmentalentity; or
(4) an attorney providing legal services in association with theclosing of a home loan.
As added by P.L.73-2004, SEC.33.
IC 24-9-2-7
"Deceptive act"
Sec. 7. (a) "Deceptive act" means an act or a practice as part of aconsumer credit mortgage transaction involving real property locatedin Indiana in which a person at the time of the transaction knowinglyor intentionally:
(1) makes a material misrepresentation; or
(2) conceals material information regarding the terms orconditions of the transaction.
(b) For purposes of this section, "knowingly" means having actualknowledge at the time of the transaction.
As added by P.L.73-2004, SEC.33.
IC 24-9-2-8
"High cost home loan"
Sec. 8. (a) "High cost home loan" means a home loan with:
(1) a trigger rate that exceeds the benchmark rate; or
(2) total points and fees that exceed:
(A) five percent (5%) of the loan principal for a home loanhaving a loan principal of at least forty thousand dollars($40,000); or
(B) six percent (6%) of the loan principal for a home loanhaving a loan principal of less than forty thousand dollars($40,000). (b) Beginning July 1, 2006, the dollar amounts set forth in thissection are subject to change at the times and according to theprocedure set forth in the provisions of IC 24-4.5-1-106 concerningthe adjustment of dollar amounts in IC 24-4.5.
As added by P.L.73-2004, SEC.33.
IC 24-9-2-9
"Home loan"
Sec. 9. "Home loan" means a loan, other than an open end creditplan, a reverse mortgage transaction, or a loan described inIC 24-9-1-1, that is secured by a mortgage or deed of trust on realestate in Indiana on which there is located or will be located astructure or structures:
(1) designed primarily for occupancy of one (1) to four (4)families; and
(2) that is or will be occupied by a borrower as the borrower'sprincipal dwelling.
As added by P.L.73-2004, SEC.33. Amended by P.L.141-2005,SEC.4.
IC 24-9-2-10
"Points and fees"
Sec. 10. (a) Except as provided in subsection (b), "points andfees" means the total of the following:
(1) Points and fees (as defined in 12 CFR 226.32(b)(1) onJanuary 1, 2004).
(2) All compensation paid directly or indirectly to a mortgagebroker, including a broker that originates a loan in the broker'sown name.
As used in subdivision (2), "compensation" does not include apayment included in subdivision (1).
(b) The term does not include the following:
(1) Bona fide discount points.
(2) An amount not to exceed one and one-half (1 1/2) points inindirect broker compensation, if the terms of the loan do notinclude:
(A) a prepayment penalty, in the case of a home loandescribed in IC 24-9-3-6(b); or
(B) a prepayment penalty that exceeds two percent (2%) ofthe home loan principal, in the case of a home loan otherthan a home loan described in IC 24-9-3-6(b).
(3) Reasonable fees paid to an affiliate of the creditor.
(4) Interest prepaid by the borrower for the month in which thehome loan is closed.
As added by P.L.73-2004, SEC.33. Amended by P.L.52-2009, SEC.5.
IC 24-9-2-11
"Political subdivision"
Sec. 11. "Political subdivision" means a municipality, schooldistrict, public library, local housing authority, fire protection
district, public transportation corporation, local building authority,local hospital authority or corporation, local airport authority, specialservice district, special taxing district, or any other type of localgovernmental corporate entity.
As added by P.L.73-2004, SEC.33.
IC 24-9-2-12
"Rate"
Sec. 12. "Rate" means the interest rate charged on a home loan,based on an annual simple interest yield.
As added by P.L.73-2004, SEC.33.
IC 24-9-2-13
"Total loan amount"
Sec. 13. "Total loan amount" means the principal of the homeloan minus the points and fees that are included in the principalamount of the loan.
As added by P.L.73-2004, SEC.33.
IC 24-9-2-14
"Trigger rate"
Sec. 14. "Trigger rate" means:
(1) for fixed rate home loans in which the interest rate will notvary during the term of the loan, the rate as of the date ofclosing;
(2) for home loans in which the interest varies according to anindex, the sum of the index rate as of the date of closing plusthe maximum margin permitted at any time under the loanagreement; or
(3) for all other home loans in which the rate may vary at anytime during the term of the loan, the maximum rate that may becharged during the term of the home loan.
As added by P.L.73-2004, SEC.33.