IC 24-5-23.6-1 "Creditor"
Sec. 1. (a) As used in this chapter, "creditor" means:
(1) a person:
(A) that engages in Indiana in the extension of mortgages
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 whom the obligation arising from a mortgage is
initially payable, either on the face of the note or contract, or
by agreement if there is not a note or contract; or
(2) a person who brokers a mortgage, including a person who:
(A) directly or indirectly solicits, processes, places, or
negotiates mortgages for others;
(B) offers to solicit, process, place, or negotiate mortgages
for others; or
(C) closes mortgages that may be in the person's own name
with funds provided by others and that are thereafter
assigned to the person providing funding for the mortgages.
(b) The term does not include a person described in
IC 24-9-2-6(b). As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-2 "Debtor"
Sec. 2. (a) As used in this chapter, "debtor", with respect to a
mortgage, refers to the maker of the note secured by the mortgage.
(b) The term includes a prospective debtor with respect to a
mortgage for which a closing has not occurred. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-3 "Department"
Sec. 3. As used in this chapter, "department" refers to the
department of financial institutions established by IC 28-11-1-1. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-4 "Dwelling"
Sec. 4. As used in this chapter, "dwelling" means a residential
structure that is located in Indiana and that contains one (1) to four
(4) units, regardless of whether the structure is permanently attached
to real property. The term includes an individual:
(1) condominium unit;
(2) cooperative unit;
(3) mobile home; or
(4) trailer;
that is used as a residence. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-5 "Five star mortgage lender"
Sec. 5. As used in this chapter, "five star mortgage lender" means
a creditor that:
(1) offers at least one (1) mortgage product that qualifies as a
five star mortgage under the program; and
(2) has a current and accurate certification on file with the
department, as described in section 9(a)(3) of this chapter. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-6 "Indiana customer"
Sec. 6. As used in this chapter, "Indiana customer", with respect
to a mortgage offered by a creditor, means an individual who:
(1) is an Indiana resident at the time the mortgage is offered by
the creditor; or
(2) would become an Indiana resident after purchasing and
occupying the dwelling that is the subject of the mortgage being
offered. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-7 "Mortgage"
Sec. 7. (a) As used in this chapter, "mortgage" means a sale or
loan, or the refinancing or consolidation of a sale or loan, in which
a first mortgage, deed of trust, or a land contract that constitutes a
first lien, is created or retained against land that is located in Indiana
and upon which there is a dwelling that is or will be used by the
debtor primarily for personal, family, or household purposes.
(b) The term includes any of the following that meets the
conditions set forth in subsection (a):
(1) A home loan subject to IC 24-9.
(2) A loan described in IC 24-9-1-1, to the extent allowed under
federal law.
(3) A first lien mortgage transaction (as defined in
IC 24-4.4-1-301) subject to IC 24-4.4. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-8 "Program"
Sec. 8. As used in this chapter, "program" refers to the five star
mortgage program established by section 9 of this chapter. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-9 Five star mortgage program established; guidelines; requirements;
certifications; fees; investigations; enforcement
Sec. 9. (a) The five star mortgage program is established. Not later
than June 1, 2010, the department shall adopt guidelines to
implement the program. The program established by this section, as
implemented through the department's guidelines, must meet the
following criteria:
(1) The program must be available on a voluntary basis to
creditors that offer mortgages to Indiana customers after June
30, 2010.
(2) To participate in the program, a creditor must submit a
certification, on a form prescribed by the department, attesting
that the creditor qualifies as a five star mortgage lender.
(3) To qualify as a five star mortgage lender under the program,
a creditor must certify, on the form described in subdivision (2),
that the creditor meets the following conditions:
(A) The creditor offers or will offer to Indiana customers
after June 30, 2010, at least one (1) mortgage product that
qualifies as a five star mortgage under the program.
(B) The creditor does not have a record of any significant or
recurring violation of:
(i) IC 24-5-23.5-7; or
(ii) any other state or federal law, regulation, or rule
applicable to mortgage transactions;
as of the date of the creditor's certification. If the creditor is
not certain whether it meets the criterion set forth in this
clause, the creditor shall consult with the department before
filing a certification to participate in the program.
(C) The creditor does not have a director or an executive
officer who 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, as of the date of the creditor's certification. If
the creditor is not certain whether it meets the criterion set
forth in this clause, the creditor shall consult with the
department before filing a certification to participate in the
program.
(4) To qualify as a five star mortgage under the program, a
mortgage must include the following terms and conditions:
(A) If the mortgage involves a purchase money transaction,
the mortgage must require a down payment by the debtor, or
a person acting on behalf of the debtor, of at least ten
percent (10%) of the purchase price of the dwelling that is
the subject of the mortgage. If the mortgage involves the
refinancing of an existing mortgage, the customer must have
equity of at least ten percent (10%) in the dwelling that is the
subject of the mortgage.
(B) The mortgage must have a fixed rate of interest.
(C) The mortgage must provide for an escrow account that:
(i) is established by the creditor, or a person acting on
behalf of the creditor, for the benefit of the debtor;
(ii) is maintained by the creditor, or a person acting on
behalf of the creditor, during the life of the mortgage; and
(iii) is used during the life of the mortgage to pay taxes
and insurance owed with respect to the dwelling that is the
subject of the mortgage.
However, this clause does not apply if, in the creditor's
ordinary course of business, the creditor does not regularly
establish and maintain, or contract for the establishment and
maintenance of, escrow accounts for the payment of taxes
and insurance, on behalf of the creditor's customers.
(D) The term of the mortgage may not exceed thirty (30)
years.
(E) The mortgage may not include a prepayment penalty or
fee.
(5) A creditor that qualifies as a five star mortgage lender and
files a certification with the department under subdivision (3)
shall provide a written statement, on a form and in the manner
prescribed by the department, to any Indiana customer who:
(A) applies for a five star mortgage offered by the creditor;
and
(B) does not qualify for the five star mortgage based on the
creditor's underwriting standards for the five star mortgage.
The statement must set forth the reasons why the Indiana
customer did not qualify for the five star mortgage.
(6) A creditor that qualifies as a five star mortgage lender and
files a certification with the department may include that fact in
any marketing material or solicitation directed at Indiana
customers, subject to any conditions or limitations imposed by
the department in the guidelines adopted under this section.
(7) If a creditor:
(A) holds itself out as a five star mortgage lender and:
(i) the creditor has not filed an accurate certification,
including any renewal certification required by the
department under subsection (b)(3), with the department
under this chapter; or
(ii) the creditor has filed a certification or a renewal
certification with the department under this chapter and
subsequently ceases offering at least one (1) mortgage
product that qualifies as a five star mortgage; or
(B) fails to comply with any program requirement;
the department, upon discovering the act described in clause
(A) or (B), shall immediately provide written notice to the
creditor that the creditor does not qualify for participation in the
program, or no longer qualifies for participation in the program,
as appropriate. The notice provided under this subdivision must
inform the creditor of the reason or reasons the creditor does
not qualify for participation in the program, or no longer
qualifies for participation in the program, as appropriate. Not
later than seven (7) days after the date of the notice provided to
the creditor under this subdivision, the department shall remove
the creditor from the list of creditors published on the
department's Internet web site under subsection (c), as
appropriate, and shall post, on the same Internet web page on
which the list described in subsection (c) is published, a link to
the notice provided to the creditor under this subdivision.
(b) In addition to the program criteria required by subsection (a),
the guidelines adopted by the department under this section may
include the following:
(1) Provisions allowing a creditor that qualifies as a five star
mortgage lender and files a certification with the department to
include in the paperwork associated with a five star mortgage:
(A) a statement;
(B) a seal; or
(C) any other designation considered appropriate by the
department;
indicating that the particular mortgage product is a five star
mortgage.
(2) A requirement that a creditor that qualifies as a five star
mortgage lender and files a certification with the department
shall report the following information to the department on an
annual basis, or any other basis determined appropriate by the
department:
(A) The total number and types of residential mortgage
products that were offered by the creditor to Indiana
customers during the applicable reporting period, including
any five star mortgages reported under clause (C).
(B) The total number of residential mortgages described in
clause (A) that were closed by the creditor during the
applicable reporting period, including any five star
mortgages that were closed during the reporting period, as
reported under clause (D).
(C) The number of mortgage products that:
(i) qualified as five star mortgages under the program; and
(ii) were offered by the creditor to Indiana customers;
during the applicable reporting period.
(D) The number of five star mortgages offered to Indiana
customers that were closed by the creditor during the
applicable reporting period.
(3) A requirement that a creditor that qualifies as a five star
mortgage lender and files a certification with the department
shall periodically submit to the department a renewal
certification, on a form prescribed by the department, in
conjunction with a report filed under subdivision (2), or at such
other time as the department determines appropriate. In any
renewal certification required under this subdivision, a creditor
must attest that the creditor:
(A) continued to meet the criteria necessary to qualify as a
five star mortgage lender; and
(B) complied with all program requirements;
during the applicable reporting period.
(4) A fee fixed by the department under IC 28-11-3-5 for each
certification and recertification submitted by a creditor under
this chapter. However, any fee fixed by the department under
this subdivision may not exceed the department's actual costs
to:
(A) process certifications and renewal certifications;
(B) publish the list described in subsection (c) on the
department's Internet web site; and
(C) otherwise administer the program.
(5) Any other program requirements, criteria, or incentives that
the department determines necessary to implement and evaluate
a program to encourage creditors to offer stable mortgage
products to qualified Indiana customers.
(c) The department shall publish on the department's Internet web
site a list of all creditors that have a current and accurate:
(1) certification under this chapter; or
(2) renewal certification under this chapter;
on file with the department. The Indiana housing and community
development authority and the securities division of the office of the
secretary of state shall provide a link to the list described in this
subsection on their respective Internet web sites.
(d) The program guidelines established by the department under
subsections (a) and (b) must be made available:
(1) for public inspection and copying at the offices of the
department under IC 5-14-3; and
(2) on the department's Internet web site.
(e) The department shall investigate any credible complaint
received by any means alleging that a creditor has committed a
violation described in subsection (a)(7). If the creditor that is the
subject of a complaint under this subsection is not subject to
regulation by the department, the department shall forward the
complaint to the appropriate state or federal regulatory agency.
(f) Notwithstanding subsection (a), the department may adopt a
different name for the program, other than the five star mortgage
program, in adopting the guidelines to implement the program. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-1 "Creditor"
Sec. 1. (a) As used in this chapter, "creditor" means:
(1) a person:
(A) that engages in Indiana in the extension of mortgages
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 whom the obligation arising from a mortgage is
initially payable, either on the face of the note or contract, or
by agreement if there is not a note or contract; or
(2) a person who brokers a mortgage, including a person who:
(A) directly or indirectly solicits, processes, places, or
negotiates mortgages for others;
(B) offers to solicit, process, place, or negotiate mortgages
for others; or
(C) closes mortgages that may be in the person's own name
with funds provided by others and that are thereafter
assigned to the person providing funding for the mortgages.
(b) The term does not include a person described in
IC 24-9-2-6(b). As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-2 "Debtor"
Sec. 2. (a) As used in this chapter, "debtor", with respect to a
mortgage, refers to the maker of the note secured by the mortgage.
(b) The term includes a prospective debtor with respect to a
mortgage for which a closing has not occurred. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-3 "Department"
Sec. 3. As used in this chapter, "department" refers to the
department of financial institutions established by IC 28-11-1-1. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-4 "Dwelling"
Sec. 4. As used in this chapter, "dwelling" means a residential
structure that is located in Indiana and that contains one (1) to four
(4) units, regardless of whether the structure is permanently attached
to real property. The term includes an individual:
(1) condominium unit;
(2) cooperative unit;
(3) mobile home; or
(4) trailer;
that is used as a residence. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-5 "Five star mortgage lender"
Sec. 5. As used in this chapter, "five star mortgage lender" means
a creditor that:
(1) offers at least one (1) mortgage product that qualifies as a
five star mortgage under the program; and
(2) has a current and accurate certification on file with the
department, as described in section 9(a)(3) of this chapter. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-6 "Indiana customer"
Sec. 6. As used in this chapter, "Indiana customer", with respect
to a mortgage offered by a creditor, means an individual who:
(1) is an Indiana resident at the time the mortgage is offered by
the creditor; or
(2) would become an Indiana resident after purchasing and
occupying the dwelling that is the subject of the mortgage being
offered. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-7 "Mortgage"
Sec. 7. (a) As used in this chapter, "mortgage" means a sale or
loan, or the refinancing or consolidation of a sale or loan, in which
a first mortgage, deed of trust, or a land contract that constitutes a
first lien, is created or retained against land that is located in Indiana
and upon which there is a dwelling that is or will be used by the
debtor primarily for personal, family, or household purposes.
(b) The term includes any of the following that meets the
conditions set forth in subsection (a):
(1) A home loan subject to IC 24-9.
(2) A loan described in IC 24-9-1-1, to the extent allowed under
federal law.
(3) A first lien mortgage transaction (as defined in
IC 24-4.4-1-301) subject to IC 24-4.4. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-8 "Program"
Sec. 8. As used in this chapter, "program" refers to the five star
mortgage program established by section 9 of this chapter. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-9 Five star mortgage program established; guidelines; requirements;
certifications; fees; investigations; enforcement
Sec. 9. (a) The five star mortgage program is established. Not later
than June 1, 2010, the department shall adopt guidelines to
implement the program. The program established by this section, as
implemented through the department's guidelines, must meet the
following criteria:
(1) The program must be available on a voluntary basis to
creditors that offer mortgages to Indiana customers after June
30, 2010.
(2) To participate in the program, a creditor must submit a
certification, on a form prescribed by the department, attesting
that the creditor qualifies as a five star mortgage lender.
(3) To qualify as a five star mortgage lender under the program,
a creditor must certify, on the form described in subdivision (2),
that the creditor meets the following conditions:
(A) The creditor offers or will offer to Indiana customers
after June 30, 2010, at least one (1) mortgage product that
qualifies as a five star mortgage under the program.
(B) The creditor does not have a record of any significant or
recurring violation of:
(i) IC 24-5-23.5-7; or
(ii) any other state or federal law, regulation, or rule
applicable to mortgage transactions;
as of the date of the creditor's certification. If the creditor is
not certain whether it meets the criterion set forth in this
clause, the creditor shall consult with the department before
filing a certification to participate in the program.
(C) The creditor does not have a director or an executive
officer who 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, as of the date of the creditor's certification. If
the creditor is not certain whether it meets the criterion set
forth in this clause, the creditor shall consult with the
department before filing a certification to participate in the
program.
(4) To qualify as a five star mortgage under the program, a
mortgage must include the following terms and conditions:
(A) If the mortgage involves a purchase money transaction,
the mortgage must require a down payment by the debtor, or
a person acting on behalf of the debtor, of at least ten
percent (10%) of the purchase price of the dwelling that is
the subject of the mortgage. If the mortgage involves the
refinancing of an existing mortgage, the customer must have
equity of at least ten percent (10%) in the dwelling that is the
subject of the mortgage.
(B) The mortgage must have a fixed rate of interest.
(C) The mortgage must provide for an escrow account that:
(i) is established by the creditor, or a person acting on
behalf of the creditor, for the benefit of the debtor;
(ii) is maintained by the creditor, or a person acting on
behalf of the creditor, during the life of the mortgage; and
(iii) is used during the life of the mortgage to pay taxes
and insurance owed with respect to the dwelling that is the
subject of the mortgage.
However, this clause does not apply if, in the creditor's
ordinary course of business, the creditor does not regularly
establish and maintain, or contract for the establishment and
maintenance of, escrow accounts for the payment of taxes
and insurance, on behalf of the creditor's customers.
(D) The term of the mortgage may not exceed thirty (30)
years.
(E) The mortgage may not include a prepayment penalty or
fee.
(5) A creditor that qualifies as a five star mortgage lender and
files a certification with the department under subdivision (3)
shall provide a written statement, on a form and in the manner
prescribed by the department, to any Indiana customer who:
(A) applies for a five star mortgage offered by the creditor;
and
(B) does not qualify for the five star mortgage based on the
creditor's underwriting standards for the five star mortgage.
The statement must set forth the reasons why the Indiana
customer did not qualify for the five star mortgage.
(6) A creditor that qualifies as a five star mortgage lender and
files a certification with the department may include that fact in
any marketing material or solicitation directed at Indiana
customers, subject to any conditions or limitations imposed by
the department in the guidelines adopted under this section.
(7) If a creditor:
(A) holds itself out as a five star mortgage lender and:
(i) the creditor has not filed an accurate certification,
including any renewal certification required by the
department under subsection (b)(3), with the department
under this chapter; or
(ii) the creditor has filed a certification or a renewal
certification with the department under this chapter and
subsequently ceases offering at least one (1) mortgage
product that qualifies as a five star mortgage; or
(B) fails to comply with any program requirement;
the department, upon discovering the act described in clause
(A) or (B), shall immediately provide written notice to the
creditor that the creditor does not qualify for participation in the
program, or no longer qualifies for participation in the program,
as appropriate. The notice provided under this subdivision must
inform the creditor of the reason or reasons the creditor does
not qualify for participation in the program, or no longer
qualifies for participation in the program, as appropriate. Not
later than seven (7) days after the date of the notice provided to
the creditor under this subdivision, the department shall remove
the creditor from the list of creditors published on the
department's Internet web site under subsection (c), as
appropriate, and shall post, on the same Internet web page on
which the list described in subsection (c) is published, a link to
the notice provided to the creditor under this subdivision.
(b) In addition to the program criteria required by subsection (a),
the guidelines adopted by the department under this section may
include the following:
(1) Provisions allowing a creditor that qualifies as a five star
mortgage lender and files a certification with the department to
include in the paperwork associated with a five star mortgage:
(A) a statement;
(B) a seal; or
(C) any other designation considered appropriate by the
department;
indicating that the particular mortgage product is a five star
mortgage.
(2) A requirement that a creditor that qualifies as a five star
mortgage lender and files a certification with the department
shall report the following information to the department on an
annual basis, or any other basis determined appropriate by the
department:
(A) The total number and types of residential mortgage
products that were offered by the creditor to Indiana
customers during the applicable reporting period, including
any five star mortgages reported under clause (C).
(B) The total number of residential mortgages described in
clause (A) that were closed by the creditor during the
applicable reporting period, including any five star
mortgages that were closed during the reporting period, as
reported under clause (D).
(C) The number of mortgage products that:
(i) qualified as five star mortgages under the program; and
(ii) were offered by the creditor to Indiana customers;
during the applicable reporting period.
(D) The number of five star mortgages offered to Indiana
customers that were closed by the creditor during the
applicable reporting period.
(3) A requirement that a creditor that qualifies as a five star
mortgage lender and files a certification with the department
shall periodically submit to the department a renewal
certification, on a form prescribed by the department, in
conjunction with a report filed under subdivision (2), or at such
other time as the department determines appropriate. In any
renewal certification required under this subdivision, a creditor
must attest that the creditor:
(A) continued to meet the criteria necessary to qualify as a
five star mortgage lender; and
(B) complied with all program requirements;
during the applicable reporting period.
(4) A fee fixed by the department under IC 28-11-3-5 for each
certification and recertification submitted by a creditor under
this chapter. However, any fee fixed by the department under
this subdivision may not exceed the department's actual costs
to:
(A) process certifications and renewal certifications;
(B) publish the list described in subsection (c) on the
department's Internet web site; and
(C) otherwise administer the program.
(5) Any other program requirements, criteria, or incentives that
the department determines necessary to implement and evaluate
a program to encourage creditors to offer stable mortgage
products to qualified Indiana customers.
(c) The department shall publish on the department's Internet web
site a list of all creditors that have a current and accurate:
(1) certification under this chapter; or
(2) renewal certification under this chapter;
on file with the department. The Indiana housing and community
development authority and the securities division of the office of the
secretary of state shall provide a link to the list described in this
subsection on their respective Internet web sites.
(d) The program guidelines established by the department under
subsections (a) and (b) must be made available:
(1) for public inspection and copying at the offices of the
department under IC 5-14-3; and
(2) on the department's Internet web site.
(e) The department shall investigate any credible complaint
received by any means alleging that a creditor has committed a
violation described in subsection (a)(7). If the creditor that is the
subject of a complaint under this subsection is not subject to
regulation by the department, the department shall forward the
complaint to the appropriate state or federal regulatory agency.
(f) Notwithstanding subsection (a), the department may adopt a
different name for the program, other than the five star mortgage
program, in adopting the guidelines to implement the program. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-1 "Creditor"
Sec. 1. (a) As used in this chapter, "creditor" means:
(1) a person:
(A) that engages in Indiana in the extension of mortgages
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 whom the obligation arising from a mortgage is
initially payable, either on the face of the note or contract, or
by agreement if there is not a note or contract; or
(2) a person who brokers a mortgage, including a person who:
(A) directly or indirectly solicits, processes, places, or
negotiates mortgages for others;
(B) offers to solicit, process, place, or negotiate mortgages
for others; or
(C) closes mortgages that may be in the person's own name
with funds provided by others and that are thereafter
assigned to the person providing funding for the mortgages.
(b) The term does not include a person described in
IC 24-9-2-6(b). As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-2 "Debtor"
Sec. 2. (a) As used in this chapter, "debtor", with respect to a
mortgage, refers to the maker of the note secured by the mortgage.
(b) The term includes a prospective debtor with respect to a
mortgage for which a closing has not occurred. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-3 "Department"
Sec. 3. As used in this chapter, "department" refers to the
department of financial institutions established by IC 28-11-1-1. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-4 "Dwelling"
Sec. 4. As used in this chapter, "dwelling" means a residential
structure that is located in Indiana and that contains one (1) to four
(4) units, regardless of whether the structure is permanently attached
to real property. The term includes an individual:
(1) condominium unit;
(2) cooperative unit;
(3) mobile home; or
(4) trailer;
that is used as a residence. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-5 "Five star mortgage lender"
Sec. 5. As used in this chapter, "five star mortgage lender" means
a creditor that:
(1) offers at least one (1) mortgage product that qualifies as a
five star mortgage under the program; and
(2) has a current and accurate certification on file with the
department, as described in section 9(a)(3) of this chapter. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-6 "Indiana customer"
Sec. 6. As used in this chapter, "Indiana customer", with respect
to a mortgage offered by a creditor, means an individual who:
(1) is an Indiana resident at the time the mortgage is offered by
the creditor; or
(2) would become an Indiana resident after purchasing and
occupying the dwelling that is the subject of the mortgage being
offered. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-7 "Mortgage"
Sec. 7. (a) As used in this chapter, "mortgage" means a sale or
loan, or the refinancing or consolidation of a sale or loan, in which
a first mortgage, deed of trust, or a land contract that constitutes a
first lien, is created or retained against land that is located in Indiana
and upon which there is a dwelling that is or will be used by the
debtor primarily for personal, family, or household purposes.
(b) The term includes any of the following that meets the
conditions set forth in subsection (a):
(1) A home loan subject to IC 24-9.
(2) A loan described in IC 24-9-1-1, to the extent allowed under
federal law.
(3) A first lien mortgage transaction (as defined in
IC 24-4.4-1-301) subject to IC 24-4.4. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-8 "Program"
Sec. 8. As used in this chapter, "program" refers to the five star
mortgage program established by section 9 of this chapter. As added by P.L.115-2010, SEC.20.
IC 24-5-23.6-9 Five star mortgage program established; guidelines; requirements;
certifications; fees; investigations; enforcement
Sec. 9. (a) The five star mortgage program is established. Not later
than June 1, 2010, the department shall adopt guidelines to
implement the program. The program established by this section, as
implemented through the department's guidelines, must meet the
following criteria:
(1) The program must be available on a voluntary basis to
creditors that offer mortgages to Indiana customers after June
30, 2010.
(2) To participate in the program, a creditor must submit a
certification, on a form prescribed by the department, attesting
that the creditor qualifies as a five star mortgage lender.
(3) To qualify as a five star mortgage lender under the program,
a creditor must certify, on the form described in subdivision (2),
that the creditor meets the following conditions:
(A) The creditor offers or will offer to Indiana customers
after June 30, 2010, at least one (1) mortgage product that
qualifies as a five star mortgage under the program.
(B) The creditor does not have a record of any significant or
recurring violation of:
(i) IC 24-5-23.5-7; or
(ii) any other state or federal law, regulation, or rule
applicable to mortgage transactions;
as of the date of the creditor's certification. If the creditor is
not certain whether it meets the criterion set forth in this
clause, the creditor shall consult with the department before
filing a certification to participate in the program.
(C) The creditor does not have a director or an executive
officer who 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, as of the date of the creditor's certification. If
the creditor is not certain whether it meets the criterion set
forth in this clause, the creditor shall consult with the
department before filing a certification to participate in the
program.
(4) To qualify as a five star mortgage under the program, a
mortgage must include the following terms and conditions:
(A) If the mortgage involves a purchase money transaction,
the mortgage must require a down payment by the debtor, or
a person acting on behalf of the debtor, of at least ten
percent (10%) of the purchase price of the dwelling that is
the subject of the mortgage. If the mortgage involves the
refinancing of an existing mortgage, the customer must have
equity of at least ten percent (10%) in the dwelling that is the
subject of the mortgage.
(B) The mortgage must have a fixed rate of interest.
(C) The mortgage must provide for an escrow account that:
(i) is established by the creditor, or a person acting on
behalf of the creditor, for the benefit of the debtor;
(ii) is maintained by the creditor, or a person acting on
behalf of the creditor, during the life of the mortgage; and
(iii) is used during the life of the mortgage to pay taxes
and insurance owed with respect to the dwelling that is the
subject of the mortgage.
However, this clause does not apply if, in the creditor's
ordinary course of business, the creditor does not regularly
establish and maintain, or contract for the establishment and
maintenance of, escrow accounts for the payment of taxes
and insurance, on behalf of the creditor's customers.
(D) The term of the mortgage may not exceed thirty (30)
years.
(E) The mortgage may not include a prepayment penalty or
fee.
(5) A creditor that qualifies as a five star mortgage lender and
files a certification with the department under subdivision (3)
shall provide a written statement, on a form and in the manner
prescribed by the department, to any Indiana customer who:
(A) applies for a five star mortgage offered by the creditor;
and
(B) does not qualify for the five star mortgage based on the
creditor's underwriting standards for the five star mortgage.
The statement must set forth the reasons why the Indiana
customer did not qualify for the five star mortgage.
(6) A creditor that qualifies as a five star mortgage lender and
files a certification with the department may include that fact in
any marketing material or solicitation directed at Indiana
customers, subject to any conditions or limitations imposed by
the department in the guidelines adopted under this section.
(7) If a creditor:
(A) holds itself out as a five star mortgage lender and:
(i) the creditor has not filed an accurate certification,
including any renewal certification required by the
department under subsection (b)(3), with the department
under this chapter; or
(ii) the creditor has filed a certification or a renewal
certification with the department under this chapter and
subsequently ceases offering at least one (1) mortgage
product that qualifies as a five star mortgage; or
(B) fails to comply with any program requirement;
the department, upon discovering the act described in clause
(A) or (B), shall immediately provide written notice to the
creditor that the creditor does not qualify for participation in the
program, or no longer qualifies for participation in the program,
as appropriate. The notice provided under this subdivision must
inform the creditor of the reason or reasons the creditor does
not qualify for participation in the program, or no longer
qualifies for participation in the program, as appropriate. Not
later than seven (7) days after the date of the notice provided to
the creditor under this subdivision, the department shall remove
the creditor from the list of creditors published on the
department's Internet web site under subsection (c), as
appropriate, and shall post, on the same Internet web page on
which the list described in subsection (c) is published, a link to
the notice provided to the creditor under this subdivision.
(b) In addition to the program criteria required by subsection (a),
the guidelines adopted by the department under this section may
include the following:
(1) Provisions allowing a creditor that qualifies as a five star
mortgage lender and files a certification with the department to
include in the paperwork associated with a five star mortgage:
(A) a statement;
(B) a seal; or
(C) any other designation considered appropriate by the
department;
indicating that the particular mortgage product is a five star
mortgage.
(2) A requirement that a creditor that qualifies as a five star
mortgage lender and files a certification with the department
shall report the following information to the department on an
annual basis, or any other basis determined appropriate by the
department:
(A) The total number and types of residential mortgage
products that were offered by the creditor to Indiana
customers during the applicable reporting period, including
any five star mortgages reported under clause (C).
(B) The total number of residential mortgages described in
clause (A) that were closed by the creditor during the
applicable reporting period, including any five star
mortgages that were closed during the reporting period, as
reported under clause (D).
(C) The number of mortgage products that:
(i) qualified as five star mortgages under the program; and
(ii) were offered by the creditor to Indiana customers;
during the applicable reporting period.
(D) The number of five star mortgages offered to Indiana
customers that were closed by the creditor during the
applicable reporting period.
(3) A requirement that a creditor that qualifies as a five star
mortgage lender and files a certification with the department
shall periodically submit to the department a renewal
certification, on a form prescribed by the department, in
conjunction with a report filed under subdivision (2), or at such
other time as the department determines appropriate. In any
renewal certification required under this subdivision, a creditor
must attest that the creditor:
(A) continued to meet the criteria necessary to qualify as a
five star mortgage lender; and
(B) complied with all program requirements;
during the applicable reporting period.
(4) A fee fixed by the department under IC 28-11-3-5 for each
certification and recertification submitted by a creditor under
this chapter. However, any fee fixed by the department under
this subdivision may not exceed the department's actual costs
to:
(A) process certifications and renewal certifications;
(B) publish the list described in subsection (c) on the
department's Internet web site; and
(C) otherwise administer the program.
(5) Any other program requirements, criteria, or incentives that
the department determines necessary to implement and evaluate
a program to encourage creditors to offer stable mortgage
products to qualified Indiana customers.
(c) The department shall publish on the department's Internet web
site a list of all creditors that have a current and accurate:
(1) certification under this chapter; or
(2) renewal certification under this chapter;
on file with the department. The Indiana housing and community
development authority and the securities division of the office of the
secretary of state shall provide a link to the list described in this
subsection on their respective Internet web sites.
(d) The program guidelines established by the department under
subsections (a) and (b) must be made available:
(1) for public inspection and copying at the offices of the
department under IC 5-14-3; and
(2) on the department's Internet web site.
(e) The department shall investigate any credible complaint
received by any means alleging that a creditor has committed a
violation described in subsection (a)(7). If the creditor that is the
subject of a complaint under this subsection is not subject to
regulation by the department, the department shall forward the
complaint to the appropriate state or federal regulatory agency.
(f) Notwithstanding subsection (a), the department may adopt a
different name for the program, other than the five star mortgage
program, in adopting the guidelines to implement the program. As added by P.L.115-2010, SEC.20.
