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House Bill 1359


House Bill 1359

ARCHIVE (2008)

Latest Information

 

DIGEST OF HB 1359 (Updated March 14, 2008 3:45 pm - DI 101)


Mortgage lending. Requires the homeowner protection unit (unit) in 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 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 issuance of bonds by the authority is subject to the approval of the public finance director. (Current law provides that the authority's bonding authority is subject to governor's approval.) 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 closing instructions from the creditor. (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.
Current Status:
 Law Enacted
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