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House Bill 1206


House Bill 1206

ARCHIVE (2010)

Latest Information

 

DIGEST OF HB1206 (Updated February 2, 2010 6:52 pm - DI 84)


Five star mortgages. Establishes a voluntary five star mortgage program for creditors (including mortgage brokers) that offer qualifying mortgages to Indiana customers after June 30, 2010. Requires the department of financial institutions (department) to adopt guidelines to implement the program. Provides that to qualify as a five star mortgage lender, a creditor must provide to the department a certification attesting that the creditor: (1) offers or will offer to Indiana customers one or more mortgage products that qualify as five star mortgages; (2) does not have a record of any violation of the law concerning mortgage appraisal fraud or other laws concerning mortgage transactions; and (3) does not have a director or an executive officer with a record of a felony involving fraud, deceit, or misrepresentation. Provides that to qualify as a five star mortgage, a mortgage: (1) must require: (A) a down payment of at least 10% of the purchase price of the dwelling, in the case of a purchase money transaction; or (B) that the customer have equity of at least 10% in the dwelling, in the case of a refinancing ; (2) must have a fixed rate of interest; (3) must provide for an escrow account for the payment of taxes and insurance, if the creditor regularly provides for such escrow accounts in the creditor's ordinary course of business; (4) may not have a term that exceeds 30 years; and (5) may not include a prepayment penalty or fee. Requires a five star mortgage lender to provide a written statement to any Indiana customer who: (1) applies for a five star mortgage offered by the lender; and (2) does not qualify for the mortgage based on the lender's underwriting standards. Provides that the statement must set forth the reasons why the customer did not qualify for the five star mortgage. Allows a creditor that qualifies as a five star mortgage lender to include that fact in marketing materials or solicitations directed at Indiana customers, subject to the department's guidelines. Provides that the department's guidelines may provide for the following: (1) Reporting requirements for five star mortgage lenders. (2) A civil penalty for creditors that falsely hold themselves out as five star mortgage lenders. (3) The use of a statement, a seal, or another designation on paperwork associated with a five star mortgage that indicates that the mortgage product is a five star mortgage. (4) A requirement that a creditor that qualifies as a five star mortgage lender and files a certification with the department shall periodically submit a renewal certification. (5) A fee for certifications and renewal certifications submitted by creditors participating in the program. Requires the department to publish on the department's Internet web site a list of all creditors that have a current and accurate certification or renewal certification on file with the department. Provides that the authority of the boards of trustees of the public employees' retirement fund (PERF) and of the state teachers' retirement fund (TRF) to invest in pooled funds includes the authority to invest in pools consisting in part or entirely of five star mortgages. Allows the PERF board to maintain alternative investment programs within: (1) the PERF annuity savings account; and (2) the legislators' defined contribution plan; that invest in pooled funds consisting in part or entirely of five star mortgages, or that otherwise invest in five star mortgages. Allows the TRF board to maintain alternative investment programs within the TRF annuity savings account that invest in pooled funds consisting in part or entirely of five star mortgages, or that otherwise invest in five star mortgages.
Current Status:
 In Committee - 2nd House
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