with the real property on which the manufactured home is located.
    Sec. 10. As used in this chapter, "points and fees" means any of the following:
        (1) An amount payable under a point, discount, or other system or additional charges.
        (2) A service or carrying charge.
        (3) A loan fee, finder's fee, or similar charge.
        (4) A fee for an investigation report.
        (5) Items exempted from computation of points and fees in extensions of credit secured by an interest in real property. However, the following items, when charged in connection with any extension of credit secured by an interest in real property, may not be included in the computation of the finance charge with respect to that transaction, provided that the creditor does not receive direct or indirect compensation in connection with the charge and the charge is not paid to an affiliate of the creditor:
            (A) Fees or premiums for title examination, title insurance, or similar purposes.
            (B) Fees for preparation of loan related documents.
            (C) Escrows for future payments of taxes and insurance.
            (D) Fees for notarizing deeds and other documents.
            (E) Appraisal fees, including fees related to any pest infestation or flood hazard inspections conducted before closing.
            (F) Credit reports.
        (6) All compensation paid directly or indirectly to a mortgage broker, including a broker that originates a loan in its own name in a table funded transaction.
        (7) The cost of all premiums financed by the creditor, directly or indirectly, for:
            (A) credit life;
            (B) credit disability;
            (C) credit unemployment;
            (D) credit property insurance;
            (E) other life or health insurance; or
            (F) any payments financed by the creditor directly or indirectly for any debt cancellation or suspension agreement or contract. However, insurance premiums calculated and paid on a monthly basis are not considered financed by the creditor.

with income or are limited to a percentage of income, or terms under which no payments are required under specified conditions;
        where, as a result of the refinancing, the borrower will lose one (1) or more of the benefits of the special mortgage.
    Sec. 17. A creditor may not recommend or encourage default on an existing loan or other debt before and in connection with the closing or planned closing of a home loan that refinances all or any part of the existing loan or debt.
    Sec. 18. A creditor may not charge a late payment fee except according to the following rules:
        (1) The late payment fee may not be in excess of four percent (4%) of the amount of the payment past due.
        (2) The late payment fee may be assessed only for a payment past due for fifteen (15) days or more.
        (3) The late payment fee may not be charged more than one (1) time with respect to a single late payment. If a late payment charge is deducted from a payment made on the loan and the deduction causes a subsequent default on a subsequent payment, a late payment charge may not be imposed for the default. If a late payment charge has been imposed one (1) time with respect to a particular late payment, a late payment fee may not be imposed with respect to any future payment that would have been timely and sufficient, but for the previous default.
        (4) A late payment fee may not be charged unless the creditor notifies the borrower within forty-five (45) days following the date the payment was due that a late payment charge has been imposed for a particular late payment. A late payment charge may not be collected from any borrower if the borrower informs the creditor that nonpayment of an installment is in dispute and presents proof of payment within forty-five (45) days after receipt of the creditor's notice of the late charge.
        (5) A creditor shall treat each payment as posted on the same date as it was received by the creditor, servicer, or creditor's agent, or at the address provided to the borrower by the creditor, servicer, or the creditor's agent for making payments.
    Sec. 19. A home loan may not contain a provision that permits the creditor, in its sole discretion, to accelerate the indebtedness. This subsection does not prohibit acceleration of the loan in good

faith due to the borrower's failure to abide by the material terms of the loan.
    Sec. 20. A creditor may not charge a fee for informing or transmitting to a person the balance due to pay off a home loan or to provide a release upon prepayment. A creditor must provide a payoff balance not later than seven (7) business days after the request is received by the creditor.
    Sec. 21. (a) The following additional limitations and prohibited practices apply to a high cost home loan:
        (1) A creditor making a high cost home loan may not directly or indirectly finance any points or fees.
        (2) Prepayment fees or penalties may not be included in the loan documents for a high cost home loan or charged to the borrower if the fees or penalties exceed in total:
            (A) in the first twelve (12) months after the loan closing, more than two percent (2%) of the loan amount prepaid; or
            (B) in the second twelve (12) months after the loan closing, more than one percent (1%) of the amount prepaid.
        (3) A prepayment penalty may not be contracted for after the second year following the loan closing.
        (4) A creditor may not include a prepayment penalty fee in a high cost home loan unless the creditor offers the borrower the option of choosing a loan product without a prepayment fee. A lender is considered to have complied with this clause if the borrower receives and executes the following disclosure:
            "LOAN PRODUCT CHOICE
            I was provided with an offer to accept a product both with and without a prepayment penalty provision. I have chosen to accept the product with a prepayment penalty.".
        This notice may be incorporated with any other language.
    (b) A high cost home loan may not contain a scheduled payment that is more than twice as large as the average of earlier scheduled payments, unless the payment schedule is adjusted to the seasonal or irregular income of the borrower.
    (c) A high cost home loan may not include payment terms under which the outstanding principal balance will increase at any time over the course of the loan because the regular periodic payments do not cover the full amount of interest due.
    (d) A high cost home loan may not contain a provision that increases the interest rate after default. However, this subsection does not apply to interest rate changes in a variable rate loan

otherwise consistent with the provisions of the loan documents if the change in the interest rate is not triggered by the event of default or the acceleration of the indebtedness.
    (e) A high cost home loan may not include terms under which more than two (2) periodic payments required under the loan are consolidated and paid in advance from the loan proceeds provided to the borrower.
    (f) Without regard to whether a borrower is acting individually or on behalf of others similarly situated, any provision of a home loan agreement that:
        (1) allows a party to require a borrower to assert any claim or defense in a forum that is:
            (A) less convenient;
            (B) more costly; or
            (C) more dilatory;
        for the resolution of the dispute than a judicial forum established in this state where the borrower may otherwise bring a claim or defense; or
        (2) limits in any way any claim or defense the borrower may have;
is unconscionable and void.
    (g) A creditor may not make a high cost home loan without first receiving certification from a third party nonprofit counselor approved by the United States Department of Housing and Urban Development or the Indiana housing finance authority established by IC 5-20-1-3 that the borrower has received counseling on the advisability of the loan transaction.
    (h) A creditor may not make a high cost home loan without regard to repayment ability. If a creditor presents evidence that the creditor followed commercially reasonable practices in determining the debt to income ratio, there is a rebuttable presumption that the creditor made the loan with due regard to repayment ability.
    (i) A creditor may not pay a contractor under a home improvement contract from the proceeds of a high cost home loan unless:
        (1) the creditor is presented with a signed and dated completion certificate showing that the home improvements have been completed; and
        (2) the instrument is payable to the borrower or jointly to the borrower and the contractor or, at the election of the borrower, through a third party escrow agent under a written

agreement signed by the borrower, the creditor, and the contractor before the disbursement.
    (j) A creditor may not charge a borrower any fees or other charges to modify, renew, extend, or amend a high cost home loan or to defer any payment due under the terms of a high cost home loan.
    (k) A creditor making a high cost home loan that has the right to foreclose must use the judicial foreclosure procedures of the state where the property securing the loan is located. The borrower has the right to assert in the proceeding the nonexistence of a default and any other claim or defense to acceleration and foreclosure, including any claim or defense based on any violations of this chapter, though no claim or defense is considered a compulsory counterclaim.
    (l) A creditor may not engage in a practice or have a policy that encourages making a high cost home loan on the basis of race, ethnicity, gender, or age.
    Sec. 22. (a) If a creditor asserts that grounds for acceleration exist and requires the payment in full of all sums secured by the security instrument, the borrower or anyone authorized to act on the borrower's behalf at any time before the title is transferred by means of foreclosure, by judicial proceeding and sale, or otherwise, may cure the default and reinstate the home loan by tendering the amount or performance as specified in the security instrument. If the borrower cures the default, the borrower must be reinstated to the same position as if the default had not occurred, and any acceleration of any obligation under the security instrument or note arising from the default is nullified as of the date of the cure.
    Sec. 23. (a) Before an action is filed to foreclose upon the home or before other action is taken to seize or transfer ownership of the home, a notice of the right to cure the default in a home loan must be delivered to the borrower, informing the borrower of the following:
        (1) The nature of default claimed on the home loan and the borrower's right to cure the default by paying the sum of money required to cure the default. However, a creditor or servicer may not refuse to accept any partial payment made or tendered in response to the notice. If the amount necessary to cure the default will change during the thirty (30) day period after the effective date of the notice due to the application of a daily interest rate or the addition of late fees as allowed by this chapter, the notice must give sufficient

information to enable the borrower to calculate the amount at any point during the thirty (30) day period.
        (2) The date by which the borrower must cure the default to avoid acceleration and initiation of foreclosure or other action to seize the home. The date may not be less than thirty (30) days after the date the notice is effective. The name, address, and telephone number of a person to whom the payment or tender must be made must also be disclosed.
        (3) That if the borrower does not cure the default by the date specified, the creditor may take steps to terminate the borrower's ownership in the property by requiring payment in full of the home loan and commencing a foreclosure proceeding or other action to seize the home.
        (4) The name and address of the creditor and the telephone number of a representative of the creditor whom the borrower may contact if the borrower disagrees with:
            (A) the creditor's assertion that a default has occurred; or
            (B) the correctness of the creditor's calculation of the amount required to cure the default.
    (b) To cure a default under this section, a borrower may not be required to pay a charge, fee, or penalty attributable to the exercise of the right to cure a default, as provided for in this section, other than the fees specifically allowed by this section. The borrower is not liable for:
        (1) attorney's fees relating to the borrower's default that are incurred by the lender before or during the thirty (30) day period described in subsection (a)(2); or
        (2) a fee exceeding one hundred dollars ($100) that is incurred by the lender after the expiration of the thirty (30) day period but before the lender files a foreclosure action or takes other action to seize or transfer ownership of the home.
After the lender files a foreclosure action or takes other action to seize or transfer ownership of the home, the borrower is liable only for attorney's fees that are reasonable and actually incurred by the lender, based on a reasonable hourly rate and a reasonable number of hours.
    (c) If a default is cured before the initiation of an action to foreclose or to seize the residence, the creditor may not institute the foreclosure proceeding or other action for that default. If a default is cured after the initiation of any action to foreclose, the creditor shall take the steps necessary to terminate the foreclosure proceeding or other action. A creditor making a home loan who

has the legal right to foreclose must use the judicial foreclosure procedures of the state where the property securing the loan is located. The borrower may assert in a judicial foreclosure proceeding or other action the nonexistence of a default and any other claim or defense to acceleration and foreclosure, including a claim or defense based on violations of this chapter. However, a claim or defense may not be considered a compulsory counterclaim.
    Sec. 24. (a) Notwithstanding any other law, but limited to the amount required to:
        (1) cover costs, including reasonable attorney's fees; or
        (2) extinguish the borrower's liability under a home loan;
a borrower may assert defenses, claims, or counterclaims in actions in connection with a home loan.
    (b) A borrower acting in an individual capacity may assert any defense, claim, or counterclaim against:
        (1) a creditor;
        (2) an assignee of a home loan; or
        (3) any subsequent holder of a home loan;
in connection with the loan as an original action.
    (c) A borrower acting in an individual capacity may assert any defense, claim, or counterclaim:
        (1) after an action:
            (A) to collect on a home loan;
            (B) to foreclose on the collateral securing a home loan is initiated;
            (C) on the debt arising from a home loan that is accelerated; or
            (D) when a home loan is sixty (60) days in default; and
        (2) against:
            (A) a creditor;
            (B) an assignee of a home loan; or
            (C) any subsequent holder of a home loan;
at any time during the term of the loan.
    (d) Notwithstanding any other law, the remedies provided in this chapter apply to:
        (1) the creditor;
        (2) a director, an officer, an employee, or a controlling stockholder of or agent for a creditor who personally participated in the making or approving of a high cost home loan; and
        (3) any other person to whom this chapter applies and who

violates the requirements of this chapter.
A person who purchases or is otherwise assigned a high cost home loan is subject to all affirmative claims and any defenses with respect to the loan that the borrower could assert against the original creditor or broker of the loan.
    (e) Notwithstanding any other law, a borrower who is in default for more than sixty (60) days or who is in foreclosure may assert a violation of this chapter against any creditor, holder, or assignee of the home loan by way of offset:
        (1) as an original action;
        (2) as a defense or counterclaim to an action to collect amounts owed; or
        (3) to obtain possession of the home secured by the home loan.
    (f) It is a violation of this chapter for a person to attempt to avoid the application of this chapter by:
        (1) dividing a loan transaction into separate parts; or
        (2) engaging in other subterfuge.
    Sec. 25. (a) A person who knowingly or intentionally violates this article commits:
        (1) a Class A misdemeanor; and
        (2) a deceptive act that is actionable by the attorney general under IC  24-5-0.5 and is subject to the penalties listed in IC 24-5-0.5.
    (b) A person who violates this chapter is liable to the borrower for the following:
        (1) Actual damages, including consequential and incidental damages. The borrower is not required to demonstrate reliance in order to receive actual damages.
        (2) Statutory damages equal to the finance charges agreed to in the home loan agreement, plus ten percent (10%) of the amount financed.
        (3) Punitive damages, if the violation was malicious or reckless.
        (4) Costs and reasonable attorney's fees.
    (c) A borrower may be granted injunctive, declaratory, and other equitable relief as the court determines appropriate in an action to enforce compliance with this chapter.
    (d) The knowing or intentional violation of this chapter or a rule adopted under the authority of this chapter renders the home loan agreement void, and the creditor has no right to collect, receive, or retain any principal, interest, or other charges with respect to the loan. The borrower may recover any payments made under the