SENATE BILL No. 551
DIGEST OF INTRODUCED BILL
Citations Affected: IC 24-5.5; IC 24-9; IC 25-1-11; IC 25-34.1-6-2.
Synopsis: Mortgage and real estate matters. Provides that certain
notice of foreclosure requirements apply to all mortgagees. Requires a
foreclosure consultant to retain certain records for a specific time.
Allows certain licensing boards to require practitioners to pay real
estate appraisal costs in certain administrative actions. Prohibits certain
professional licensing boards from accepting the surrender of a
practitioner's license if the attorney general has filed a complaint
against the practitioner and opposes the surrender. Provides that a
broker or salesperson licensee who violates the credit services
organizations or mortgage rescue protection fraud provisions is subject
to certain disciplinary actions. Prohibits a person from: (1) engaging in
real estate transactions or consumer credit mortgage transactions
without a permit or license; or (2) misrepresenting certain terms and
characteristics of real estate transactions and consumer credit
mortgages; and subjects a person who violates any of these prohibitions
to certain penalties under the home loan practices law. Removes
language prohibiting a person from engaging in a deceptive act in
connection with certain loans.
Effective: July 1, 2009.
January 15, 2009, read first time and referred to Committee on Judiciary.
First Regular Session 116th General Assembly (2009)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
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between statutes enacted by the 2008 Regular Session of the General Assembly.
SENATE BILL No. 551
A BILL FOR AN ACT to amend the Indiana Code concerning trade
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 24-5.5-1-1; (09)IN0551.1.1. -->
SECTION 1. IC 24-5.5-1-1, AS ADDED BY P.L.209-2007,
SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2009]: Sec. 1. Except for IC 24-5.5-3,
this article does not
apply to the following:
(1) A person organized or chartered under the laws of this state,
any other state, or the United States that relate to a bank, a trust
company, a savings association, a savings bank, a credit union, or
an industrial loan and investment company.
(2) The Federal National Mortgage Association, the Federal
Home Loan Mortgage Corporation, or a Federal Home Loan
(3) A department or agency of the United States or of Indiana.
(4) A person that is servicing or enforcing a loan that it owns.
(5) A person that is servicing a loan:
(A) for a person described in subdivisions (1) through (4) of
this section; or
(B) insured by the Department of Housing and Urban
Development or guaranteed by the Veterans Administration.
(6) An attorney licensed to practice law in Indiana who is
representing a mortgagor.
SOURCE: IC 24-5.5-5-7; (09)IN0551.1.2. -->
SECTION 2. IC 24-5.5-5-7 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2009]: Sec. 7. A foreclosure consultant shall retain all records
and documents related to services performed on behalf of a
homeowner for at least three (3) years after the termination or
conclusion of a contract with the homeowner.
SOURCE: IC 24-9-2-12.5; (09)IN0551.1.3. -->
SECTION 3. IC 24-9-2-12.5 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2009]: Sec. 12.5. "Real estate transaction" has the meaning set
forth in IC 25-34.1-10-8.
SOURCE: IC 24-9-3-7; (09)IN0551.1.4. -->
SECTION 4. IC 24-9-3-7, AS AMENDED BY P.L.141-2005,
SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2009]: Sec. 7. A person may not:
(1) divide a loan transaction into separate parts with the intent of
evading a provision of this article;
(2) structure a home loan transaction as an open-end loan with the
intent of evading the provisions of this article if the loan would be
a high cost home loan if the home loan had been structured as a
(3) engage in a deceptive act in connection with a:
(A) home loan; or
(B) loan described in IC 24-9-1-1.
(3) engage or solicit to engage in a real estate transaction or
a consumer credit mortgage transaction without a permit or
license required by law; or
(4) represent that a real estate transaction or a consumer
credit mortgage transaction has sponsorship, approval,
performance, characteristics, accessories, uses, or benefits
(A) the real estate transaction or consumer credit
mortgage does not have; and
(B) the person knows or reasonably should know the real
estate transaction or consumer credit mortgage does not
SOURCE: IC 25-1-11-17; (09)IN0551.1.5. -->
SECTION 5. IC 25-1-11-17 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 17. A practitioner may
petition the board to accept the surrender of the practitioner's license
instead of having a hearing before the board. The practitioner may not
surrender the practitioner's license without the written approval of the
board, and the board may impose any conditions appropriate to the
surrender or reinstatement of a surrendered license. The board may
not accept the surrender of a practitioner's license if the office of
(1) has filed an administrative complaint concerning the
practitioner's license; and
(2) opposes the surrender of the license.
SOURCE: IC 25-1-11-18; (09)IN0551.1.6. -->
SECTION 6. IC 25-1-11-18, AS AMENDED BY P.L.194-2005,
SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2009]: Sec. 18. A practitioner who has been subjected to
disciplinary sanctions may be required by a board to pay the costs of
the proceeding. The practitioner's ability to pay shall be considered
when costs are assessed. If the practitioner fails to pay the costs, a
suspension may not be imposed solely upon the practitioner's inability
to pay the amount assessed. These costs are limited to costs for the
(1) Court reporters.
(3) Certification of documents.
(4) Photo duplication.
(5) Witness attendance and mileage fees.
(7) Expert witnesses.
(10) Administrative law judges.
(11) Real estate appraisals.
SOURCE: IC 25-34.1-6-2; (09)IN0551.1.7. -->
SECTION 7. IC 25-34.1-6-2 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 2. (a) A person who:
(1) performs the acts of a salesperson without a salesperson
(2) performs the acts of a broker without a broker license; or
(3) conducts, or solicits or accepts enrollment of students for, a
course as prescribed in IC 25-34.1-3 without course approval;
commits a Class A infraction. Upon conviction for an offense under
this section, the court shall add to any fine imposed, the amount of any
fee or other compensation earned in the commission of the offense.
Each transaction constitutes a separate offense.
(b) In all actions for the collection of a fee or other compensation for
performing acts regulated by this article, it must be alleged and proved
that, at the time the cause of action arose, the party seeking relief was
not in violation of this section.
(c) The commission may issue a cease and desist order to prevent
violations of this section.
(1) If the commission determines that a person is violating this
section, or is believed to be violating this section, the commission
may issue an order to that person setting forth the time and place
for a hearing at which the affected person may appear and show
cause as to why the challenged activities are not in violation of
(2) After an opportunity for hearing, if the commission determines
that the person is violating this section, the commission shall
issue a cease and desist order which shall describe the person and
activities which are the subject of the order.
(3) A cease and desist order issued under this section is
enforceable in the circuit courts of this state.
(d) The attorney general, the commission, or the prosecuting
attorney of any county in which a violation occurs may maintain an
action in the name of the state to enjoin a person from violating this
(e) In charging any person in a complaint for an injunction or in
affidavit, information, or indictment with the violation of the provisions
of this section, it is sufficient, without averring any further or more
particular facts, to charge that the person upon a certain day and in a
certain county either acted as a real estate broker or salesperson not
having a license or conducted, or solicited or accepted enrollment of
students for, a broker or salesperson course without course approval.
(f) A licensee who violates IC 24-5-15 or IC 24-5.5 may be
disciplined under IC 25-1-11 and this section.
Each enforcement procedure established in this section is
supplemental to other enforcement procedures established in this