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SENATE BILL No. 551

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.

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Lawson C

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    January 15, 2009, read first time and referred to Committee on Judiciary.

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PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts between statutes enacted by the 2008 Regular Session of the General Assembly.

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    A BILL FOR AN ACT to amend the Indiana Code concerning trade regulation.

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 Bank.
        (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 closed-end loan; or
        (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 that:
            (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 have.

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 attorney general:
        (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 following:
        (1) Court reporters.
        (2) Transcripts.
        (3) Certification of documents.
        (4) Photo duplication.
        (5) Witness attendance and mileage fees.
        (6) Postage.
        (7) Expert witnesses.
        (8) Depositions.
        (9) Notarizations.
        (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 license;
        (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.

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    (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 this section.
        (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 section.
    (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.
    (f) (g) Each enforcement procedure established in this section is supplemental to other enforcement procedures established in this section.