Introduced Version
HOUSE BILL No. 1645
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 24-5-15-6; IC 24-5.5; IC 24-9; IC 25-1-11;
IC 25-34.1-6-2.5.
Synopsis: Mortgage fraud and regulated professions. Amends the law
concerning the disclosures that a credit service organization must
provide to a buyer to reflect changes in the federal Fair Credit
Reporting Act concerning the circumstances under which a consumer
is entitled to a consumer report without charge from a consumer
reporting agency. Amends the statute concerning mortgage rescue
protection fraud to provide that certain: (1) financial institutions; (2)
government sponsored enterprises; (3) government agencies; and (4)
other persons; are subject to the requirement that a mortgagee provide
certain notice to a mortgagor at the time of filing a complaint in a
foreclosure action. Requires a foreclosure consultant to retain all
records related to services performed on behalf of a homeowner for at
least three years after the termination or conclusion of the foreclosure
consultant contract. Prohibits a person from engaging in, or soliciting
to engage in, a real estate or mortgage transaction without a permit or
license required by law. Prohibits a person from making certain
representations with respect to: (1) a mortgage or real estate
transaction; or (2) the property that is the subject of the transaction; if
the representation is not true and the person knows or reasonably
should know that the representation is not true. Provides that the board
that regulates a licensed profession may not approve the surrender of
a practitioner's license if the attorney general's office: (1) has filed an
administrative complaint concerning the practitioner's license; and (2)
opposes the surrender. Provides that a practitioner who has been
subjected to disciplinary sanctions may be required to pay the costs of
any real estate review appraisal obtained in connection with the
(Continued next page)
Effective: July 1, 2009.
Burton
January 16, 2009, read first time and referred to Committee on Financial Institutions.
Digest Continued
disciplinary
proceedings. Provides that a violation of the statutes
concerning: (1) credit service organizations; and (2) mortgage rescue
protection fraud; by a person licensed or required to be licensed as a
real estate salesperson or broker is a violation of the statute governing
the regulation of real estate salespersons and brokers and is subject to
certain specified enforcement procedures and sanctions.
Introduced
First Regular Session 116th General Assembly (2009)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
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NEW will appear in that style type in the introductory clause of each SECTION that adds
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HOUSE BILL No. 1645
A BILL FOR AN ACT to amend the Indiana Code concerning trade
regulation.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 24-5-15-6; (09)IN1645.1.1. -->
SECTION 1. IC 24-5-15-6 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 6. Before executing a
contract or agreement with a buyer or receiving money or other
valuable consideration, a credit services organization must provide the
buyer with a written statement that contains the following:
(1) A complete and detailed description of the services to be
performed by the credit services organization for the buyer and
the total cost of the services.
(2) A statement explaining the buyer's right to proceed against the
bond or surety account required under section 8 of this chapter.
(3) The name and address of the:
(A) surety company that issued a bond; or
(B) depository and the trustee of a surety account and the
account number of the surety account;
required under section 8 of this chapter.
(4) A complete and accurate statement of the buyer's right to
review any file on the buyer maintained by a consumer reporting
agency as provided under the Fair Credit Reporting Act (15
U.S.C. 1681 et seq.).
(5) A statement that the buyer's file is available for review:
(A) at no charge on request made to the consumer reporting
agency within thirty (30) days after the date of receipt of a
notice that credit has been denied; at the times and under the
circumstances set forth in 15 U.S.C. 1681j; and
(B) for a minimal charge at any other time as provided by 15
U.S.C. 1681j(f).
(6) A complete and accurate statement of the buyer's right to
dispute the completeness or accuracy of an item contained in a
file on the buyer maintained by a consumer reporting agency.
(7) A statement that accurate information cannot be permanently
removed from the files of a consumer reporting agency.
(8) A complete and accurate statement indicating when consumer
information becomes obsolete and when consumer reporting
agencies are prevented from issuing reports containing obsolete
information.
(9) A complete and accurate statement of the availability of
nonprofit credit counseling services.
SOURCE: IC 24-5.5-1-1; (09)IN1645.1.2. -->
SECTION 2. 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 24-5.5-3-1, 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)IN1645.1.3. -->
SECTION 3. 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, including the foreclosure consultant contract,
related to services performed on behalf of a homeowner for at least
three (3) years after the termination or conclusion of the
foreclosure consultant contract entered into by the foreclosure
consultant and the homeowner.
SOURCE: IC 24-9-1-1; (09)IN1645.1.4. -->
SECTION 4. IC 24-9-1-1, AS AMENDED BY P.L.181-2006,
SECTION 58, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2009]: Sec. 1. Except for IC 24-9-3-7(3) IC 24-9-3-7(c)(3)
and IC 24-9-3-7(c)(4), this article does not apply to:
(1) a loan made or acquired by a person organized or chartered
under the laws of this state, any other state, or the United States
relating to banks, trust companies, savings associations, savings
banks, credit unions, or industrial loan and investment companies;
or
(2) a loan:
(A) that can be purchased by the Federal National Mortgage
Association, the Federal Home Loan Mortgage Association, or
the Federal Home Loan Bank;
(B) to be insured by the United States Department of Housing
and Urban Development;
(C) to be guaranteed by the United States Department of
Veterans Affairs;
(D) to be made or guaranteed by the United States Department
of Agriculture Rural Housing Service;
(E) to be funded by the Indiana housing and community
development authority; or
(F) with a principal amount that exceeds the conforming loan
size limit for a single family dwelling as established by the
Federal National Mortgage Association.
SOURCE: IC 24-9-3-7; (09)IN1645.1.5. -->
SECTION 5. 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) As used in this section, "mortgage
transaction" includes:
(1) a home loan subject to this article;
(2) a loan described in IC 24-9-1-1;
(3) a first lien mortgage transaction (as defined in
IC 24-4.4-1-301) subject to IC 24-4.4;
(4) a consumer credit sale subject to IC 24-4.5-2 in which a
mortgage, deed of trust, or a land contract that constitutes a
lien is created or retained against land upon which there is a
dwelling that is or will be used by the debtor primarily for
personal, family, or household purposes; and
(5) a consumer credit loan subject to IC 24-4.5-3 in which a
mortgage, deed of trust, or a land contract that constitutes a
lien is created or retained against land upon which there is a
dwelling that is or will be used by the debtor primarily for
personal, family, or household purposes.
(b) As used in this section, "real estate transaction" has the
meaning set forth in IC 25-34.1-10-8.
(c) 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. or solicit to engage in,
a real estate transaction or a mortgage transaction without a
permit or license required by law; or
(4) with respect to a real estate transaction or a mortgage
transaction, represent that:
(A) the transaction has the sponsorship or approval of a
particular person or entity that it does not have and that
the person knows or reasonably should know it does not
have; or
(B) the real estate or property that is the subject of the
transaction has any improvements, appurtenances, uses,
characteristics, or associated benefits that it does not have
and that the person knows or reasonably should know it
does not have.
SOURCE: IC 24-9-3-8; (09)IN1645.1.6. -->
SECTION 6. IC 24-9-3-8 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2009]: Sec. 8. A person seeking to enforce
section 7(3) 7(c)(3) or 7(c)(4) of this chapter, may not knowingly or
intentionally intimidate, coerce, or harass another person.
SOURCE: IC 25-1-11-17; (09)IN1645.1.7. -->
SECTION 7. IC 25-1-11-17 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 17.
(a) Except as
provided in subsection (b), 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.
(b) The board may not approve the surrender of a practitioner's
license under subsection (a) if the office of the attorney general:
(1) has filed an administrative complaint concerning the
practitioner's license; and
(2) opposes the surrender of the practitioner's license.
SOURCE: IC 25-1-11-18; (09)IN1645.1.8. -->
SECTION 8. 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 review appraisals, in appropriate cases.
SOURCE: IC 25-34.1-6-2.5; (09)IN1645.1.9. -->
SECTION 9. IC 25-34.1-6-2.5 IS ADDED TO THE INDIANA
CODE AS A
NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2009]:
Sec. 2.5. (a) A violation of:
(1) IC 24-5-15; or
(2) IC 24-5.5;
by a person licensed or required to be licensed under this article is
a violation of this article.
(b) A person who commits a violation described in subsection (a)
commits a Class A infraction and is subject to:
(1) the enforcement procedures described in section 2 of this
chapter; and
(2) any sanction that may be imposed by the commission
under IC 25-1-11-12 for an act described in IC 25-1-11-11.