(a)As used in this section, "balloon
payment", with respect to a mortgage transaction, means any payment:
(1)that the creditor requires the debtor to make at any time during
the term of the mortgage;
(2)that represents the entire amount of the outstanding balance
with respect to the mortgage; and
(3)the entire amount of which is due as of a specified date or at
the end of a specified period;
if the aggregate amount of the minimum periodic payments required
under the mortgage would not fully amortize the outstanding balance
by the specified date or at the end of the specified period. The term
does not include a payment required by a creditor under a due-on-sale
clause (as defined in 12 U.S.C. 1701j-3(a)) or a payment required by
a creditor under a provision in the mortgage that permits Free access — add to your briefcase to read the full text and ask questions with AI
(a) As used in this section, "balloon
payment", with respect to a mortgage transaction, means any payment:
(1) that the creditor requires the debtor to make at any time during
the term of the mortgage;
(2) that represents the entire amount of the outstanding balance
with respect to the mortgage; and
(3) the entire amount of which is due as of a specified date or at
the end of a specified period;
if the aggregate amount of the minimum periodic payments required
under the mortgage would not fully amortize the outstanding balance
by the specified date or at the end of the specified period. The term
does not include a payment required by a creditor under a due-on-sale
clause (as defined in 12 U.S.C. 1701j-3(a)) or a payment required by
a creditor under a provision in the mortgage that permits the creditor
to accelerate the debt upon the debtor's default or failure to abide by the
material terms of the mortgage.
(b) This article does not apply to the following:
(1) Extensions of credit to government or governmental agencies
or instrumentalities.
(2) A first lien mortgage transaction in which the debt is incurred
primarily for a purpose other than a personal, family, or
household purpose.
(3) An extension of credit primarily for a business, a commercial,
or an agricultural purpose.
(4) Except for IC 24-4.4-2-401(2), IC 24-4.4-2-402.3, IC 24-4.4-2-405(4), and IC 24-4.4-2-405(5), a first lien mortgage
transaction made:
(a) in compliance with the requirements of; and
(b) by a community development corporation (as defined in IC 4-4-28-2) acting as a subrecipient of funds from;
the Indiana housing and community development authority
established by IC 5-20-1-3.
(5) Except for IC 24-4.4-2-401(2), IC 24-4.4-2-402.3, IC 24-4.4-2-405(4), and IC 24-4.4-2-405(5), a first lien mortgage
transaction made by an entity that exclusively uses funds provided
by the United States Department of Housing and Urban
Development under Title 1 of the federal Housing and
Community Development Act of 1974, Public Law 93-383, as
amended (42 U.S.C. 5301 et seq.).
(6) An extension of credit originated by the following:
(a) A depository institution.
(b) Subsidiaries that are not licensed under this article and that
are:
(i) owned and controlled by a depository institution; and
(ii) regulated by a federal banking agency.
(c) An institution regulated by the Farm Credit Administration.
(7) Except for IC 24-4.4-2-401(2), IC 24-4.4-2-402.3, IC 24-4.4-2-405(4), and IC 24-4.4-2-405(5), a credit union service
organization that is majority owned, directly or indirectly, by one
(1) or more credit unions.
(8) A person that does not engage as a creditor in first lien
mortgage transactions in Indiana. However, a person may
voluntarily register with the department for the purpose of
sponsoring employees who are licensed as mortgage loan
originators under this article and 750 IAC 9-3, and who are
engaged solely as third party loan processors or underwriters, if
the person does the following:
(a) Assumes responsibility for and reasonably supervises the
activities of all licensed mortgage loan originators sponsored by
the person.
(b) Registers with and maintains a valid unique identifier issued
by the NMLSR as required by IC 24-4.4-2-401(2), maintains a
surety bond in accordance with IC 24-4.4-2-402.3, submits to
the NMLSR reports of condition in accordance with IC 24-4.4-2-405(4) (subject to IC 24-4.4-2-402.4), and files
financial statements with the department in accordance with IC 24-4.4-2-405(5).
(c) Cooperates with the department, and provides access to
records and documents, as required by the department in
carrying out examinations of the activities of the licensed
mortgage loan originators sponsored by the person, as described
in IC 24-4.4-2-405(1).
(d) Agrees to comply with all law, rules, directives, and orders
in connection with the activities of the licensed mortgage loan
originators sponsored by the person, as the director determines
necessary to ensure compliance with the federal Secure and
Fair Enforcement for Mortgage Licensing Act of 2008 (12
U.S.C. 5101 et seq.) and with Indiana law.
(9) A first lien mortgage transaction originated by a registered
mortgage loan originator, when acting for an entity described in
subsection (6). However, a privately insured state chartered credit
union shall comply with the system of mortgage loan originator
registration developed by the Federal Financial Institutions
Examinations Council under Section 1507 of the federal Secure
and Fair Enforcement for Mortgage Licensing Act of 2008
(SAFE).
(10) An individual who offers or negotiates terms of a mortgage
transaction with or on behalf of an immediate family member of
the individual.
(11) An individual who offers or negotiates terms of a mortgage
transaction secured by a dwelling that served as the individual's
residence.
(12) Unless the attorney is compensated by:
(a) a lender;
(b) a mortgage broker;
(c) another mortgage loan originator; or
(d) any agent of the lender, mortgage broker, or other mortgage
loan originator described in clauses (a) through (c);
a licensed attorney who negotiates the terms of a mortgage
transaction on behalf of a client as an ancillary matter to the
attorney's representation of the client.
(13) The United States, any state or local government, or any
agency or instrumentality of any governmental entity, including
United States government sponsored enterprises.
(14) A person in whose name a tablefunded transaction is closed,
as described in section 301(34)(a) of this chapter. However, the
exemption provided by this subsection does not apply if:
(a) the transaction:
(i) is secured by a dwelling that is a mobile home, a
manufactured home, or a trailer; and
(ii) is not also secured by an interest in land; and
(b) the person in whose name the transaction is closed, as
described in section 301(34)(a) of this chapter, sells the
dwelling to the debtor through a retail installment contract or
other similar transaction.
(15) A bona fide nonprofit organization not operating in a
commercial context, as determined by the director, if the
following criteria are satisfied:
(a) Subject to clause (b), the organization originates only one
(1) or both of the following types of mortgage transactions:
(i) Zero (0) interest first lien mortgage transactions.
(ii) Zero (0) interest subordinate lien mortgage transactions.
(b) The organization does not require, under the terms of the
mortgage or otherwise, balloon payments with respect to the
mortgage transactions described in clause (a).
(c) The organization is exempt from federal income taxation
under Section 501(c)(3) of the Internal Revenue Code.
(d) The organization's primary purpose is to serve the public by
helping low income individuals and families build, repair, and
purchase housing.
(e) The organization uses only:
(i) unpaid volunteers; or
(ii) employees whose compensation is not based on the
number or size of any mortgage transactions that the
employees originate;
to originate the mortgage transactions described in clause (a).
(f) The organization does not charge loan origination fees in
connection with the mortgage transactions described in clause
(a).
(16) A bona fide nonprofit organization (as defined in section
301(37) of this chapter) if the following criteria are satisfied:
(a) For each calendar year that the organization seeks the
exemption provided by this subdivision, the organization
certifies, not later than December 31 of the preceding calendar
year and on a form prescribed by the director and accompanied
by such documentation as required by the director, that the
organization is a bona fide nonprofit organization (as defined in
section 301(37) of this chapter).
(b) The director determines that the organization originates only
mortgage transactions that are favorable to the debtor. For
purposes of this clause, a mortgage transaction is favorable to
the debtor if the director determines that the terms of the
mortgage transaction are consistent with terms of mortgage
transactions made in a public or charitable context, rather than
in a commercial context.