§ 24-4.5-2-209 — Right to prepay without penalty; payoff statement; liability for failure to provide; short sales; foreclosed property; no protection from deficiency judgment

(1) Subject to the provisions on rebate
upon prepayment (section 210 of this chapter), the buyer may prepay
in full the unpaid balance of a consumer credit sale, refinancing, or
consolidation at any time without penalty.
(2) At the time of prepayment of a credit sale not subject to the
provisions of rebate upon prepayment (section 210 of this chapter), the
total credit service charge:
(a) including the prepaid credit service charge; but
(b) subject to section 201(13) of this chapter, excluding the
nonrefundable prepaid finance charge allowed under section
201(11) of this chapter, in the case of a sale agreement entered into
after June 30, 2020;
may not exceed the maximum charge allowed under this chapter for the
period the credit sale was in effect.
(3) The creditor or mortgage servicer shall provide, in writing, an
accurate payoff amount for the consumer credit sale to the debtor
within seven (7) business days (excluding legal public holidays,
Saturdays, and Sundays) after the creditor or mortgage servicer
receives the debtor's written request for the accurate consumer credit
sale payoff amount. A payoff statement provided by a creditor or
mortgage servicer under this subsection must show the date the
statement was prepared and itemize the unpaid principal balance and
each fee, charge, or other sum included within the payoff amount. A
creditor or mortgage servicer who fails to provide the accurate
consumer credit sale payoff amount is liable for:
(A) one hundred dollars ($100) if an accurate consumer credit sale
payoff amount is not provided by the creditor or mortgage servicer
within seven (7) business days (excluding legal public holidays,
Saturdays, and Sundays) after the creditor or mortgage servicer
receives the debtor's first written request; and
(B) the greater of:
(i) one hundred dollars ($100); or
(ii) the credit service charge that accrues on the sale from the
date the creditor or mortgage servicer receives the first written
request until the date on which the accurate consumer credit sale
payoff amount is provided;
if an accurate consumer credit sale payoff amount is not provided
by the creditor or mortgage servicer within seven (7) business days
(excluding legal public holidays, Saturdays, and Sundays) after the
creditor or mortgage servicer receives the debtor's second written
request, and the creditor or mortgage servicer failed to comply with
clause (A).
A liability under this subsection is an excess charge under IC 24-4.5-5-202.
(4) As used in this subsection, "mortgage transaction" means a
consumer credit sale in which a mortgage or a land contract (or another
consensual security interest equivalent to a mortgage or a land contract)
that constitutes a lien is created or retained against land upon which
there is constructed or intended to be constructed a dwelling that is or
will be used by the debtor primarily for personal, family, or household
purposes. This subsection applies to a mortgage transaction with
respect to which any installment or minimum payment due is
delinquent for at least sixty (60) days. The creditor, servicer, or the
creditor's agent shall acknowledge a written offer made in connection
with a proposed short sale not later than five (5) business days
(excluding legal public holidays, Saturdays, and Sundays) after the date
of the offer if the offer complies with the requirements for a qualified
written request set forth in 12 U.S.C. 2605(e)(1)(B). The creditor,
servicer, or creditor's agent is required to acknowledge a written offer
made in connection with a proposed short sale from a third party acting
on behalf of the debtor only if the debtor has provided written
authorization for the creditor, servicer, or creditor's agent to do so. Not
later than thirty (30) business days (excluding legal public holidays,
Saturdays, and Sundays) after receipt of an offer under this subsection,
the creditor, servicer, or creditor's agent shall respond to the offer with
an acceptance or a rejection of the offer. The thirty (30) day period
described in this subsection may be extended for not more than fifteen
(15) business days (excluding legal public holidays, Saturdays, and
Sundays) if, before the end of the thirty (30) day period, the creditor,
the servicer, or the creditor's agent notifies the debtor of the extension
and the reason the extension is needed. Payment accepted by a creditor,
servicer, or creditor's agent in connection with a short sale constitutes
payment in full satisfaction of the mortgage transaction unless the
creditor, servicer, or creditor's agent obtains:
(a) the following statement: "The debtor remains liable for any
amount still owed under the mortgage transaction."; or
(b) a statement substantially similar to the statement set forth in
subdivision (a);
acknowledged by the initials or signature of the debtor, on or before the
date on which the short sale payment is accepted. As used in this
subsection, "short sale" means a transaction in which the property that
is the subject of a mortgage transaction is sold for an amount that is
less than the amount of the debtor's outstanding obligation under the
mortgage transaction. A creditor or mortgage servicer that fails to
respond to an offer within the time prescribed by this subsection is
liable in accordance with 12 U.S.C. 2605(f) in any action brought
under that section.
(5) This section is not intended to provide the owner of real estate
subject to the issuance of process under a judgment or decree of
foreclosure any protection or defense against a deficiency judgment for
purposes of the borrower protections from liability that must be
disclosed under 12 CFR 1026.38(p)(3) on the form required by 12 CFR
1026.38 ("Closing Disclosures" form under the Amendments to the
2013 Integrated Mortgage Disclosures Rule Under the Real Estate
Settlement Procedures Act (Regulation X) and the Truth In Lending
Act (Regulation Z) and the 2013 Loan Originator Rule Under the Truth
in Lending Act (Regulation Z)).
Formerly: Acts 1971, P.L.366, SEC.3. As amended by
P.L.23-2000, SEC.5; P.L.63-2001, SEC.2 and P.L.134-2001, SEC.2;
P.L.145-2008, SEC.24; P.L.35-2010, SEC.44; P.L.89-2011, SEC.15;
P.L.27-2012, SEC.16; P.L.54-2016, SEC.2; P.L.73-2016, SEC.8;
P.L.85-2020, SEC.7.