§ 24-9-3-2 — Subsidized low rate loans

Indiana § 24-9-3-2

• Jurisdiction: Indiana
• Art. 9: HOME LOAN PRACTICES
• Ch. 3: Prohibited Lending Practices Generally

Text

(a) A creditor may not knowingly or
intentionally replace or consolidate a zero (0) interest rate or other
subsidized low rate loan made by a governmental or nonprofit lender
with a high cost home loan within the first ten (10) years of the
subsidized low rate loan unless the current holder of the loan consents
in writing to the refinancing.
(b) For purposes of this section, a "subsidized low rate loan" is a
loan that carries a current interest rate of at least two (2) percentage
points below the current yield on treasury securities with a comparable
maturity. If the loan's current interest rate is either a discounted
introductory rate or a rate that automatically steps up over time, the
fully indexed rate or the fully stepped up rate, as appropriate, should be
used instead of the current rate to determine whether a loan is a
subsidized low rate loan.
(c) Each mortgage or deed of trust securing a zero (0) interest rate
or other subsidized low rate loan executed after January 1, 2005, must
prominently display the following on the face of the instrument:
"This instrument secures a zero (0) interest rate or other
subsidized low rate loan subject to IC 24-9-3-2.".
(d) A creditor may reasonably rely on the presence or absence of the
statement described in subsection (c) on the face of an instrument
executed after January 1, 2005, as conclusive proof of the existence or
nonexistence of a zero (0) interest rate or other subsidized low rate
loan.

Legislative History

As added by P.L.73-2004, SEC.33.