The following additional limitations and
prohibited practices apply to a high cost home loan:
(1)A creditor making a high cost home loan may not directly or
indirectly finance any points and fees.
(2)This subdivision does not apply to a high cost home loan
described in IC 24-9-3-6(b). Prepayment fees or penalties may not
be included in the loan documents for a high cost home loan or
charged to the borrower if the fees or penalties exceed in total two
percent (2%) of the high cost home loan amount prepaid during
the first twenty-four (24) months after the high cost home loan
closing.
(3)This subdivision does not apply to a high cost home loan
described in IC 24-9-3-6(b). A prepayment penalty may not be
contracted for after the second year following the high cost home
loan closing.
Free access — add to your briefcase to read the full text and ask questions with AI
The following additional limitations and
prohibited practices apply to a high cost home loan:
(1) A creditor making a high cost home loan may not directly or
indirectly finance any points and fees.
(2) This subdivision does not apply to a high cost home loan
described in IC 24-9-3-6(b). Prepayment fees or penalties may not
be included in the loan documents for a high cost home loan or
charged to the borrower if the fees or penalties exceed in total two
percent (2%) of the high cost home loan amount prepaid during
the first twenty-four (24) months after the high cost home loan
closing.
(3) This subdivision does not apply to a high cost home loan
described in IC 24-9-3-6(b). A prepayment penalty may not be
contracted for after the second year following the high cost home
loan closing.
(4) This subdivision does not apply to a high cost home loan
described in IC 24-9-3-6(b). A creditor may not include a
prepayment penalty fee in a high cost home loan unless the
creditor offers the borrower the option of choosing a loan product
without a prepayment fee. The terms of the offer must be made in
writing and must be initialed by the borrower. The document
containing the offer must be clearly labeled in large bold type and
must include the following disclosure:
"LOAN PRODUCT CHOICE
I was provided with an offer to accept a product both with and
without a prepayment penalty provision. I have chosen to
accept the product with a prepayment penalty.".
(5) A creditor shall not sell or otherwise assign a high cost home
loan without furnishing the following statement to the purchaser
or assignee:
"NOTICE: This is a loan subject to special rules under IC 24-9.
Purchasers or assignees may be liable for all claims and
defenses with respect to the loan that the borrower could assert
against the lender.".
(6) A mortgage or deed of trust that secures a high cost home loan
at the time the mortgage or deed of trust is recorded must
prominently display the following on the face of the instrument:
"This instrument secures a high cost home loan as defined in IC 24-9-2-8.".
(7) A creditor making a high cost home loan may not finance,
directly or indirectly, any life or health insurance.