(a)A person who purchases or is otherwise
assigned a high cost home loan is subject to all affirmative claims and
any defenses, except for an affirmative claim or defense pursuant to IC 24-9-3-7, with respect to the high cost home loan that the borrower
could assert against a creditor or broker of the high cost home loan.
However, this section does not apply if the purchaser or assignee
demonstrates by a preponderance of the evidence that a reasonable
person exercising ordinary due diligence could not determine that the
loan was a high cost home loan. A purchaser or an assignee is
presumed to have exercised reasonable due diligence if the purchaser
or assignee:
(1)has in place at the time of the purchase or assignment of the
subject loans, policies that expressly prohibit the purchase or
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(a) A person who purchases or is otherwise
assigned a high cost home loan is subject to all affirmative claims and
any defenses, except for an affirmative claim or defense pursuant to IC 24-9-3-7, with respect to the high cost home loan that the borrower
could assert against a creditor or broker of the high cost home loan.
However, this section does not apply if the purchaser or assignee
demonstrates by a preponderance of the evidence that a reasonable
person exercising ordinary due diligence could not determine that the
loan was a high cost home loan. A purchaser or an assignee is
presumed to have exercised reasonable due diligence if the purchaser
or assignee:
(1) has in place at the time of the purchase or assignment of the
subject loans, policies that expressly prohibit the purchase or
acceptance of the assignment of any high cost home loans;
(2) requires by contract that a seller or an assignor of home loans
to the purchaser or assignee represents and warrants to the
purchaser or assignee that either:
(A) the seller or assignor will not sell or reassign any high cost
home loans to the purchaser or assignee; or
(B) the seller or assignor is a beneficiary of a representation and
warranty from a previous seller or assignor to that effect;
(3) exercises reasonable due diligence:
(A) at the time of purchase or assignment of home loans; or
(B) within a reasonable period after the purchase or assignment
of home loans;
intended by the purchaser or assignee to prevent the purchaser or
assignee from purchasing or taking assignment of any high cost
home loans; or
(4) satisfies the requirements of subdivisions (1) and (2) and
establishes that a reasonable person exercising ordinary due
diligence could not determine that the loan was a high cost home
loan based on the:
(A) documentation required by the federal Truth in Lending Act
(15 U.S.C. 1601 et seq.); and
(B) itemization of the amount financed and other disbursement
disclosures.
(b) A borrower acting only in an individual capacity may assert
against the creditor or any subsequent holder or assignee of a high cost
home loan:
(1) a violation of IC 24-9-4-2 as a defense, claim, or counterclaim,
after:
(A) an action to enjoin foreclosure or to preserve or obtain
possession of the dwelling that secures the loan is initiated;
(B) an action to collect on the loan or foreclose on the collateral
securing the loan is initiated; or
(C) the loan is more than sixty (60) days in default;
within three (3) years after the closing of a home loan;
(2) a violation of this article in connection to the high cost home
loan as a defense, claim, or counterclaim in an original action
within five (5) years after the closing of a high cost home loan;
and
(3) any defense, claim, counterclaim, or action to enjoin
foreclosure or preserve or obtain possession of the home that
secures the loan, including a violation of this article after:
(A) an action to collect on the loan or foreclose on the collateral
securing the loan is initiated;
(B) the debt arising from the loan is accelerated; or
(C) the loan is more than sixty (60) days in default;
at any time during the term of a high cost home loan.
(c) In an action, a claim, or a counterclaim brought under subsection
(b), the borrower may recover only amounts required to reduce or
extinguish the borrower's liability under a home loan plus amounts
required to recover costs, including reasonable attorney's fees.
(d) The provisions of this section are effective notwithstanding any
other provision of law. This section shall not be construed to limit the
substantive rights, remedies, or procedural rights available to a
borrower against any creditor, assignee, or holder under any other law.
The rights conferred on borrowers by subsections (a) and (b) are
independent of each other and do not limit each other.