Indiana § 28-1-13-7.1 State chartered banks; real estate loans

Indiana Statutes

§ 28-1-13-7.1 — State chartered banks; real estate loans

Indiana § 28-1-13-7.1

Art. 1DEPARTMENT OF FINANCIAL INSTITUTIONS

Ch. 13Loans and Investments of Banks and Trust Companies

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Bluebook

Ind. Code § 28-1-13-7.1 (2026).

Text

1.

(a)As used in this section, "federally chartered bank" means a bank that was incorporated under 12 U.S.C. 21 et seq. and is doing business in Indiana.

(b)As used in this section, "rollover mortgage" means a loan that:

(1)is secured by a first mortgage on real estate improved by:

(A)a dwelling for one (1) to four (4) families; or

(B)a combination home and business building; and

(2)may be subject to rate adjustments at regularly scheduled times.

(c)As used in this section, "state chartered bank" means a bank that was incorporated under the laws of Indiana and is doing business in Indiana. The term includes a savings bank organized under the laws of Indiana.

(d)A state chartered bank may make, arrange, purchase, or sell loans or extensions of credit secured by liens or interests in

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1. (a) As used in this section, "federally
chartered bank" means a bank that was incorporated under 12 U.S.C.
21 et seq. and is doing business in Indiana.
(b) As used in this section, "rollover mortgage" means a loan that:
(1) is secured by a first mortgage on real estate improved by:
(A) a dwelling for one (1) to four (4) families; or
(B) a combination home and business building; and
(2) may be subject to rate adjustments at regularly scheduled
times.
(c) As used in this section, "state chartered bank" means a bank that
was incorporated under the laws of Indiana and is doing business in
Indiana. The term includes a savings bank organized under the laws of
Indiana.
(d) A state chartered bank may make, arrange, purchase, or sell
loans or extensions of credit secured by liens or interests in real estate
as:
(1) may be so made, arranged, purchased, or sold by a federally
chartered bank under a federal law or regulation; or
(2) prescribed by order of the department or by a rule adopted by
the department under IC 4-22-2.
(e) In addition to loans authorized by subsection (d), a state
chartered bank may make rollover mortgage loans. A rollover mortgage
loan made by a state chartered bank is subject to the following
requirements and restrictions:
(1) At each scheduled adjustment time, if the loan is not then in
default, the lender shall make rate adjustments available for the
amount of the outstanding loan for the remaining term of the loan.
(2) Any adjustment in the loan must be made without
administrative charges to the borrower.
(3) Scheduled adjustments of the loan must be at least one (1)
year apart.
(4) The lender may not charge any penalty or other assessment for
the prepayment of the loan by the borrower at the time of any
adjustment.
(5) At each scheduled adjustment time, the lender and the
borrower may agree to increase or decrease the interest rate
applicable to the outstanding balance of the loan.
(6) At the option of the lender, the borrower may be granted the
option to extend the amortization period for purposes of
calculating monthly payments on the loan in accordance with the
following rules:
(A) The extension of the amortization period may equal up to
one-third (1/3) of the original amortization period, irrespective
of whether this extends the amortization period beyond thirty
(30) years.
(B) To the extent of any extension of the amortization period,
the amortization period will be reduced upon a subsequent
downward adjustment in the interest rate.