§ 28-15-11-14 — Regulation of adjustable mortgage loans

Indiana § 28-15-11-14

• Jurisdiction: Indiana
• Art. 15: SAVINGS ASSOCIATIONS
• Ch. 11: Alternative Mortgage Loans of Savings Associations

Text

Adjustable mortgage loans are subject to
the following:
(1) Adjustments to the principal loan balance are permissible only
if:
(A) the initial payment amount is sufficient to fully amortize the
loan at the beginning of the loan term; and
(B) the payment amount is adjusted at least every five (5) years
to amortize the loan at the current interest rate and principal
loan balance over the remaining term of the loan.
(2) Prepayment in full or in part shall be allowed without penalty.
(3) Adjustments to the interest rate must correspond directly to
the movement of the money cost index, subject to such
rate-adjustment limitations, if any, as a savings association may
provide. For the purposes of this subdivision:
(A) the initial money cost index value is the value of the money
cost index most recently available within six (6) months before
the date of the closing of the loan; and
(B) the interest rate at adjustment shall reflect the difference, in
reference to the interest rate of the loan on the date of closing,
between the initial money cost index value and either:
(i) the money cost index value most recently available as of
the date of rate adjustment, if the payment is not
simultaneously adjusted; or
(ii) the money cost index value most recently available as of
the date of notification of a payment adjustment.
However, when the movement of the money cost index permits an
interest rate increase, the savings association may decline to
increase the interest rate by the indicated amount. The savings
association may decrease the interest rate at any time.
(4) The borrower may not be charged any costs or fees in
connection with regularly scheduled adjustments to:
(A) the interest rate;
(B) the payment;
(C) the outstanding principal loan balance; or
(D) the loan term.

Legislative History

As added by P.L.193-1997, SEC.2.