Sec. 7.1. (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.

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Terms Used In Indiana Code 28-1-13-7.1

  • Amortization: Paying off a loan by regular installments.
  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC
  • Year: means a calendar year, unless otherwise expressed. See Indiana Code 1-1-4-5
     (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.

As added by P.L.33-1991, SEC.16. Amended by P.L.42-1993, SEC.30; P.L.45-1995, SEC.20; P.L.93-2024, SEC.201.

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