Hoosier lawmakers enacted several changes in the Indiana mortgage statutes in response to the current housing crisis the 2009 session of the Indiana General Assembly.  Other changes impacting property owners and land use in Indiana also were made.  Notable new laws:

HEA 1176   Mortgage Reforms

This act makes several changes to the Indiana mortgage statutes and is primarily designed to address predatory home lending practices including: 

• Prepayment fees or penalties are prohibited on adjustable rate first lien mortgages are prohibited on home loans closing after June 30, 2009.  
• Requires notice to borrowers within 3 days of making application for a home mortgage loan of the contact information for Homeowner Protection Unit of the Indiana Attorney General's office and including a statement that borrowers have a right to inspect HUD-1 settlement statements the business day before closing.
• Requires reporting of complaints, disciplinary actions, and reports received by the Homeowner Protection Unit to the Legislative Services Agency Mortgage Lending & Fraud Prevention Task Force and establishes civil penalties for violations of home mortgage statutes.
• Prohibits certain home mortgage sales tactics such as saying that the mortgage has the approval of a person when it does not or that the real estate has improvements when the person making the statements knows or reasonably should know that they are not true.  

SEA 492  Changes in Indiana Foreclosure Notice Procedure

In foreclosures filed after June 30, 2009, creditors must send a pre-suit notice to the debtor 30 days before the action is filed on a form prescribed by the Housing and Community Development Authority informing the debtor of the default; encouraging the debtor to obtain assistance form a mortgage foreclosure counselor; and providing contact information for the Indiana Foreclosure Prevention Network.

HEA 1358  Abandoned Structures

• Adds restrictions on the ability of owners of abandoned or vacant structure to purchase the property at a tax sale. 
• Establishes penalties for failing to vacate structures that have been designated as abandoned.   

HEA 1071  Limits HOA Authority

Homeowners Associations are prohibited from incurring more than $5,000 indebtedness or liability on behalf of the HOA without the approval of a majority of the HOA members.