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Financial Services Law Insights and Observations

Indiana Governor Signs Law Relating to Residential Mortgage Lending Practices

State Issues

On April 30, Indiana Governor Mitch Daniels signed HB 1176, a bill that, among other things, (i) disallows a creditor from contracting for or charging a borrower a prepayment fee or penalty for an adjustable interest rate residential mortgage loan closing after June 30, 2009, (ii) restricts and sets forth penalties regarding “corrupting” or “improperly influencing” real estate appraisers, (iii) requires a new notice to be provided to a prospective borrower no later than three business days after the creditor’s receipt of the borrower’s mortgage loan application, (iv) imposes record requirements for foreclosure consultants, and (v) outlines violations in connection with credit service organizations and mortgage rescue protection fraud. The bill becomes effective July 1, 2009.

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