Citations Affected: IC 4-6; IC 24-9; IC 34-7-4-2; IC 36-2-7-10.
Synopsis: Deceptive mortgage practices. Prohibits deceptive acts
committed in respect to mortgage transactions. Establishes the
deceptive mortgage practices unit under the attorney general. Provides
penalties and enforcement procedures for deceptive mortgage acts.
Appropriates $150,000 to the legislative council to contract for a study
of mortgage foreclosure in Indiana.
Effective: Upon passage; July 1, 2004.
January 12, 2004, read first time and referred to Committee on Rules and Legislative
Procedure.
A BILL FOR AN ACT to amend the Indiana Code concerning trade
regulations, consumer sales and credit and to make an appropriation.
SECTION 1. IC 4-6-3-3, AS AMENDED BY P.L.2-2002,
SECTION 24, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2004]: Sec. 3. If the attorney general has reasonable cause to
believe that a person may be in possession, custody, or control of
documentary material, or may have knowledge of a fact that is relevant
to an investigation conducted to determine if a person is or has been
engaged in a violation of IC 4-6-9, IC 4-6-10, IC 13-14-10,
IC 13-14-12, IC 13-24-2, IC 13-30-4, IC 13-30-5, IC 13-30-6,
IC 13-30-8, IC 23-7-8, IC 24-1-2, IC 24-5-0.5, IC 24-5-7, IC 24-5-8,
IC 24-9, IC 25-1-7, IC 32-34-1, or any other statute enforced by the
attorney general, only the attorney general may issue in writing, and
cause to be served upon the person or the person's representative or
agent, an investigative demand that requires that the person served do
any combination of the following:
(1) Produce the documentary material for inspection and copying
or reproduction.
(2) Answer under oath and in writing written interrogatories.
not limit the jurisdiction of an entity described in section 4 of this
chapter.
Sec. 7. The attorney general and an investigator of the unit may
do any of the following when conducting an investigation under
section 3 of this chapter:
(1) Issue and serve a subpoena for the production of records,
including records stored in electronic data processing systems,
for inspection by the attorney general or the investigator.
(2) Issue and serve a subpoena for the appearance of any
person to provide testimony under oath.
(3) Apply to a court with jurisdiction to enforce a subpoena
described in subdivision (1) or (2).
Sec. 8. (a) The deceptive mortgage practices unit account within
the state general fund is established for the purpose of supporting
the operations of the unit. The account is administered by the
attorney general.
(b) The account consists of fees collected under IC 24-9-3.
(c) The expenses of administering the account shall be paid from
money in the account.
(d) The treasurer of state shall invest the money in the account
not currently needed to meet the obligations of the account in the
same manner as other public money may be invested.
(e) Interest earned on investments under subsection (d) shall be
credited to the account when received.
(f) Money in the account at the end of a state fiscal year does not
revert to the state general fund. However, if the amount of money
in the account at the end of a particular state fiscal year exceeds
one hundred fifty thousand dollars ($150,000), the treasurer of
state shall transfer the excess from the account into the state
general fund.
(g) There is annually appropriated to the attorney general from
the deceptive mortgage practices unit account money sufficient for
carrying out the purposes of this chapter and IC 24-9.
SECTION 3. IC 24-9 IS ADDED TO THE INDIANA CODE AS A
NEW ARTICLE TO READ AS FOLLOWS [EFFECTIVE JULY 1,
2004]:
ARTICLE 9. MORTGAGE LOANS
Chapter 1. Prohibited Practices, Liability
Sec. 1. A person may not knowingly and intentionally make,
propose, or solicit deceptive, fraudulent, false, or misleading
statements on any mortgage document or any document related to
a mortgage, including a mortgage application, real estate
appraisal, real estate settlement, or closing document.
Sec. 2. For purposes of this chapter, "deceptive, fraudulent,
false, or misleading statements" does not include mathematical
errors, inadvertent transposition of numbers, typographical errors,
or other bona fide error.
Sec. 3. (a) A person who violates this article is liable to a person
harmed by the violation for the following:
(1) Actual damages, including consequential damages.
(2) Costs and reasonable attorney's fees.
(b) A person may commence an action under this section within
five (5) years after the person:
(1) knows; or
(2) by the exercise of reasonable diligence, should have
known;
of the violation of this article.
(c) A person may be granted injunctive, declaratory, and other
equitable relief as the court determines appropriate in an action to
enforce compliance with this chapter.
(d) An award of actual damages under subsection (a)(1) has
priority over a civil penalty imposed under this article.
Chapter 2. Penalties and Enforcement
Sec. 1. A person who knowingly or intentionally violates this
article commits an act that is actionable by the attorney general
under IC 24-5-0.5 and is subject to the penalties listed in
IC 24-5-0.5.
Sec. 2. (a) The attorney general and the deceptive mortgage
practices unit established under IC 4-6-12 shall enforce this article
within five (5) years after a violation.
(b) The attorney general may refer a matter under this chapter
to a prosecuting attorney for enforcement.
Sec. 3. (a) The attorney general may bring an action to enjoin a
violation of this article. A court in which the action is brought may:
(1) issue an injunction;
(2) order a person to pay actual damages;
(3) void or limit the application of obligations that violate this
article;
(4) order a person to reimburse the state for reasonable costs
of the attorney general's investigation and prosecution of the
violation of this article; and
(5) impose a civil penalty of not more than two thousand
dollars ($2,000) per violation.
(b) A person who violates an injunction under this section is
subject to a civil penalty of not more that fifteen thousand dollars
($15,000) per violation.
(c) The court that issues an injunction retains jurisdiction over
a proceeding seeking the imposition of a civil penalty under this
section.
(d) The attorney general, acting in the name of the state, has the
exclusive right to petition for imposition of a civil penalty under
this section.
(e) If a court determines that a person:
(1) has violated an injunction issued under this section; and
(2) must pay a civil penalty;
the court shall require the person to reimburse the state for
reasonable costs related to bringing the action under this section.
Chapter 3. Fees
Sec. 1. The county recorder shall assess a fee of three dollars
($3) under IC 36-2-7-10(b)(11) for each mortgage recorded. The
fee shall be paid to the county treasurer at the end of each calendar
month as provided in IC 36-2-7-10(a).
Sec. 2. The county treasurer shall credit fifty cents ($0.50) of the
fee collected under IC 36-2-7-10(b)(11) for each mortgage recorded
to the county recorder's records perpetuation fund established
under IC 36-2-7-10(c).
Sec. 3. On or before June 20 and December 20 of each year,
after completing an audit of the county treasurer's monthly reports
required by IC 36-2-10-16, the county auditor shall distribute to
the auditor of state two dollars and fifty cents ($2.50) of the
mortgage recording fee collected under IC 36-2-7-10(b)(11) for
each mortgage recorded by the county recorder.
Sec. 4. The auditor of state shall distribute one hundred percent
(100%) of the mortgage recording fee distributed to the auditor of
state to the deceptive mortgage practices unit account established
by IC 4-6-12-8.
SECTION 4. IC 34-7-4-2, AS AMENDED BY P.L.2-2002,
SECTION 90, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2004]: Sec. 2. Statutes outside IC 34 providing causes of
action or procedures include the following:
(1) IC 4-21.5-5 (Judicial review of administrative agency actions).
(2) IC 22-3-4 (Worker's compensation administration and
procedures).
(3) IC 22-4-17 (Unemployment compensation system, employee's
claims for benefits).
(4) IC 22-4-32 (Unemployment compensation system, employer's
appeal process).
(5) IC 22-9 (Civil rights actions).
(6) IC 24-9 (Mortgage loans).
(7) IC 31-14 (Paternity).
(7) (8) IC 31-15 (Dissolution of marriage and legal separation).
(8) (9) IC 31-16 (Support of children and other dependants).
(9) (10) IC 31-17 (Custody and visitation).
(10) (11) IC 31-19 (Adoption).
(11) (12) IC 32-27-2, IC 32-30-1, IC 32-30-2, IC 32-30-2.1,
IC 32-30-2, IC 32-30-4, IC 32-30-9, IC 32-30-10, IC 32-30-12,
IC 32-30-13, and IC 32-30-14 (Real property).
(12) (13) IC 33-1-3 (Attorney liens).
SECTION 5. IC 36-2-7-10, AS AMENDED BY P.L.2-2003,
SECTION 101, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2004]: Sec. 10. (a) The county recorder shall
tax and collect the fees prescribed by this section for recording, filing,
copying, and other services the recorder renders, and shall pay them
into the county treasury at the end of each calendar month. The fees
prescribed and collected under this section supersede all other
recording fees required by law to be charged for services rendered by
the county recorder.
(b) The county recorder shall charge the following:
(1) Six dollars ($6) for the first page and two dollars ($2) for each
additional page of any document the recorder records if the pages
are not larger than eight and one-half (8 1/2) inches by fourteen
(14) inches.
(2) Fifteen dollars ($15) for the first page and five dollars ($5) for
each additional page of any document the recorder records, if the
pages are larger than eight and one-half (8 1/2) inches by fourteen
(14) inches.
(3) For attesting to the release, partial release, or assignment of
any mortgage, judgment, lien, or oil and gas lease contained on a
multiple transaction document, the fee for each transaction after
the first is the amount provided in subdivision (1) plus the amount
provided in subdivision (4) and one dollar ($1) for marginal
mortgage assignments or marginal mortgage releases.
(4) One dollar ($1) for each cross-reference of a recorded
document.
(5) One dollar ($1) per page not larger than eight and one-half (8
1/2) inches by fourteen (14) inches for furnishing copies of
records produced by a photographic process, and two dollars ($2)
per page that is larger than eight and one-half (8 1/2) inches by
fourteen (14) inches.
(6) Five dollars ($5) for acknowledging or certifying to a
document.
(7) Five dollars ($5) for each deed the recorder records, in
addition to other fees for deeds, for the county surveyor's corner
perpetuation fund for use as provided in IC 32-19-4-3 or
IC 36-2-12-11(e).
(8) A fee in an amount authorized under IC 5-14-3-8 for
transmitting a copy of a document by facsimile machine.
(9) A fee in an amount authorized by an ordinance adopted by the
county legislative body for duplicating a computer tape, a
computer disk, an optical disk, microfilm, or similar media. This
fee may not cover making a handwritten copy or a photocopy or
using xerography or a duplicating machine.
(10) A supplemental fee of three dollars ($3) for recording a
document that is paid at the time of recording. The fee under this
subdivision is in addition to other fees provided by law for
recording a document.
(11) Three dollars ($3) for each mortgage on real estate
recorded, in addition to other fees required by this section,
distributed as follows:
(A) Fifty cents ($0.50) is to be deposited in the recorder's
record perpetuation fund.
(B) Two dollars and fifty cents ($2.50) is to be distributed
to the auditor of state on or before June 20 and December
20 of each year as provided in IC 24-9-3-3.
(c) The county treasurer shall establish a recorder's records
perpetuation fund. All revenue received under subsection (b)(5), (b)(8),
(b)(9), and (b)(10), and fifty cents ($0.50) from revenue received
under subsection (b)(11), shall be deposited in this fund. The county
recorder may use any money in this fund without appropriation for the
preservation of records and the improvement of record keeping systems
and equipment.
(d) As used in this section, "record" or "recording" includes the
functions of recording, filing, and filing for record.
(e) The county recorder shall post the fees set forth in subsection (b)
in a prominent place within the county recorder's office where the fee
schedule will be readily accessible to the public.
(f) The county recorder may not tax or collect any fee for:
(1) recording an official bond of a public officer, a deputy, an
appointee, or an employee; or
(2) performing any service under any of the following: