IBJNews

Indiana Legislature approves mortgage certification program

Back to TopCommentsE-mailPrintBookmark and Share
On The Beat Industry News In Brief

Brace yourself for a marketing blitz from banks touting the strength of their mortgages. In its last week, the General Assembly approved legislation allowing the Indiana Department of Financial Institutions to offer a five-star mortgage certification program.

The new program was originally proposed by State Rep. Ed DeLaney, D-Indianapolis, in a bill the Indiana House of Representatives unanimously approved. It then stalled in the Senate’s Committee on Insurance and Financial Institutions.

Late in the legislative process, the five-star mortgage idea was added to House Bill 1336, which overhauls the state’s $308 million Public Deposit Insurance Fund for the first time since 1937, as IBJ reported last week. Both the House and Senate approved HB 1336 in conference committee. It now awaits Gov. Mitch Daniels’ endorsement. He is expected to sign off.

“This will serve as an educational tool, letting first-time homebuyers know the risks of borrowing to buy a home and how they might avoid them,” DeLaney said in a statement.

Starting June 30, banks and mortgage brokers will be able to advertise their mortgages as five-star state-certified if they join the voluntary IDFI program and adhere to its requirements for mortgage terms, including:

• 10-percent down payments or, in the case of a refinancing, 10-percent equity

• a fixed interest rate

• provision of escrow accounts for payment of taxes and insurance

• terms that don’t exceed 30 years

• no prepayment penalty or fee.

Under the new law, banks that offer five-star mortgages must give any would-be borrowers they reject written statements of the reasons they don’t qualify. According to the bill’s fiscal impact statement, Indiana’s Legislative Services Agency expects the program to generate new revenue for the state via certification fees for banks involved in the program and civil penalties IDFI can levy against lenders who violate its terms.
 

ADVERTISEMENT

  • The 2 Mortgage Guys
    It keeps getting tougher and tougher. The good news is, most of the bad lenders got out of the industry because the testing wasn't easy and took quite a bit of time and studying. The mortgage menu has shrunken significantly and it's much harder to get files through underwriting guidelines so hopefully the world will have a lot less crooks in it. At least, in the mortgage industry that is!

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. The $104K to CRC would go toward debts service on $486M of existing debt they already have from other things outside this project. Keystone buys the bonds for 3.8M from CRC, and CRC in turn pays for the parking and site work, and some time later CRC buys them back (with interest) from the projected annual property tax revenue from the entire TIF district (est. $415K / yr. from just this property, plus more from all the other property in the TIF district), which in theory would be about a 10-year term, give-or-take. CRC is basically betting on the future, that property values will increase, driving up the tax revenue to the limit of the annual increase cap on commercial property (I think that's 3%). It should be noted that Keystone can't print money (unlike the Federal Treasury) so commercial property tax can only come from consumers, in this case the apartment renters and consumers of the goods and services offered by the ground floor retailers, and employees in the form of lower non-mandatory compensation items, such as bonuses, benefits, 401K match, etc.

  2. $3B would hurt Lilly's bottom line if there were no insurance or Indemnity Agreement, but there is no way that large an award will be upheld on appeal. What's surprising is that the trial judge refused to reduce it. She must have thought there was evidence of a flagrant, unconscionable coverup and wanted to send a message.

  3. As a self-employed individual, I always saw outrageous price increases every year in a health insurance plan with preexisting condition costs -- something most employed groups never had to worry about. With spouse, I saw ALL Indiana "free market answer" plans' premiums raise 25%-45% each year.

  4. It's not who you chose to build it's how they build it. Architects and engineers decide how and what to use to build. builders just do the work. Architects & engineers still think the tarp over the escalators out at airport will hold for third time when it snows, ice storms.

  5. http://www.abcactionnews.com/news/duke-energy-customers-angry-about-money-for-nothing

ADVERTISEMENT