22 Hoosier Banker August 2014 COMPLIANCE CONNECTION Question: What is a “refinancing transaction” for purposes of the Residential Real Estate Acquisition of Licensee Information and Numbers Database (RREAL IN)? Answer: First, some background and context: RREAL IN is a database used for “the reporting, collection and storage of information concerning resident or non-resident entities or licensees that have participated in or assisted with transactions involving residential property located in the state of Indiana.”1 The Indiana Department of Insurance (the “Department”) regulates RREAL IN, as mandated by Indiana Code Section 27-7-3-15.5. The Code requires the Department to establish and maintain an electronic system for the collection and storage of information concerning mortgage transactions and other real estate transactions closed by a closing agent. Mortgage and real estate transactions include first-lien purchase money mortgages, refinance transactions, cash transactions, land contracts, reverse mortgages, home equity transactions, subordinate mortgages and business loans secured by residential property.2 Indiana financial institutions are subject to Indiana Code Section 27-73-15.5 and must report mortgage and real estate transaction information through RREAL IN to the extent that the financial institutions serve as a closing agent for a mortgage or real estate transaction. A “closing agent” is any person who closes a singlefamily residential first-lien purchase money mortgage transaction or refinancing transaction.3 In practice, the term “refinancing transaction” has been interpreted broadly and has been applied to the refinancing of a loan, which results in a first lien on residential real estate located in the state of Indiana. This potentially includes a refinance of a first-lien purchase money mortgage, cash transaction, land contract, reverse mortgage, home equity transaction, subordinate mortgage and business loan secured by residential property. Because a failure to comply with the reporting requirements may result in administrative fines, it is recommended that banks seek the assistance of counsel or the Indiana Department of Insurance for questions regarding whether a particular transaction is subject to reporting. t This information is provided for general education purposes and is not intended to be legal advice. Please consult legal counsel for specific guidance as to how this information applies to your institution’s circumstances or situation. 1Indiana Department of Insurance, Welcome RREAL IN, IN.gov, http://in.gov/idoi/in_rreal/Login.aspx (last visited July 22, 2014). 2 Id.; Ind. Code § 24-9-3-7(a)-(b). 3 Ind. Code § 6-1.1-12-43(a)(4) defines transaction as “a single family residential: (A) first lien purchase money mortgage transaction; or (B) refinancing transaction.” aBout ComplianCe ConneCtion In order to address compliance inquiries from members, IBA provides Compliance Connection, an assistance program offering advice on Indiana-specific compliance questions. If the matter requires legal advice, IBA Compliance Connection will refer the bank to a law firm. The material in this issue was prepared by Larry C. Tomlin, partner with Krieg DeVault LLP, Indianapolis, and IBA compliance consultant. Submit Compliance Connection questions to IBA’s Amber R. Van Til at avantil@indianabankers.org. For more information, contact: Bobbie Baker (866) 776-6426, x3374 bbaker@promnetwork.com Visit us at the IBA Mega Conference, booth 107 Bank Assetpoint is operated by Assetpoint Services, LLC, a wholly owned subsidiary of Promontory Interfinancial Network, LLC. Use of the Bank Assetpoint service is subject to the terms and conditions in the Bank Assetpoint agreements, including the Bank Assetpoint Participant Agreement. Bank Assets All in One Place LOANS LOAN PARTICIPATIONS NEW ORIGINATIONS The only nationwide marketplace dedicated to a variety of bank assets • 1,200+ banks • 5,000+ marketplace participants • $550,000,000+ in new loan originations and commitments BankAssetpoint.com
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