23 Hoosier Banker June 2015 HB 1421 – Mortgage Foreclosure Rep. Mike Speedy, R-Indianapolis Bill summary: Provides that, at any time after a judgment and decree of sale is entered in an action to foreclose a mortgage on an interest in real property, a purchaser or an omitted lienholder may bring a civil action to: (1) determine the extent of the omitted lienholder’s interest; (2) determine the amount of the proceeds from the judicial sale to which the omitted lienholder may have been titled; (3) determine the liability and the extent of liability due to negligent misrepresentation, professional malpractice, or negligence on the part of a participant in the foreclosure action who, in the course of the participant’s business, profession or employment, supplied false information for the guidance of the parties to the transaction or failed to exercise reasonable care or competence in obtaining or communicating the information; and (4) terminate the interest of an omitted lienholder in the property subject to the sale. Outcome: The bill did not receive a hearing. HB 1473 – Nonprofit Facilitators of Lending Circle Loans Rep. Terri Jo Austin, D-Anderson Bill summary: Provides that after Dec. 31, 2015, an eligible nonprofit organization may apply to the Department of Financial Institutions (DFI) for a certificate of registration to facilitate the making of zero-interest, low-cost lending circle loans to eligible individuals who participate in lending circles in Indiana. Defines a “lending circle” as a group of individuals that is voluntarily organized for the purpose of: (1) generating a source of funds by: pooling or collecting contributions from individual group members; or obtaining funds from other sources, including from lending circle loans; and (2) disbursing the funds to individual group members for personal, family or household purposes. Sets forth requirements for: (1) obtaining a certificate of registration from the DFI; and (2) maintaining a surety bond in connection with a certificate. It sets forth certain: (1) prohibited actions; and (2) requirements; in connection with facilitating the making of a lending circle loan. Provides that an eligible nonprofit organization may charge only: (1) an administrative fee; and (2) an insufficient funds fee; in connection with facilitating the making of a lending circle loan. Allows a registered eligible nonprofit organization to cooperate with: (1) other registered eligible nonprofit organizations; and (2) nonregistered partnering organizations; in facilitating the making of a lending circle loan. Provides that the director of the DFI may adopt rules, policies or guidance concerning facilitating the making of lending circle loans in Indiana. Specifies that an eligible nonprofit organization is not a loan broker for purposes of the statute. Outcome: The bill did not receive a hearing. HB 1573 – Abandoned Structure Liens Rep. Vernon Smith, D-Gary Bill summary: Provides that a person who repairs, cleans up or maintains a neighboring abandoned structure is entitled to a lien on the property, not to exceed the lesser of: (1) the fair market value of the work performed; or (2) $10,000. Provides that any of the following may repair, clean up or maintain an abandoned structure (and may assert, file and enforce a lien) on behalf of one or more property owners whose property bears the specified geographic proximity to an abandoned structure: (1) neighborhood association, (2) homeowners association, or (3) community organization. Establishes a procedure for creating, filing and enforcing the lien, and it specifies that the lien expires, if not enforced within one year after the statement and notice of intention to hold a lien is recorded with the county recorder. Outcome: The bill did not receive a hearing. HB 1588 – Mortgage Foreclosures Rep. Philip GiaQuinta, D-Ft. Wayne Bill summary: Amends the statute governing the foreclosure of mortgaged real estate to permit an enforcement authority that has issued an abatement order with respect to foreclosed property to file a praecipe for a sheriff’s sale of the property if a person files a praecipe for sale, cancels the sale, and a sale does not take place within 180 days after the latter of: (1) the filing of the judgment and decree; or (2) the elapse of three months after the date the complaint was filed. Outcome: The bill did not receive a hearing. SB 56 – Legacy Trusts Sen. Brent Steele, R-Bedford Bill summary: Provides that a protective provision in a legacy trust prevents a creditor of the settlor from satisfying a claim from the settlor’s interest in the trust estate, when the settlor is also a beneficiary of the trust. Authorizes the establishment of legacy trusts. Prescribes the procedures for establishing a legacy trust. Bars most claims against a legacy trust. Permits claims against a legacy trust for certain fraudulent transfers, to enforce certain child support orders, and to enforce certain orders for the division of property with respect to a dissolution of marriage or a legal separation. Provides immunity to the trustees and advisers of legacy trusts and the professionals involved in establishing legacy trusts. Provides that the rule against perpetuities does not apply to legacy trusts. Details: This bill originated from the Indiana State Bar Association as a way to make Indiana competitive in the legacy or dynasty trust area. Approximately 15 other states currently allow a similar model. The IBA was opposed to the bill as initially drafted, due to language that pertains to asset protection. The IBA believes the lender should have sufficient notice and time to address any deceptive act by an individual to Continued on page 24.
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