Bulletin: IN2011005

Dear Associates:

The 2011 Indiana Legislature has enacted House Enrolled Act 1273* expanding the information that closing agents are required to enter into the Indiana Department of Insurance Residential Real Estate Acquisition and Licensee Information & Numbers Database ("RREAL IN database") following the completion of a residential real estate closing.  

The new law expands the investigatory and enforcement powers of the Office of the Attorney General concerning deceptive acts in any real estate transaction not just those financed by mortgage lenders. As of January 1, 2012, closing agents will be required to enter information into the RREAL IN database for cash and lease transactions involving residential dwellings and investment property taxed as residential upon which a dwelling is located. Commercial transactions are not subject to the reporting requirements. Specifically, the new requirements apply to transactions defined in IC 24-9-3-7 (a) and (b) as set forth below. HEA 1528 (effective July 1, 2011) revises the statutory definitions of all home loan and mortgage loan transactions referenced therein to exclude land contracts. As a result, the new reporting requirements do not apply to land contracts.  

IC 24-9-3-7
Mortgage transactions and real estate transactions; prohibited acts; land contracts; written notice of encumbrances

Sec. 7. (a) As used in this section, "mortgage transaction" includes the following: 

(1) A home loan subject to this article.

(2) To the extent allowed under federal law, a loan described in IC 24-9-1-1 that is secured by a mortgage or deed of trust on real estate in Indiana on which there is located or will be located a structure or structures:

(A) designed primarily for occupancy of one (1) to four (4) families; and

(B) that is or will be occupied by a borrower as the borrower's principal dwelling.

(3) A first lien mortgage transaction (as defined in IC 24-4.4-1-301) subject to IC 24-4.4.

(4) A consumer credit sale subject to IC 24-4.5-2 in which a mortgage, deed of trust, or land contract that constitutes a lien is created or retained against land:

(A) that is located in Indiana; and

(B) upon which there is a dwelling that is or will be used by the debtor primarily for personal, family, or household purposes.

(5) A consumer credit loan subject to IC 24-4.5-3 in which a mortgage, deed of trust, or land contract that constitutes a lien is created or retained against land:

(A) that is located in Indiana; and

(B) upon which there is a dwelling that is or will be used by the debtor primarily for personal, family, or household purposes.

(6) A loan in which a mortgage, deed of trust, or land contract that constitutes a lien is created or retained against land:

(A) that is located in Indiana;

(B) upon which there is a dwelling that is not or will not be used by the borrower primarily for personal, family, or household purposes; and

(C) that is classified as residential for property tax purposes. The term includes a loan that is secured by land in Indiana upon which there is a dwelling that is purchased by or through the borrower for investment or other business purposes.

(7) A reverse mortgage transaction that is secured by real estate in Indiana on which there is located a structure that is occupied by a borrower as the borrower's principal dwelling.

(b) As used in this section, "real estate transaction" means the sale or lease of any legal or equitable interest in real estate:

(1) that is located in Indiana;

(2) upon which there is a dwelling; and

(3) that is classified as residential for property tax purposes

Additionally, effective immediately, the fields in the RREAL IN Database have been statutorily expanded to require the entry of the following information:

1) The type of title insurance policy issued in connection with the transaction 

2) The name and license number of the "creditor" financing the loan (rather than mortgagee) 

3) The name and registration number of any appraisal management company that performs appraisal management services in connection with the transaction. This information is to be provided to the closing agent by the creditor. 

4) In the case of a residential purchase transaction, the purchase price of the subject property, the loan amount of any mortgage, and the name of the buyer. Closing agent shall determine this information from the HUD-1 or any contract or document executed by the parties. 

5) In the case of a residential refinance transaction, the name of the borrower and the loan amount of the refinance. This information is to be provided to the closing agent by the creditor. 

For more information including training on how to enter information in the RREAL IN database, go to the following DOI link: http://www.in.gov/apps/in_rreal/Login.aspx.  

*Revisions are to Indiana Code 27-7-3-15.5 

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