Guest blog by Amber R. Van Til, IBA Executive Vice President
The 2016 Indiana General Assembly came to a close early this year, concluding all proceedings late in the evening last Thursday, well ahead of the March 14 deadline. It was an excellent year for Indiana banking, and your Indiana Bankers Association Government Relations Team will be sharing a detailed analysis of banking-related bills in coming weeks. However two bills ‒ SB 183 and SB 372 ‒ were particularly impactful in addressing delicate foreclosure issues.
SB 183, Real Property Offenses (formerly known as the Foreclosure Mischief bill), brings to fruition legislation that the IBA has been interested in seeing enacted for the past several years. Essentially the bill provides that a person who knowingly or intentionally damages, permanently removes an object from, or defaces residential or commercial property that is the subject of a foreclosure action commits a Class B misdemeanor. The penalty increases to a Class A misdemeanor if the damage caused is between $750 and $50,000, and to a Level 6 felony if the damage caused is $50,000 or more. A defense is established through this bill if the damage, removal or defacement was the result of repair, renovation, replacement or maintenance performed in good faith. Additionally SB 183 includes language that better enables law enforcement to remove squatters from vacant and abandoned properties. This legislation passed unanimously in both the Indiana House and Senate. It now awaits signature from the governor and is to be effective July 1.
SB 372, Deficiency Judgments and Foreclosed Property, addresses the fix on deficiency judgments related to the TRID* form. Specifically SB 372 provides that the following statutes are not intended to provide the owner of real estate subject to the issuance of process under a judgment or decree of foreclosure any protection or defense against a deficiency judgment for purposes of the borrower protections from liability that must be disclosed on a specified form required by amendments to a federal rule concerning mortgage disclosures: (1) the statutes governing the payoff of, and short sales involving: (a) first-lien mortgage transactions, and (b) consumer credit sales and consumer loans under the Uniform Consumer Credit Code; and (2) the statute allowing the owner of real estate subject to the issuance of process under a judgment or decree of foreclosure to waive, with the consent of the judgment holder, the time limitations that would otherwise apply to the issuance of process with respect to the judgment or decree of foreclosure. This bill passed unanimously in the Indiana Senate and received near-unanimous support in the House. The bill awaits signature from the governor and will be effective upon passage.
The IBA extends special thanks to Sen. Rodric Bray, Martinsville, for carrying both bills as Senate sponsor, and to Rep. John Price, Greenwood, and Rep. Thomas Washburne, Evansville, who served as House sponsors of SB 183 and SB 372, respectively. Additionally we thank the full legislative body of the Indiana General Assembly for overwhelming support of these important pieces of legislation.
*TILA-RESPA Integrated Disclosure