Sec. 18. (a) Subsections (b) and (c) apply to alternative mortgage loans and to similar loans authorized under federal law or regulations for a federal savings association.
(b) Any Indiana laws prohibiting:
(1) the compounding of interest;
(2) capitalizing interest because contracted loan repayments create negative amortization; or
(3) paying interest on interest;
do not apply. For purposes of the application of IC 24-4.5-3 to a loan described in subsection (a), "principal" (as defined in IC 24-4.5-3-107(3)) includes interest unpaid and added to principal because the contracted repayments under the loan do not cover the entire interest due at any time.
(c) The lien of the loan provided by the mortgage and the loan documents:
(1) includes all advances or additions to principal of either principal or interest that are made in accordance with the terms of the loan documents; and
(2) is superior to any lien on the property created after the date the mortgage securing the loan is recorded, other than taxes and special property or taxing district assessments.
As added by P.L.193-1997, SEC.2. Amended by P.L.27-2012, SEC.116.
Structure Indiana Code
Title 28. Financial Institutions
Article 15. Savings Associations
Chapter 11. Alternative Mortgage Loans of Savings Associations
28-15-11-1. "Adjustable Mortgage Loan"
28-15-11-2. "Alternative Mortgage Loan"
28-15-11-4. "Federal Savings Association"
28-15-11-5. "Graduated Payment Mortgage Loan"
28-15-11-7. "Money Cost Index"
28-15-11-9. "Reverse Annuity Mortgage Loan" or "Ram Loan"
28-15-11-10. "Rollover Mortgage"
28-15-11-11. "Standard Mortgage Loan"
28-15-11-12. Regulation of Graduated Payment Mortgage Loans
28-15-11-14. Regulation of Adjustable Mortgage Loans
28-15-11-15. Restrictions on Graduated Payment Adjustable Mortgage Loans
28-15-11-16. Regulation of Rollover Mortgage Loans
28-15-11-17. Alternative Mortgage Loans; Required Disclosures
28-15-11-18. Inapplicability of Indiana Laws; Interest Added to Principal; Lien Provided by Mortgage