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#284509 - 12/03/04 09:31 PM Closing Agents and Property Tax Deduction Discl
Comply 101 Offline
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Comply 101
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Posts: 708
Is anyone familiar with IC 6-1.1-12-43 that will require by Jan 1 to give borrower at closing a disclosure indicating what Indiana property tax deductions are available to them? It has to be on gold or yellow paper and "closing agents" will be fined $25 for each violation. We don't close most of our loans that are secured by a principal dwelling, but I am wondering about second lien or Heloc loans that we do close at the bank. The code says transactions applicable are first lien purchase money mortgage transactions or refinancing transactions. What if we have a Heloc that is paying off a first. Would this not be considered a refinancing and the disclosure would then be required?
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#284510 - 12/04/04 04:51 PM Re: Closing Agents and Property Tax Deduction Discl
Anonymous
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We already give information to the customer about filing or refiling for exemptions. We list the phone numbers to auditors in our area. We were doing it to help our customers. Did not know it was going to be mandatory. Interesting things that you find on this board.

Thanks

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#284511 - 12/06/04 05:04 PM Re: Closing Agents and Property Tax Deduction Discl
Comply 101 Offline
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Comply 101
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We also have always given a reminder to the borrower about refiling, but this is now required with a very specific form. Any others that could answer my original question?


Thanks!
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#284512 - 12/06/04 05:20 PM Re: Closing Agents and Property Tax Deduction Discl
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
Our local government held a "training" session on this last week and to hand out the forms. I'm still waiting for my mortgage people to send me examples.

If you have not received anything, I would advise contacting your county Assessor, Auditor or Clerk.

The forms were required to be provided to your local governments by 6/1 if I remember correctly.
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#284513 - 12/09/04 04:41 PM Re: Closing Agents and Property Tax Deduction Discl
Anonymous
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For those of you that would like the form. It can be found at: www.in.gov.icpr/webfile/formsdiv/51781.pdf

My take on the question about the HELOC. If the first mortgage is being released therefore the disclosure would be needed.

This is my opinion, not my employers.

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#284514 - 12/09/04 08:35 PM Re: Closing Agents and Property Tax Deduction Discl
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
Anon, thanks for the link but I get a "this web site cannot not be found". Would you please tell us where you found it on the IN site? Thanks.
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#284515 - 12/10/04 09:02 PM Re: Closing Agents and Property Tax Deduction Discl
Anonymous
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Dan and others

Sorry-- I guess that my typing is not what it used to be.Please try this site: www.in.gov/icpr/webfile/formsdiv/51781.pdf
If for some reason that I did not get it again. if you go to the website for the State of Indiana www.in.gov and go to the search engine within the website and ask for "form 51781" it should come up.

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#284516 - 12/10/04 11:39 PM Re: Closing Agents and Property Tax Deduction Discl
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
The new link worked fine. Thank you.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#284517 - 12/13/04 04:56 PM Re: Closing Agents and Property Tax Deduction Discl
Anonymous
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Where can I find a plainly worded summary of when this is required?

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#284518 - 12/13/04 05:14 PM Re: Closing Agents and Property Tax Deduction Discl
Anonymous
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Are most Indiana banks planning on having an acknowledgement signed? How will examiners know that it has been delivered?

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#284519 - 12/13/04 06:32 PM Re: Closing Agents and Property Tax Deduction Discl
Dan Persfull Offline
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Bloomington, IN
The statute is clear that a closing agent (a person who closes a transaction) must provide the form BEFORE closing any applicable loan AFTER 12/31/04.

There is no signatory requirement that I saw.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#284520 - 12/13/04 06:42 PM Re: Closing Agents and Property Tax Deduction Discl
Anonymous
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Dan, will you simply distribute the form and rely on procedures to show compliance?

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#284521 - 12/13/04 07:16 PM Re: Closing Agents and Property Tax Deduction Discl
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
That is the intent. However, we haven't decided yet on the procedures. The closing agent is responsible for this form, therefore the burden falls on the title company, attorney, etc. if it is an outside closing.

What's being tossed around (for us) is:

1. Include the form with our application packets (my preference)
2. Send it with the early disclosures.
3. Give it at closing.

The statute does not appear to put the burden of proof on the bank if an outside closing, but I don't feel comfortable not being able to demonstrate through procedures that we, the lender, are insuring the notice is being given.
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#284522 - 12/13/04 07:31 PM There is an acknowledgment requirement
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
I must apologize - I overlooked the following:

(e) A closing agent to which this section applies shall document its compliance with this section with respect to each transaction in the form of verification of compliance signed by the customer.

(f) A closing agent is subject to a civil penalty of twenty-five dollars ($25) for each instance in which the closing agent fails to comply with this section with respect to a customer.

So, there will have to be some sort of acknowledgment whether it be having them sign the form, or sign a separate form acknowledging they have received all federal and state disclosures with those disclosures listed on the acknowledgment form.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#284523 - 12/13/04 09:14 PM Re: There is an acknowledgment requirement
Anonymous
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Thanks Dan--I didn't see that in there either.

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#284524 - 12/15/04 08:27 PM Re: There is an acknowledgment requirement
Comply 101 Offline
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Comply 101
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I would caution those banks like our own that have title companies close their first mortgage loans, but may, in some cases, close a loan in their bank which would fall under the definition of a refinancing. If you have a consumer loan that closes at the bank and it fits the definition of refinance as stated in Reg Z, the borrower would need this disclosure. I received this guidance from the DFI via Mark Tarpey. They also state while there is nothing in the code that says we have to have proof of compliance when a title company closed a loan, they highly suggested we have some form of proof.
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#284525 - 12/20/04 04:38 PM Re: Closing Agents and Property Tax Deduction Discl
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
Quote:

Where can I find a plainly worded summary of when this is required?




You're talking IN Code - there is no commentary (plain text). However, the code says:

(b) Before closing a transaction after December 31, 2004, a closing agent must provide to the customer the form referred to in subsection (c).

Quote:

Are most Indiana banks planning on having an acknowledgement signed? How will examiners know that it has been delivered?





Yes we will add signature lines. The code says - (e) A closing agent to which this section applies shall document its compliance with this section with respect to each transaction in the form of verification of compliance signed by the customer - your procedures/practices will not be enough IMO.

Also, this document MUST be printed on yellow or gold paper.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#284526 - 12/20/04 06:46 PM Re: Closing Agents and Property Tax Deduction Discl
Anonymous
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Dan--
Are you saying that the form for verification of compliance has to be in yellow or gold also?

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#284527 - 12/20/04 06:53 PM Re: Closing Agents and Property Tax Deduction Discl
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
No (sorry for the confusion), only the form/disclosure.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#284528 - 12/20/04 07:51 PM Re: Closing Agents and Property Tax Deduction Discl
Anonymous
Unregistered

Thanks Dan.

One more stupid question. (hopefully)

Is this another one of the State laws that only applies to state chartered banks? What agency will be checking the national banks for compliance?

Sorry that was two questions not one.

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#284529 - 12/20/04 09:09 PM Re: Closing Agents and Property Tax Deduction Discl
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
This law applies to anyone closing a first lien mortgage loan. Title companies, attorneys, credit unions, banks, etc.

I'm not sure who will examine national banks for compliance. If I'm reading the code correctly the DFI will examine state banks and whatever state agency regulates title companies will examine them, whoever regulates attorneys will examine them, etc.

"The penalty:
(1) may be enforced by the state agency that has administrative jurisdiction over the closing agent in the same manner that the agency enforces the payment of fees or other penalties payable to the agency; and
(2) shall be paid into the property tax replacement fund."


I would speculate this will be a "hot button", because each violation is $25 and that money goes into the state's property tax replacement funds. (Maybe this is how they are going to pay for the Colts new stadium!)
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#284530 - 12/27/04 06:52 PM Re: Closing Agents and Property Tax Deduction Discl
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
FWIW, I was talking to the DFI concerning another issue and I brought up a question concerning showing compliance with this new notice requirement when a loan was closed outside the bank (title companies, attorneys, etc.). The person I was talking to said since they (title companies, attorneys, etc.) would be acting as our agent, we would still be considered the closing agent and responsible for showing compliance.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#284531 - 12/28/04 05:33 PM Re: Closing Agents and Property Tax Deduction Discl
Elaine K. Sheehan Offline
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Elaine  K. Sheehan
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Posts: 157
Grand Rapids, MI
This is related but a little off the topic, do you also in certain transactions make sure that the Sales Disclosure Form (Form 46021) is completed, or is this strictly a title company or attorney function?

Now back to the topic at hand Form 51781 Indiana Property Tax Benefits. In talking with the Department of Local Government Finance it was indicated that they have produced the format for the form but that no government agency would supply the gold or yellow paper versions. They expect that when the form is needed that the entity would whip out its gold paper and slip it into the printer. My question is are you more likely to print off your own copies or order from a preprint form provider?

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#284532 - 12/28/04 07:55 PM Re: Closing Agents and Property Tax Deduction Discl
Dan Persfull Offline
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Dan Persfull
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Posts: 47,016
Bloomington, IN
Yes we make sure the Sales Disclosure is completed and a completed copy must be returned with the closing package.

We will print our own as needed.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#284533 - 12/28/04 08:14 PM Re: Closing Agents and Property Tax Deduction Discl
Elaine K. Sheehan Offline
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Elaine  K. Sheehan
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Posts: 157
Grand Rapids, MI
Dan, is there any circumstance when your institution prepares the Sales Disclosure?

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