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#284534 - 12/28/04 08:29 PM Re: Closing Agents and Property Tax Deduction Discl
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,017
Bloomington, IN
Only if we close the loan in-house. However the majority of our purchase transactions are closed at a title company.
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#284535 - 01/14/05 09:54 PM Re: There is an acknowledgment requirement
Terry Offline
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Terry
Joined: Sep 2001
Posts: 314
Midwest
Quote:

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.




I don't think Reg Z defines what is a refinance. But it does define "residential mortgage transaction". Do you think he meant that the only refinances covered by new regulation are refinances of residential mortgage transactions? Where do HELOCs, bridge loans, and construction loans fit in?

I just learned of this new regulation today, but I see that you've all be discussing it for the last month! Where did you all find out about this? It wasn't in the Hoosier Banker or any IBA e-mail newsletters that I can recall.
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#284536 - 01/20/05 02:38 PM Re: There is an acknowledgment requirement
Anonymous
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Just spoke with a field assessor with the Department of Local Government Finance (DLGF) . That state agency/department is responsible for property tax assessment, therefore has responsibility for implementing this new law.

Indiana had its property tax system declared unconstitutional by a court a few years back and had to totally revise the system to a "market value" approach. As a result, the nearly, fully depreciated older homes saw a huge potential property tax increase, the homeowners screamed, and the state legislators began enacting a variety of property tax exemptions and deductions to ease the impact of the increase.

The new form is a way of publicizing all of the property tax exemptions and deductions. According to the field assessor, it probably should be received on any loan or line collateralized by a single family residence, regardless of lien position. However, the field assessor doesn't make policy, the department's policymakers are at a conference 1/20/05, and I'll call tomorrow to get an update - DLGF main number is 317-232-3777.

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#284537 - 01/20/05 03:29 PM Re: There is an acknowledgment requirement
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,017
Bloomington, IN
Anon, thanks for the information.

Quote:

According to the field assessor, it probably should be received on any loan or line collateralized by a single family residence, regardless of lien position.




Although I don't disagree with this statement from a customer service stand point, the IN Code does not require it for subordinate lien loans.

IC 6-1.1-12-43
Information provided by closing agents to customers in residential financing transactions; penalty; compliance
Sec. 43. (a) For purposes of this section :
(1) "benefit" refers to:
(A) a deduction under section 1, 9, 11, 13, 14, 16, 17.4, 26, 29, 31, 33, or 34 of this chapter; or
(B) the homestead credit under IC 6-1.1-20.9-2;
(2) "closing agent" means a person that closes a transaction;
(3) "customer" means an individual who obtains a loan in a transaction; and
(4) "transaction" means a single family residential:
(A) first lien purchase money mortgage transaction; or
(B) refinancing transaction.



Did the field assessor indicate this policy might be amended to require it for all single family transactions?
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#284538 - 01/20/05 06:56 PM Re: There is an acknowledgment requirement
Phoenix Offline
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Phoenix
Joined: May 2003
Posts: 832
southeast
: ( - should have logged in this AM before posting my phone conversation with the field assessor.

No - he didn't say anything about any amendment. In fact, he needed to confirm with his supervisor what form I was even talking about.

My concern, and our lenders' concern, is that sometimes home improvement loans and HELOCs are refinanced (same bank or another bank), and many of those have junior liens.

To simplify the interpretation, I'd love to think that the law's language refers only to purchase mortgage transactions, and refinances of those purchase mortgage transactions (for SFRs). My lenders and I just worry that what IN may want may be broader. So - I'll call tomorrow, in-between snow storms, and let everyone know what I hear.
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#284539 - 01/24/05 02:25 PM Re: There is an acknowledgment requirement
Anonymous
Unregistered

No update yet. The DLGF Communications Officer and I talked a bit Friday, 1/21/05, and she sent me a couple of emails that only restated the new law. I sent her our lenders' questions about junior liens and HELOCs and await her response.

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#284540 - 01/28/05 05:05 PM Re: There is an acknowledgment requirement
Phoenix Offline
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Phoenix
Joined: May 2003
Posts: 832
southeast
The IBA confirmed a lot of what Dan's written previously. This legislation was pretty much under any media or political radar screen, so there won't be any record of its intent or debate or history. The IBA concentrated its lobbying effort on making sure that banks did not have the primary regulatory burden for sending out these disclosures, and in developing model disclosures, and the IBA succeeded in having that burden go the the closing agents and in having the IN government develop the model disclosure.

So - what does "refinance" mean? The IBA is suggesting that it's a refinance of the initial loan(s) obtained to acquire the property; however, it can also apply if that initial mortgage was paid off and later on the homeowners decide to get a HELOC or home loan with a brand new first lien.

The IBA noted that because this definition differs from the HMDA and other regulatory definitions, it may be easier to simply include this disclosure, and an acknowledgement of its receipt, in the initial home loan application packet on every home loan/line. Some lenders are doing that and marketing it as a customer service.

Maybe the next step for Indiana BOLers is to do a poll of what they're doing?
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#284541 - 01/28/05 05:38 PM Re: There is an acknowledgment requirement
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,017
Bloomington, IN
Quote:

it may be easier to simply include this disclosure, and an acknowledgement of its receipt, in the initial home loan application packet




This is what we are already doing.

Thanks for the update.
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#2185674 - 07/17/18 05:04 PM Re: Closing Agents and Property Tax Deduction Discl Elaine K. Sheehan
Newbie06 Offline
Platinum Poster
Joined: Mar 2006
Posts: 663
We have a separate piece of paper, where the customer acknowledges that they have received the IN Tax Benefit form, that we typically print on yellow paper. My question is does this signature page have to be on yellow paper. We always have had it on yellow paper but since we are getting into imaging documents the image doesn't show up in yellow.

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#2185809 - 07/18/18 01:35 PM Re: Closing Agents and Property Tax Deduction Discl Comply 101
Newbie06 Offline
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Joined: Mar 2006
Posts: 663
We provide the customer with the Indiana Tax Benefit form, on yellow paper without the signature line, and have the customer sign a separate page indicating they received the form. Does anyone know if this separate signature page has to be on yellow paper?

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#2185869 - 07/18/18 03:53 PM Re: Closing Agents and Property Tax Deduction Discl Comply 101
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,017
Bloomington, IN
Only the form has to be gold or yellow but the acknowledgment form should be in the following format.

CLOSING AGENT INSTRUCTIONS
Pursuant to Section 6-1.1-12-43 of the Indiana Code, before closing a transaction after December 31, 2004, a closing
agent must provide a copy of Indiana State Form 51781 (Indiana Property Tax Benefits) to individuals who obtain
a loan secured by a single-family residence, which is a first lien purchase money mortgage transaction or a refinance
transaction.

Accordingly, all closing agents are hereby instructed to reproduce the attached copy of Indiana State Form 51781
(Indiana Property Tax Benefits) on GOLD or YELLOW PAPER, and provide a copy to each borrower.

BORROWER ACKNOWLEDGMENT
By signing below, each of the undersigned hereby acknowledges receipt of a copy of Indiana State Form 51781
(Indiana Property Tax Benefits) on GOLD or YELLOW PAPER.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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