Section 28-15-11-18 - Inapplicability of Indiana laws; interest added to principal; lien provided by mortgage(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.Amended by P.L. 27-2012, SEC. 116, eff. 7/1/2012.As added by P.L. 193-1997, SEC.2.