Purchaser or assignee subject to affirmative claims and defenses; claims available to borrower

Sec. 1. (a) A person who purchases or is otherwise assigned a high cost home loan is subject to all affirmative claims and any defenses, except for an affirmative claim or defense pursuant to IC 37-5-3-7, with respect to the high cost home loan that the borrower could assert against a creditor or broker of the high cost home loan. However, this section does not apply if the purchaser or assignee demonstrates by a preponderance of the evidence that a reasonable person exercising ordinary due diligence could not determine that the loan was a high cost home loan. A purchaser or an assignee is presumed to have exercised reasonable due diligence if the purchaser or assignee: (1) has in place at the time of the purchase or assignment of the subject loans, policies that expressly prohibit the purchase or acceptance of the assignment of any high cost home loans; (2) requires by contract that a seller or an assignor of home loans to the purchaser or assignee represents and warrants to the purchaser or assignee that either: (A) the seller or assignor will not sell or reassign any high cost home loans to the purchaser or assignee; or (B) the seller or assignor is a beneficiary of a representation and warranty from a previous seller or assignor to that effect; (3) exercises reasonable due diligence: (A) at the time of purchase or assignment of home loans; or (B) within a reasonable period after the purchase or assignment of home loans; intended by the purchaser or assignee to prevent the purchaser or assignee from purchasing or taking assignment of any high cost home loans; or (4) satisfies the requirements of subdivisions (1) and (2) and establishes that a reasonable person exercising ordinary due diligence could not determine that the loan was a high cost home loan based on the: (A) documentation required by the federal Truth in Lending Act (15 U.S.C. 1601 et seq.); and (B) itemization of the amount financed and other disbursement disclosures. (b) A borrower acting only in an individual capacity may assert against the creditor or any subsequent holder or assignee of a high cost home loan: (1) a violation of IC 37-5-4-2 as a defense, claim, or counterclaim, after: (A) an action to enjoin foreclosure or to preserve or obtain possession of the dwelling that secures the loan is initiated; (B) an action to collect on the loan or foreclose on the collateral securing the loan is initiated; or (C) the loan is more than sixty (60) days in default; within three (3) years after the closing of a home loan; (2) a violation of this article in connection to the high cost home loan as a defense, claim, or counterclaim in an original action within five (5) years after the closing of a high cost home loan; and (3) any defense, claim, counterclaim, or action to enjoin foreclosure or preserve or obtain possession of the home that secures the loan, including a violation of this article after: (A) an action to collect on the loan or foreclose on the collateral securing the loan is initiated; (B) the debt arising from the loan is accelerated; or (C) the loan is more than sixty (60) days in default; at any time during the term of a high cost home loan. (c) In an action, a claim, or a counterclaim brought under subsection (b), the borrower may recover only amounts required to reduce or extinguish the borrower's liability under a home loan plus amounts required to recover costs, including reasonable attorney's fees. (d) The provisions of this section are effective notwithstanding any other provision of law. This section shall not be construed to limit the substantive rights, remedies, or procedural rights available to a borrower against any creditor, assignee, or holder under any other law. The rights conferred on borrowers by subsections (a) and (b) are independent of each other and do not limit each other.