Sec. 16. Rollover mortgage loans are subject to the following:
(1) At each scheduled adjustment time, if the loan is not in default, the lender shall make rate adjustments available for the amount of the outstanding loan.
(2) In adjusting the loan, administrative expenses may not be charged to the borrower.
(3) Adjustments must be at least one (1) year apart.
(4) The lender may not charge a penalty or other assessment for the prepayment of the loan.
(5) The lender and the borrower may agree to increase or decrease the interest rate applicable to the outstanding balance of the loan at each adjustment.
(6) The lender may grant the borrower the option of extending the amortization period for purposes of calculating monthly payments on the loan in accordance with the following rules:
(A) The extension of the amortization period may equal up to one-third (1/3) of the original amortization period, regardless of whether this extends the amortization period beyond thirty (30) years.
(B) To the extent of any extension of the amortization period, the amortization period will be reduced upon a subsequent downward adjustment in the interest rate.
As added by P.L.193-1997, SEC.2.