Bill Amendment: IL SB1093 | 2021-2022 | 102nd General Assembly
NOTE: For additional amemendments please see the Bill Drafting List
Bill Title: REGULATION-TECH
Status: 2022-04-30 - Chief Sponsor Changed to Sen. Don Harmon [SB1093 Detail]
Download: Illinois-2021-SB1093-Senate_Amendment_001.html
Bill Title: REGULATION-TECH
Status: 2022-04-30 - Chief Sponsor Changed to Sen. Don Harmon [SB1093 Detail]
Download: Illinois-2021-SB1093-Senate_Amendment_001.html
| |||||||
| |||||||
| |||||||
1 | AMENDMENT TO SENATE BILL 1093
| ||||||
2 | AMENDMENT NO. ______. Amend Senate Bill 1093 by replacing | ||||||
3 | everything after the enacting clause with the following:
| ||||||
4 | "Section 5. The Residential Mortgage License Act of 1987 | ||||||
5 | is amended by changing Sections 1-3 and 1-4 and by adding | ||||||
6 | Section 7-16 as follows:
| ||||||
7 | (205 ILCS 635/1-3) (from Ch. 17, par. 2321-3) | ||||||
8 | Sec. 1-3. Necessity for license; scope of Act. | ||||||
9 | (a) No person, partnership, association, corporation or | ||||||
10 | other entity
shall engage in the business of brokering, | ||||||
11 | funding, originating, servicing
or purchasing of residential | ||||||
12 | mortgage loans without first obtaining a
license from the | ||||||
13 | Secretary in accordance with the licensing procedure
provided | ||||||
14 | in this Article I and such regulations as may be promulgated by
| ||||||
15 | the Secretary. The licensing provisions of this Section shall | ||||||
16 | not apply
to any entity engaged solely in commercial mortgage |
| |||||||
| |||||||
1 | lending or
to any person, partnership association, corporation | ||||||
2 | or other entity
exempted pursuant to Section 1-4, subsection | ||||||
3 | (d), of this Act or in accordance
with regulations promulgated | ||||||
4 | by the Secretary hereunder. No provision of this Act shall | ||||||
5 | apply to an exempt person or entity as defined in items (1) and | ||||||
6 | (1.5) of subsection (d) of Section 1-4 of this Act. | ||||||
7 | Notwithstanding anything to the contrary in the preceding | ||||||
8 | sentence, an individual acting as a mortgage loan originator | ||||||
9 | who is not employed by and acting for an entity described in | ||||||
10 | item (1) of subsection (tt) of Section 1-4 of this Act shall be | ||||||
11 | subject to the mortgage loan originator licensing requirements | ||||||
12 | of Article VII of this Act. | ||||||
13 | Effective January 1, 2011, no provision of this Act shall | ||||||
14 | apply to an exempt person or entity as defined in item (1.8) of | ||||||
15 | subsection (d) of Section 1-4 of this Act. Notwithstanding | ||||||
16 | anything to the contrary in the preceding sentence, an | ||||||
17 | individual acting as a mortgage loan originator who is not | ||||||
18 | employed by and acting for an entity described in item (1) of | ||||||
19 | subsection (tt) of Section 1-4 of this Act shall be subject to | ||||||
20 | the mortgage loan originator licensing requirements of Article | ||||||
21 | VII of this Act, and provided that an individual acting as a | ||||||
22 | mortgage loan originator under item (1.8) of subsection (d) of | ||||||
23 | Section 1-4 of this Act shall be further subject to a | ||||||
24 | determination by the U.S. Department of Housing and Urban | ||||||
25 | Development through final rulemaking or other authorized | ||||||
26 | agency determination under the federal Secure and Fair |
| |||||||
| |||||||
1 | Enforcement for Mortgage Licensing Act of 2008. | ||||||
2 | (a-1) A person who is exempt from licensure pursuant to | ||||||
3 | paragraph (ii) of item (1) of subsection (d) of Section 1-4 of | ||||||
4 | this Act as a federally chartered savings bank that is | ||||||
5 | registered with the Nationwide Multistate Licensing System and | ||||||
6 | Registry may apply to the Secretary for an exempt company | ||||||
7 | registration for the purpose of sponsoring one or more | ||||||
8 | individuals subject to the mortgage loan originator licensing | ||||||
9 | requirements of Article VII of this Act. Registration with the | ||||||
10 | Division of Banking of the Department shall not affect the | ||||||
11 | exempt status of the applicant. | ||||||
12 | (1) A mortgage loan originator eligible for licensure | ||||||
13 | under this subsection shall (A) be covered under an | ||||||
14 | exclusive written contract with, and originate residential | ||||||
15 | mortgage loans solely on behalf of, that exempt person; | ||||||
16 | and (B) hold a current, valid insurance producer license | ||||||
17 | under Article XXXI of the Illinois Insurance Code. | ||||||
18 | (2) An exempt person shall: (A) fulfill any reporting | ||||||
19 | requirements required by the Nationwide Multistate | ||||||
20 | Licensing System and Registry or the Secretary; (B) | ||||||
21 | provide a blanket surety bond pursuant to Section 7-12 of | ||||||
22 | this Act covering the activities of all its sponsored | ||||||
23 | mortgage loan originators; (C) reasonably supervise the | ||||||
24 | activities of all its sponsored mortgage loan originators; | ||||||
25 | (D) comply with all rules and orders (including the | ||||||
26 | averments contained in Section 2-4 of this Act as |
| |||||||
| |||||||
1 | applicable to a non-licensed exempt entity provided for in | ||||||
2 | this Section) that the Secretary deems necessary to ensure | ||||||
3 | compliance with the federal SAFE Act; and (E) pay an | ||||||
4 | annual registration fee established by the Director. | ||||||
5 | (3) The Secretary may deny an exempt company | ||||||
6 | registration to an exempt person or fine, suspend, or | ||||||
7 | revoke an exempt company registration if the Secretary | ||||||
8 | finds one of the following: | ||||||
9 | (A) that the exempt person is not a person of | ||||||
10 | honesty, truthfulness, or good character; | ||||||
11 | (B) that the exempt person violated any applicable | ||||||
12 | law, rule, or order; | ||||||
13 | (C) that the exempt person refused or failed to | ||||||
14 | furnish, within a reasonable time, any information or | ||||||
15 | make any report that may be required by the Secretary; | ||||||
16 | (D) that the exempt person had a final judgment | ||||||
17 | entered against him or her in a civil action on grounds | ||||||
18 | of fraud, deceit, or misrepresentation, and the | ||||||
19 | conduct on which the judgment is based indicates that | ||||||
20 | it would be contrary to the interest of the public to | ||||||
21 | permit the exempt person to manage a loan originator; | ||||||
22 | (E) that the exempt person had an order entered | ||||||
23 | against him or her involving fraud, deceit, or | ||||||
24 | misrepresentation by an administrative agency of this | ||||||
25 | State, the federal government, or any other state or | ||||||
26 | territory of the United States, and the facts relating |
| |||||||
| |||||||
1 | to the order indicate that it would be contrary to the | ||||||
2 | interest of the public to permit the exempt person to | ||||||
3 | manage a loan originator; | ||||||
4 | (F) that the exempt person made a material | ||||||
5 | misstatement or suppressed or withheld information on | ||||||
6 | the application for an exempt company registration or | ||||||
7 | any document required to be filed with the Secretary; | ||||||
8 | or | ||||||
9 | (G) that the exempt person violated Section 4-5 of | ||||||
10 | this Act. | ||||||
11 | (a-5) An entity that is exempt from licensure pursuant to | ||||||
12 | item (7) of subsection (d) of Section 1-4 of this Act as an | ||||||
13 | independent loan processing entity shall annually apply to the | ||||||
14 | Secretary through the Nationwide Multistate Licensing System | ||||||
15 | and Registry for an exempt company registration for the | ||||||
16 | purpose of sponsoring one or more individuals subject to the | ||||||
17 | mortgage loan originator licensing requirements of Article VII | ||||||
18 | of this Act. A loan processor who performs clerical or support | ||||||
19 | duties at the direction of and subject to the supervision and | ||||||
20 | instruction of a licensed mortgage loan originator sponsored | ||||||
21 | by an independent loan processing entity shall be exempt from | ||||||
22 | his or her own licensing as a mortgage loan originator. An | ||||||
23 | independent loan processing entity shall not be subject to | ||||||
24 | examination by the Secretary. The Secretary may adopt rules to | ||||||
25 | implement any provisions necessary for the administration of | ||||||
26 | this subsection. |
| |||||||
| |||||||
1 | (b) No person, partnership, association, corporation, or | ||||||
2 | other entity
except a licensee under this Act or an entity | ||||||
3 | exempt from licensing
pursuant to Section 1-4, subsection (d), | ||||||
4 | of this Act shall do any business
under any name or title, or | ||||||
5 | circulate or use any advertising or make any
representation or | ||||||
6 | give any information to any person, which indicates or
| ||||||
7 | reasonably implies activity within the scope
of this Act. | ||||||
8 | (c) The Secretary may, through the Attorney General, | ||||||
9 | request the circuit
court of either Cook or Sangamon County to | ||||||
10 | issue an injunction to restrain
any person from violating or | ||||||
11 | continuing to violate any of the foregoing
provisions of this | ||||||
12 | Section. | ||||||
13 | (d) When the Secretary has reasonable cause to believe | ||||||
14 | that any
entity which has not submitted an application for | ||||||
15 | licensure is conducting
any of the activities described in | ||||||
16 | subsection (a) hereof, the Secretary
shall have the power to | ||||||
17 | examine all books and records of the entity and any
additional | ||||||
18 | documentation necessary in order to determine whether such
| ||||||
19 | entity should become licensed under this Act. | ||||||
20 | (d-1) The Secretary may issue orders against any person if | ||||||
21 | the Secretary has reasonable cause to believe that an unsafe, | ||||||
22 | unsound, or unlawful practice has occurred, is occurring, or | ||||||
23 | is about to occur, if any person has violated, is violating, or | ||||||
24 | is about to violate any law, rule, or written agreement with | ||||||
25 | the Secretary, or for the purposes of administering the | ||||||
26 | provisions of this Act and any rule adopted in accordance with |
| |||||||
| |||||||
1 | this Act.
| ||||||
2 | (e) Any person, partnership, association, corporation or | ||||||
3 | other entity
who violates any provision of this Section | ||||||
4 | commits a business offense and
shall be fined an amount not to | ||||||
5 | exceed $25,000. A mortgage loan brokered, funded, originated, | ||||||
6 | serviced, or purchased by a party who is not licensed under | ||||||
7 | this Section shall not be held to be invalid solely on the | ||||||
8 | basis of a violation under this Section. The changes made to | ||||||
9 | this Section by Public Act 99-113 are declarative of existing | ||||||
10 | law. | ||||||
11 | (f) Each person, partnership, association, corporation or | ||||||
12 | other entity
conducting activities regulated by this Act shall | ||||||
13 | be issued one license.
Each office, place of business or | ||||||
14 | location at which a residential mortgage
licensee conducts any | ||||||
15 | part of his or her business must
be recorded with the Secretary | ||||||
16 | pursuant to Section 2-8 of this Act , unless allowed under | ||||||
17 | Section 7-16 of this Act . | ||||||
18 | (g) Licensees under this Act shall solicit, broker, fund, | ||||||
19 | originate,
service and purchase residential mortgage loans | ||||||
20 | only in conformity with the
provisions of this Act and such | ||||||
21 | rules and regulations as may be promulgated
by the Secretary. | ||||||
22 | (h) This Act applies to all entities doing business in | ||||||
23 | Illinois as
residential mortgage bankers, as defined by "An | ||||||
24 | Act to provide for the
regulation of mortgage bankers", | ||||||
25 | approved September 15, 1977, as amended,
regardless of whether | ||||||
26 | licensed under that or any prior Act. Any existing
residential |
| |||||||
| |||||||
1 | mortgage lender or residential mortgage broker in Illinois
| ||||||
2 | whether or not previously licensed, must operate in accordance | ||||||
3 | with this Act. | ||||||
4 | (i) This Act is a successor Act to and a continuance of the | ||||||
5 | regulation
of residential mortgage bankers provided in "An Act | ||||||
6 | to provide for the
regulation of mortgage bankers", approved | ||||||
7 | September 15, 1977, as amended. | ||||||
8 | Entities and persons subject to the predecessor Act shall | ||||||
9 | be subject to
this Act from and after its effective date. | ||||||
10 | (Source: P.A. 100-851, eff. 8-14-18; 100-1153, eff. 12-19-18; | ||||||
11 | 101-81, eff. 7-12-19.)
| ||||||
12 | (205 ILCS 635/1-4) | ||||||
13 | Sec. 1-4. Definitions. The following words and phrases | ||||||
14 | have the meanings given to them in this Section: | ||||||
15 | (a) "Residential real property" or "residential real | ||||||
16 | estate" shall mean any real property located in Illinois, | ||||||
17 | upon which is constructed or intended to be constructed a | ||||||
18 | dwelling. Those terms include a manufactured home as | ||||||
19 | defined in subdivision (53) of Section 9-102 of the | ||||||
20 | Uniform Commercial Code which is real property as defined | ||||||
21 | in Section 5-35 of the Conveyance and Encumbrance of | ||||||
22 | Manufactured Homes as Real Property and Severance Act. | ||||||
23 | (b) "Making a residential mortgage loan" or "funding a | ||||||
24 | residential mortgage
loan" shall mean for compensation or | ||||||
25 | gain, either directly or indirectly,
advancing funds or |
| |||||||
| |||||||
1 | making a commitment to advance funds to a loan applicant
| ||||||
2 | for a residential mortgage loan. | ||||||
3 | (c) "Soliciting, processing, placing, or negotiating a | ||||||
4 | residential
mortgage loan" shall mean for compensation or | ||||||
5 | gain, either directly or
indirectly, accepting or offering | ||||||
6 | to accept an application for a
residential mortgage loan, | ||||||
7 | assisting or offering to assist in the
processing of an | ||||||
8 | application for a residential mortgage loan on behalf of a
| ||||||
9 | borrower, or negotiating or offering to negotiate the | ||||||
10 | terms or conditions
of a residential mortgage loan with a | ||||||
11 | lender on behalf of a borrower
including, but not limited | ||||||
12 | to, the submission of credit packages for the
approval of | ||||||
13 | lenders, the preparation of residential mortgage loan | ||||||
14 | closing
documents, including a closing in the name of a | ||||||
15 | broker. | ||||||
16 | (d) "Exempt person or entity" shall mean the | ||||||
17 | following: | ||||||
18 | (1) (i) Any banking organization or foreign | ||||||
19 | banking corporation
licensed by the Illinois | ||||||
20 | Commissioner of Banks and Real Estate or the
United | ||||||
21 | States Comptroller of the Currency to transact | ||||||
22 | business in this
State; (ii) any national bank, | ||||||
23 | federally chartered savings and loan
association, | ||||||
24 | federal savings bank, federal credit union; (iii) | ||||||
25 | (blank); (iv) any bank, savings and loan
association, | ||||||
26 | savings bank, or credit union organized under the laws |
| |||||||
| |||||||
1 | of this
or any other state; (v) any Illinois Consumer | ||||||
2 | Installment Loan Act licensee;
(vi) any insurance | ||||||
3 | company authorized to transact business in this State;
| ||||||
4 | (vii) any entity engaged solely in commercial mortgage | ||||||
5 | lending; (viii) any
service corporation of a savings | ||||||
6 | and loan association or savings bank organized
under | ||||||
7 | the laws of this State or the service corporation of a | ||||||
8 | federally
chartered savings and loan association or | ||||||
9 | savings bank having
its principal place of business in | ||||||
10 | this State, other than a service
corporation licensed | ||||||
11 | or entitled to reciprocity under the Real Estate
| ||||||
12 | License Act of 2000; or (ix) any first tier subsidiary | ||||||
13 | of a
bank, the charter of which is issued under the | ||||||
14 | Illinois Banking Act
by the Illinois Commissioner of | ||||||
15 | Banks and Real Estate,
or the first tier subsidiary of | ||||||
16 | a bank chartered by the United States
Comptroller of | ||||||
17 | the Currency and that has its principal place of | ||||||
18 | business
in this State, provided that the first tier | ||||||
19 | subsidiary is regularly
examined by the Illinois | ||||||
20 | Commissioner of Banks and Real Estate
or the | ||||||
21 | Comptroller of the Currency, or a consumer compliance | ||||||
22 | examination is
regularly conducted by the Federal | ||||||
23 | Reserve Board. | ||||||
24 | (1.5) Any employee of a person or entity mentioned | ||||||
25 | in
item (1) of this subsection, when acting for such | ||||||
26 | person or entity, or any registered mortgage loan |
| |||||||
| |||||||
1 | originator when acting for an entity described in | ||||||
2 | subsection (tt) of this Section. | ||||||
3 | (1.8) Any person or entity that does not originate | ||||||
4 | mortgage loans in the ordinary course of business, but | ||||||
5 | makes or acquires residential mortgage loans with his | ||||||
6 | or her own funds for his or her or its own investment | ||||||
7 | without intent to make, acquire, or resell more than 3 | ||||||
8 | residential mortgage loans in any one calendar year. | ||||||
9 | (2) (Blank). | ||||||
10 | (2.1) A bona fide nonprofit organization. | ||||||
11 | (2.2) An employee of a bona fide nonprofit | ||||||
12 | organization when acting on behalf of that | ||||||
13 | organization. | ||||||
14 | (3) Any person employed by a licensee to assist in | ||||||
15 | the performance of
the residential mortgage licensee's | ||||||
16 | activities regulated by this Act who is compensated in | ||||||
17 | any manner by
only one licensee. | ||||||
18 | (4) (Blank). | ||||||
19 | (5) Any individual, corporation, partnership, or | ||||||
20 | other entity that
originates, services, or brokers | ||||||
21 | residential mortgage loans, as these
activities are | ||||||
22 | defined in this Act, and who or which receives no
| ||||||
23 | compensation for those activities, subject to the | ||||||
24 | Commissioner's
regulations and the federal Secure and | ||||||
25 | Fair Enforcement for Mortgage Licensing Act of 2008 | ||||||
26 | and the rules promulgated under that Act with regard |
| |||||||
| |||||||
1 | to the nature and amount of compensation. | ||||||
2 | (6) (Blank). | ||||||
3 | (7) Any entity engaged solely in providing loan | ||||||
4 | processing services through the sponsoring of | ||||||
5 | individuals acting pursuant to subsection (d) of | ||||||
6 | Section 7-1A of this Act. | ||||||
7 | (e) "Licensee" or "residential mortgage licensee" | ||||||
8 | shall mean a person,
partnership, association, | ||||||
9 | corporation, or any other entity who or which is
licensed | ||||||
10 | pursuant to this Act to engage in the activities regulated | ||||||
11 | by
this Act. | ||||||
12 | (f) "Mortgage loan" "residential mortgage loan" or | ||||||
13 | "home
mortgage loan" shall mean any loan primarily for | ||||||
14 | personal, family, or household use that is secured by a | ||||||
15 | mortgage, deed of trust, or other equivalent consensual | ||||||
16 | security interest on a dwelling as defined in Section | ||||||
17 | 103(v) of the federal Truth in Lending Act, or residential | ||||||
18 | real estate upon which is constructed or intended to be | ||||||
19 | constructed a dwelling. | ||||||
20 | (g) "Lender" shall mean any person, partnership, | ||||||
21 | association,
corporation, or any other entity who either | ||||||
22 | lends or invests money in
residential mortgage loans. | ||||||
23 | (h) "Ultimate equitable owner" shall mean a person | ||||||
24 | who, directly
or indirectly, owns or controls an ownership | ||||||
25 | interest in a corporation,
foreign corporation, alien | ||||||
26 | business organization, trust, or any other form
of |
| |||||||
| |||||||
1 | business organization regardless of whether the person | ||||||
2 | owns or controls
the ownership interest through one or | ||||||
3 | more persons or one or more proxies,
powers of attorney, | ||||||
4 | nominees, corporations, associations, partnerships,
| ||||||
5 | trusts, joint stock companies, or other entities or | ||||||
6 | devices, or any
combination thereof. | ||||||
7 | (i) "Residential mortgage financing transaction" shall | ||||||
8 | mean the negotiation,
acquisition, sale, or arrangement | ||||||
9 | for or the offer to negotiate, acquire,
sell, or arrange | ||||||
10 | for, a residential mortgage loan or residential mortgage
| ||||||
11 | loan commitment. | ||||||
12 | (j) "Personal residence address" shall mean a street | ||||||
13 | address and shall
not include a post office box number. | ||||||
14 | (k) "Residential mortgage loan commitment" shall mean | ||||||
15 | a contract for
residential mortgage loan financing. | ||||||
16 | (l) "Party to a residential mortgage financing | ||||||
17 | transaction" shall mean a
borrower, lender, or loan broker | ||||||
18 | in a residential mortgage financing
transaction. | ||||||
19 | (m) "Payments" shall mean payment of all or any of the | ||||||
20 | following:
principal, interest and escrow reserves for | ||||||
21 | taxes, insurance and other related
reserves, and | ||||||
22 | reimbursement for lender advances. | ||||||
23 | (n) "Commissioner" shall mean the Commissioner of | ||||||
24 | Banks and Real Estate, except that, beginning on April 6, | ||||||
25 | 2009 (the effective date of Public Act 95-1047), all | ||||||
26 | references in this Act to the Commissioner of Banks and |
| |||||||
| |||||||
1 | Real Estate are deemed, in appropriate contexts, to be | ||||||
2 | references to the Secretary of Financial and Professional | ||||||
3 | Regulation, or his or her designee, including the Director | ||||||
4 | of the Division of Banking of the Department of Financial | ||||||
5 | and Professional Regulation. | ||||||
6 | (n-1) "Director" shall mean the Director of the | ||||||
7 | Division of Banking of the Department of Financial and | ||||||
8 | Professional Regulation, except that, beginning on July | ||||||
9 | 31, 2009 (the effective date of Public Act 96-112), all | ||||||
10 | references in this Act to the Director are deemed, in | ||||||
11 | appropriate contexts, to be the Secretary of Financial and | ||||||
12 | Professional Regulation, or his or her designee, including | ||||||
13 | the Director of the Division of Banking of the Department | ||||||
14 | of Financial and Professional Regulation. | ||||||
15 | (o) "Loan brokering", "brokering", or "brokerage | ||||||
16 | service" shall mean the act
of helping to obtain from | ||||||
17 | another entity, for a borrower, a loan secured by
| ||||||
18 | residential real estate situated in Illinois or assisting | ||||||
19 | a borrower in
obtaining a loan secured by residential real | ||||||
20 | estate situated in Illinois in
return for consideration to | ||||||
21 | be paid by either the borrower or the lender
including, | ||||||
22 | but not limited to, contracting for the delivery of | ||||||
23 | residential
mortgage loans to a third party lender and | ||||||
24 | soliciting, processing, placing,
or negotiating | ||||||
25 | residential mortgage loans. | ||||||
26 | (p) "Loan broker" or "broker" shall mean a person, |
| |||||||
| |||||||
1 | partnership,
association, corporation, or limited | ||||||
2 | liability company, other than
those persons, partnerships,
| ||||||
3 | associations, corporations, or limited liability companies | ||||||
4 | exempted
from licensing pursuant to Section
1-4, | ||||||
5 | subsection (d), of this Act, who performs the activities | ||||||
6 | described
in subsections (c), (o), and (yy) of this | ||||||
7 | Section. | ||||||
8 | (q) "Servicing" shall mean the collection or | ||||||
9 | remittance for or the
right or obligation to collect or | ||||||
10 | remit for any lender, noteowner,
noteholder, or for a | ||||||
11 | licensee's own account, of payments, interests,
principal, | ||||||
12 | and trust items such as hazard insurance and taxes on a
| ||||||
13 | residential mortgage loan in accordance with the terms of | ||||||
14 | the residential
mortgage loan; and includes loan payment | ||||||
15 | follow-up, delinquency loan
follow-up, loan analysis and | ||||||
16 | any notifications to the borrower that are
necessary to | ||||||
17 | enable the borrower to keep the loan current and in good | ||||||
18 | standing. "Servicing" includes management of third-party | ||||||
19 | entities acting on behalf of a residential mortgage | ||||||
20 | licensee for the collection of delinquent payments and the | ||||||
21 | use by such third-party entities of said licensee's | ||||||
22 | servicing records or information, including their use in | ||||||
23 | foreclosure. | ||||||
24 | (r) "Full service office" shall mean an office, | ||||||
25 | provided by the licensee and not subleased from the | ||||||
26 | licensee's employees, and staff in Illinois
reasonably |
| |||||||
| |||||||
1 | adequate to handle efficiently communications, questions, | ||||||
2 | and
other matters relating to any application for, or an | ||||||
3 | existing home mortgage
secured by residential real estate | ||||||
4 | situated in Illinois
with respect to which the licensee is | ||||||
5 | brokering, funding originating,
purchasing, or servicing. | ||||||
6 | The management and operation of each full service
office | ||||||
7 | must include observance of good business practices such as | ||||||
8 | proper signage; adequate,
organized, and accurate books | ||||||
9 | and records; ample phone lines, hours of
business, staff | ||||||
10 | training and supervision, and provision for a mechanism to
| ||||||
11 | resolve consumer inquiries, complaints, and problems. The | ||||||
12 | Commissioner
shall issue regulations with regard to these | ||||||
13 | requirements and shall include
an evaluation of compliance | ||||||
14 | with this Section in his or her periodic
examination of | ||||||
15 | each licensee. | ||||||
16 | (s) "Purchasing" shall mean the purchase of | ||||||
17 | conventional or
government-insured mortgage loans secured | ||||||
18 | by residential real estate
situated in Illinois from | ||||||
19 | either the lender or from the secondary market. | ||||||
20 | (t) "Borrower" shall mean the person or persons who | ||||||
21 | seek the services of
a loan broker, originator, or lender. | ||||||
22 | (u) "Originating" shall mean the issuing of | ||||||
23 | commitments for and funding of
residential mortgage loans. | ||||||
24 | (v) "Loan brokerage agreement" shall mean a written | ||||||
25 | agreement in which a
broker or loan broker agrees to do | ||||||
26 | either of the following: |
| |||||||
| |||||||
1 | (1) obtain a residential mortgage loan for the | ||||||
2 | borrower or assist the
borrower in obtaining a | ||||||
3 | residential mortgage loan; or | ||||||
4 | (2) consider making a residential mortgage loan to | ||||||
5 | the borrower. | ||||||
6 | (w) "Advertisement" shall mean the attempt by | ||||||
7 | publication,
dissemination, or circulation to induce, | ||||||
8 | directly or indirectly,
any person to enter into a | ||||||
9 | residential mortgage loan agreement or
residential | ||||||
10 | mortgage loan brokerage agreement relative to a
mortgage | ||||||
11 | secured by residential real estate situated in Illinois. | ||||||
12 | (x) (Blank). | ||||||
13 | (y) "Government-insured mortgage loan" shall mean any | ||||||
14 | mortgage loan made
on the security of residential real | ||||||
15 | estate insured by the Department of
Housing and Urban | ||||||
16 | Development or Farmers Home Loan Administration, or
| ||||||
17 | guaranteed by the Veterans Administration. | ||||||
18 | (z) "Annual audit" shall mean a certified audit of the | ||||||
19 | licensee's books and
records and systems of internal | ||||||
20 | control performed by a certified public
accountant in | ||||||
21 | accordance with generally accepted accounting principles
| ||||||
22 | and generally accepted auditing standards. | ||||||
23 | (aa) "Financial institution" shall mean a savings and | ||||||
24 | loan
association, savings bank, credit union, or a bank | ||||||
25 | organized under the
laws of Illinois or a savings and loan | ||||||
26 | association, savings bank,
credit union or a bank |
| |||||||
| |||||||
1 | organized under the laws of the United States and
| ||||||
2 | headquartered in Illinois. | ||||||
3 | (bb) "Escrow agent" shall mean a third party, | ||||||
4 | individual or entity
charged with the fiduciary obligation | ||||||
5 | for holding escrow funds on a
residential mortgage loan | ||||||
6 | pending final payout of those funds
in accordance with the | ||||||
7 | terms of the residential mortgage loan. | ||||||
8 | (cc) "Net worth" shall have the meaning ascribed | ||||||
9 | thereto in Section 3-5
of this Act. | ||||||
10 | (dd) "Affiliate" shall mean: | ||||||
11 | (1) any entity that directly controls or is | ||||||
12 | controlled by the licensee
and any other company that | ||||||
13 | is directly affecting activities regulated by
this Act | ||||||
14 | that is controlled by the company that controls the | ||||||
15 | licensee; | ||||||
16 | (2) any entity: | ||||||
17 | (A) that is controlled, directly or | ||||||
18 | indirectly, by a trust or otherwise,
by or for the | ||||||
19 | benefit of shareholders who beneficially or | ||||||
20 | otherwise
control, directly or indirectly, by | ||||||
21 | trust or otherwise, the licensee or any
company | ||||||
22 | that controls the licensee; or | ||||||
23 | (B) a majority of the directors or trustees of | ||||||
24 | which constitute a
majority of the persons holding | ||||||
25 | any such office with the licensee or any
company | ||||||
26 | that controls the licensee; |
| |||||||
| |||||||
1 | (3) any company, including a real estate | ||||||
2 | investment trust, that is
sponsored and advised on a | ||||||
3 | contractual basis by the licensee or any
subsidiary or | ||||||
4 | affiliate of the licensee. | ||||||
5 | (ee) "First tier subsidiary" shall be defined by | ||||||
6 | regulation
incorporating the comparable definitions used | ||||||
7 | by the Office of the
Comptroller of the Currency and the | ||||||
8 | Illinois Commissioner of Banks
and Real Estate. | ||||||
9 | (ff) "Gross delinquency rate" means the quotient | ||||||
10 | determined by dividing
(1) the sum of (i) the number of | ||||||
11 | government-insured residential mortgage loans
funded or | ||||||
12 | purchased by a licensee in the preceding calendar year | ||||||
13 | that are
delinquent and (ii) the number of conventional | ||||||
14 | residential mortgage loans
funded or purchased by the | ||||||
15 | licensee in the preceding calendar year that are
| ||||||
16 | delinquent by (2) the sum of (i) the number of | ||||||
17 | government-insured residential
mortgage loans funded or | ||||||
18 | purchased by the licensee in the preceding calendar
year | ||||||
19 | and (ii) the number of conventional residential mortgage | ||||||
20 | loans funded or
purchased by the licensee in the preceding | ||||||
21 | calendar year. | ||||||
22 | (gg) "Delinquency rate factor" means the factor set by | ||||||
23 | rule of the
Commissioner that is multiplied by the average | ||||||
24 | gross delinquency rate of
licensees, determined annually | ||||||
25 | for the immediately preceding calendar year, for
the | ||||||
26 | purpose of determining which licensees shall be examined |
| |||||||
| |||||||
1 | by the
Commissioner pursuant to subsection (b) of Section | ||||||
2 | 4-8 of this Act. | ||||||
3 | (hh) (Blank). | ||||||
4 | (ii) "Confidential supervisory information" means any | ||||||
5 | report of examination, visitation, or investigation | ||||||
6 | prepared by the Commissioner under this Act, any report of | ||||||
7 | examination visitation, or investigation prepared by the | ||||||
8 | state regulatory authority of another state that examines | ||||||
9 | a licensee, any document or record prepared or obtained in | ||||||
10 | connection with or relating to any examination, | ||||||
11 | visitation, or investigation, and any record prepared or | ||||||
12 | obtained by the Commissioner to the extent that the record | ||||||
13 | summarizes or contains information derived from any | ||||||
14 | report, document, or record described in this subsection. | ||||||
15 | "Confidential supervisory information" does not include | ||||||
16 | any information or record routinely prepared by a licensee | ||||||
17 | and maintained in the ordinary course of business or any | ||||||
18 | information or record that is required to be made publicly | ||||||
19 | available pursuant to State or federal law or rule.
| ||||||
20 | (jj) "Mortgage loan originator" means an individual | ||||||
21 | who for compensation or gain or in the expectation of | ||||||
22 | compensation or gain: | ||||||
23 | (i) takes a residential mortgage loan application; | ||||||
24 | or | ||||||
25 | (ii) offers or negotiates terms of a residential | ||||||
26 | mortgage loan. |
| |||||||
| |||||||
1 | "Mortgage loan originator" includes an individual | ||||||
2 | engaged in loan modification activities as defined in | ||||||
3 | subsection (yy) of this Section. A mortgage loan | ||||||
4 | originator engaged in loan modification activities shall | ||||||
5 | report those activities to the Department of Financial and | ||||||
6 | Professional Regulation in the manner provided by the | ||||||
7 | Department; however, the Department shall not impose a fee | ||||||
8 | for reporting, nor require any additional qualifications | ||||||
9 | to engage in those activities beyond those provided | ||||||
10 | pursuant to this Act for mortgage loan originators. | ||||||
11 | "Mortgage loan originator" does not include an | ||||||
12 | individual engaged solely as a loan processor or | ||||||
13 | underwriter except as otherwise provided in subsection (d) | ||||||
14 | of Section 7-1A of this Act. | ||||||
15 | "Mortgage loan originator" does not include a person | ||||||
16 | or entity that only performs real estate brokerage | ||||||
17 | activities and is licensed in accordance with the Real | ||||||
18 | Estate License Act of 2000, unless the person or entity is | ||||||
19 | compensated by a lender, a mortgage broker, or other | ||||||
20 | mortgage loan originator, or by any agent of that lender, | ||||||
21 | mortgage broker, or other mortgage loan originator. | ||||||
22 | "Mortgage loan originator" does not include a person | ||||||
23 | or entity solely involved in extensions of credit relating | ||||||
24 | to timeshare plans, as that term is defined in Section | ||||||
25 | 101(53D) of Title 11, United States Code. | ||||||
26 | (kk) "Depository institution" has the same meaning as |
| |||||||
| |||||||
1 | in Section 3 of the Federal Deposit Insurance Act, and | ||||||
2 | includes any credit union. | ||||||
3 | (ll) "Dwelling" means a residential structure or | ||||||
4 | mobile home which contains one to 4 family housing units, | ||||||
5 | or individual units of condominiums or cooperatives. | ||||||
6 | (mm) "Immediate family member" means a spouse, child, | ||||||
7 | sibling, parent, grandparent, or grandchild, and includes | ||||||
8 | step-parents, step-children, step-siblings, or adoptive | ||||||
9 | relationships. | ||||||
10 | (nn) "Individual" means a natural person. | ||||||
11 | (oo) "Loan processor or underwriter" means an | ||||||
12 | individual who performs clerical or support duties as an | ||||||
13 | employee at the direction of and subject to the | ||||||
14 | supervision and instruction of a person licensed, or | ||||||
15 | exempt from licensing, under this Act. "Clerical or | ||||||
16 | support duties" includes subsequent to the receipt of an | ||||||
17 | application: | ||||||
18 | (i) the receipt, collection, distribution, and | ||||||
19 | analysis of information common for the processing or | ||||||
20 | underwriting of a residential mortgage loan; and | ||||||
21 | (ii) communicating with a consumer to obtain the | ||||||
22 | information necessary for the processing or | ||||||
23 | underwriting of a loan, to the extent that the | ||||||
24 | communication does not include offering or negotiating | ||||||
25 | loan rates or terms, or counseling consumers about | ||||||
26 | residential mortgage loan rates or terms. An |
| |||||||
| |||||||
1 | individual engaging solely in loan processor or | ||||||
2 | underwriter activities shall not represent to the | ||||||
3 | public, through advertising or other means of | ||||||
4 | communicating or providing information, including the | ||||||
5 | use of business cards, stationery, brochures, signs, | ||||||
6 | rate lists, or other promotional items, that the | ||||||
7 | individual can or will perform any of the activities | ||||||
8 | of a mortgage loan originator. | ||||||
9 | (pp) "Nationwide Multistate Licensing System and | ||||||
10 | Registry" means a mortgage licensing system developed and | ||||||
11 | maintained by the Conference of State Bank Supervisors and | ||||||
12 | the American Association of Residential Mortgage | ||||||
13 | Regulators for the licensing and registration of licensed | ||||||
14 | mortgage loan originators. | ||||||
15 | (qq) "Nontraditional mortgage product" means any | ||||||
16 | mortgage product other than a 30-year fixed rate mortgage. | ||||||
17 | (rr) "Person" means a natural person, corporation, | ||||||
18 | company, limited liability company, partnership, or | ||||||
19 | association. | ||||||
20 | (ss) "Real estate brokerage activity" means any | ||||||
21 | activity that involves offering or providing real estate | ||||||
22 | brokerage services to the public, including: | ||||||
23 | (1) acting as a real estate agent or real estate | ||||||
24 | broker for a buyer, seller, lessor, or lessee of real | ||||||
25 | property; | ||||||
26 | (2) bringing together parties interested in the |
| |||||||
| |||||||
1 | sale, purchase, lease, rental, or exchange of real | ||||||
2 | property; | ||||||
3 | (3) negotiating, on behalf of any party, any | ||||||
4 | portion of a contract relating to the sale, purchase, | ||||||
5 | lease, rental, or exchange of real property, other | ||||||
6 | than in connection with providing financing with | ||||||
7 | respect to any such transaction; | ||||||
8 | (4) engaging in any activity for which a person | ||||||
9 | engaged in the activity is required to be registered | ||||||
10 | or licensed as a real estate agent or real estate | ||||||
11 | broker under any applicable law; or | ||||||
12 | (5) offering to engage in any activity, or act in | ||||||
13 | any capacity, described in this subsection (ss). | ||||||
14 | (tt) "Registered mortgage loan originator" means any | ||||||
15 | individual that: | ||||||
16 | (1) meets the definition of mortgage loan | ||||||
17 | originator and is an employee of: | ||||||
18 | (A) a depository institution; | ||||||
19 | (B) a subsidiary that is: | ||||||
20 | (i) owned and controlled by a depository | ||||||
21 | institution; and | ||||||
22 | (ii) regulated by a federal banking | ||||||
23 | agency; or | ||||||
24 | (C) an institution regulated by the Farm | ||||||
25 | Credit Administration; and | ||||||
26 | (2) is registered with, and maintains a unique |
| |||||||
| |||||||
1 | identifier through, the Nationwide Multistate | ||||||
2 | Licensing System and Registry. | ||||||
3 | (uu) "Unique identifier" means a number or other | ||||||
4 | identifier assigned by protocols established by the | ||||||
5 | Nationwide Multistate Licensing System and Registry. | ||||||
6 | (vv) "Residential mortgage license" means a license | ||||||
7 | issued pursuant to Section 1-3, 2-2, or 2-6 of this Act. | ||||||
8 | (ww) "Mortgage loan originator license" means a | ||||||
9 | license issued pursuant to Section 7-1A, 7-3, or 7-6 of | ||||||
10 | this Act. | ||||||
11 | (xx) "Secretary" means the Secretary of the Department | ||||||
12 | of Financial and Professional Regulation, or a person | ||||||
13 | authorized by the Secretary or by this Act to act in the | ||||||
14 | Secretary's stead. | ||||||
15 | (yy) "Loan modification" means, for compensation or | ||||||
16 | gain, either directly or indirectly offering or | ||||||
17 | negotiating on behalf of a borrower or homeowner to adjust | ||||||
18 | the terms of a residential mortgage loan in a manner not | ||||||
19 | provided for in the original or previously modified | ||||||
20 | mortgage loan. | ||||||
21 | (zz) "Short sale facilitation" means, for compensation | ||||||
22 | or gain, either directly or indirectly offering or | ||||||
23 | negotiating on behalf of a borrower or homeowner to | ||||||
24 | facilitate the sale of residential real estate subject to | ||||||
25 | one or more residential mortgage loans or debts | ||||||
26 | constituting liens on the property in which the proceeds |
| |||||||
| |||||||
1 | from selling the residential real estate will fall short | ||||||
2 | of the amount owed and the lien holders are contacted to | ||||||
3 | agree to release their lien on the residential real estate | ||||||
4 | and accept less than the full amount owed on the debt. | ||||||
5 | (aaa) "Bona fide nonprofit organization" means an | ||||||
6 | organization that is described in Section 501(c)(3) of the | ||||||
7 | Internal Revenue Code, is exempt from federal income tax | ||||||
8 | under Section 501(a) of the Internal Revenue Code, does | ||||||
9 | not operate in a commercial context, and does all of the | ||||||
10 | following: | ||||||
11 | (1) Promotes affordable housing or provides home | ||||||
12 | ownership education or similar services. | ||||||
13 | (2) Conducts its activities in a manner that | ||||||
14 | serves public or charitable purposes. | ||||||
15 | (3) Receives funding and revenue and charges fees | ||||||
16 | in a manner that does not create an incentive for | ||||||
17 | itself or its employees to act other than in the best | ||||||
18 | interests of its clients. | ||||||
19 | (4) Compensates its employees in a manner that | ||||||
20 | does not create an incentive for its employees to act | ||||||
21 | other than in the best interests of its clients. | ||||||
22 | (5) Provides to, or identifies for, the borrower | ||||||
23 | residential mortgage loans with terms favorable to the | ||||||
24 | borrower and comparable to residential mortgage loans | ||||||
25 | and housing assistance provided under government | ||||||
26 | housing assistance programs. |
| |||||||
| |||||||
1 | (bbb) "Remote location" means a location at which the | ||||||
2 | employees of a licensee may conduct business other than | ||||||
3 | the principal place of business or the full service | ||||||
4 | office. | ||||||
5 | The Commissioner may define by rule and regulation any | ||||||
6 | terms used
in this Act for the efficient and clear | ||||||
7 | administration of this Act. | ||||||
8 | (Source: P.A. 100-783, eff. 8-10-18; 100-851, eff. 8-14-18; | ||||||
9 | 100-1153, eff. 12-19-18; 101-81, eff. 7-12-19.)
| ||||||
10 | (205 ILCS 635/7-16 new) | ||||||
11 | Sec. 7-16. Remote location flexibility. | ||||||
12 | (a) Notwithstanding anything to the contrary under the | ||||||
13 | laws of the State of Illinois, including subsection (c), | ||||||
14 | nothing in this Act shall be interpreted to prohibit employees | ||||||
15 | of a licensee from performing licensable activities at their | ||||||
16 | residence or another remote location in accordance with the | ||||||
17 | licensee's written supervisory policies and procedures. | ||||||
18 | (b) Licensable activities from a remote location shall
be | ||||||
19 | permitted when under the supervision of the licensee
and when | ||||||
20 | all of the following apply: | ||||||
21 | (1) the licensee has written policies and
procedures | ||||||
22 | for supervision of employees working from
their residence | ||||||
23 | or a location other than a licensed
location; | ||||||
24 | (2) access to company platforms and customer
| ||||||
25 | information shall be in accordance with the licensee's
|
| |||||||
| |||||||
1 | comprehensive written information security plan; | ||||||
2 | (3) no in-person customer interaction shall occur
at | ||||||
3 | an employee's residence unless the residence is a
licensed | ||||||
4 | location; and | ||||||
5 | (4) physical records shall not be maintained at a | ||||||
6 | remote location. | ||||||
7 | (c) The Department of Financial and Professional | ||||||
8 | Regulation may adopt rules to establish requirements and | ||||||
9 | standards relating to remote locations. ".
|