Bill Text: IL HB0527 | 2017-2018 | 100th General Assembly | Introduced

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Bill Title: Amends the Residential Mortgage License Act of 1987. Provides that an entity engaged solely in independent loan processing or underwriting is exempted from certain licensing requirements. Provides that those entities engaged solely in independent loan processing or underwriting shall submit an annual application for registration as an exempt entity with the Department of Financial and Professional Regulation through the Nationwide Mortgage Licensing System and Registry and comply with specific requirements. Adds those entities to the definition of "exempt person or entity". Excludes independent loan processing or underwriting from the definition of "soliciting, processing, placing, or negotiating a residential mortgage loan", "loan brokering", "brokering", or "brokerage services". Excludes independent loan processing or underwriting from the definition of "originating". Defines "independent loan processing or underwriting". Effective immediately.

Sponsorship: Partisan Bill (Republican 1)

Status: (Failed) 2019-01-08 - Session Sine Die [HB0527 Detail]

Download: Illinois-2017-HB0527-Introduced.html

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100TH GENERAL ASSEMBLY State of Illinois 2017 and 2018 HB0527 Introduced , by Rep. Margo McDermed SYNOPSIS AS INTRODUCED:
205 ILCS 635/1-3 from Ch. 17, par. 2321-3
205 ILCS 635/1-4
Amends the Residential Mortgage License Act of 1987. Provides that an entity engaged solely in independent loan processing or underwriting is exempted from certain licensing requirements. Provides that those entities engaged solely in independent loan processing or underwriting shall submit an annual application for registration as an exempt entity with the Department of Financial and Professional Regulation through the Nationwide Mortgage Licensing System and Registry and comply with specific requirements. Adds those entities to the definition of "exempt person or entity". Excludes independent loan processing or underwriting from the definition of "soliciting, processing, placing, or negotiating a residential mortgage loan", "loan brokering", "brokering", or "brokerage services". Excludes independent loan processing or underwriting from the definition of "originating". Defines "independent loan processing or underwriting". Effective immediately.
LRB100 06709 SMS 16750 b
A BILL FOR
HB0527 LRB100 06709 SMS 16750 b
AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Residential Mortgage License Act of 1987 is
amended by changing Sections 1-3 and 1-4 as follows:
(205 ILCS 635/1-3) (from Ch. 17, par. 2321-3)
Sec. 1-3. Necessity for license; scope of Act.
(a) No person, partnership, association, corporation or
other entity shall engage in the business of brokering,
funding, originating, servicing or purchasing of residential
mortgage loans without first obtaining a license from the
Secretary in accordance with the licensing procedure provided
in this Article I and such regulations as may be promulgated by
the Secretary. The licensing provisions of this Section shall
not apply to any entity engaged solely in commercial mortgage
lending, any entity engaged solely in independent loan
processing or underwriting, or to any person, partnership,
association, corporation, or other entity exempted pursuant to
Section 1-4, subsection (d), of this Act or in accordance with
regulations promulgated by the Secretary hereunder. No
provision of this Act shall apply to an exempt person or entity
as defined in items (1) and (1.5) of subsection (d) of Section
1-4 of this Act. Notwithstanding anything to the contrary in

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the preceding sentence, an individual acting as a mortgage loan
originator who is not employed by and acting for an entity
described in item (1) of subsection (tt) of Section 1-4 of this
Act shall be subject to the mortgage loan originator licensing
requirements of Article VII of this Act.
Effective January 1, 2011, no provision of this Act shall
apply to an exempt person or entity as defined in item (1.8) of
subsection (d) of Section 1-4 of this Act. Notwithstanding
anything to the contrary in the preceding sentence, an
individual acting as a mortgage loan originator who is not
employed by and acting for an entity described in item (1) of
subsection (tt) of Section 1-4 of this Act shall be subject to
the mortgage loan originator licensing requirements of Article
VII of this Act, and provided that an individual acting as a
mortgage loan originator under item (1.8) of subsection (d) of
Section 1-4 of this Act shall be further subject to a
determination by the U.S. Department of Housing and Urban
Development through final rulemaking or other authorized
agency determination under the federal Secure and Fair
Enforcement for Mortgage Licensing Act of 2008.
(a-1) A person who is exempt from licensure pursuant to
paragraph (ii) of item (1) of subsection (d) of Section 1-4 of
this Act as a federally chartered savings bank that is
registered with the Nationwide Mortgage Licensing System and
Registry may apply to the Secretary for an exempt company
registration for the purpose of sponsoring one or more

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individuals subject to the mortgage loan originator licensing
requirements of Article VII of this Act. Registration with the
Division of Banking of the Department shall not affect the
exempt status of the applicant.
(1) A mortgage loan originator eligible for licensure
under this subsection shall (A) be covered under an
exclusive written contract with, and originate residential
mortgage loans solely on behalf of, that exempt person; and
(B) hold a current, valid insurance producer license under
Article XXXI of the Illinois Insurance Code.
(2) An exempt person shall: (A) fulfill any reporting
requirements required by the Nationwide Mortgage Licensing
System and Registry or the Secretary; (B) provide a blanket
surety bond pursuant to Section 7-12 of this Act covering
the activities of all its sponsored mortgage loan
originators; (C) reasonably supervise the activities of
all its sponsored mortgage loan originators; (D) comply
with all rules and orders (including the averments
contained in Section 2-4 of this Act as applicable to a
non-licensed exempt entity provided for in this Section)
that the Secretary deems necessary to ensure compliance
with the federal SAFE Act; and (E) pay an annual
registration fee established by the Director.
(3) The Secretary may deny an exempt company
registration to an exempt person or fine, suspend, or
revoke an exempt company registration if the Secretary

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finds one of the following:
(A) that the exempt person is not a person of
honesty, truthfulness, or good character;
(B) that the exempt person violated any applicable
law, rule, or order;
(C) that the exempt person refused or failed to
furnish, within a reasonable time, any information or
make any report that may be required by the Secretary;
(D) that the exempt person had a final judgment
entered against him or her in a civil action on grounds
of fraud, deceit, or misrepresentation, and the
conduct on which the judgment is based indicates that
it would be contrary to the interest of the public to
permit the exempt person to manage a loan originator;
(E) that the exempt person had an order entered
against him or her involving fraud, deceit, or
misrepresentation by an administrative agency of this
State, the federal government, or any other state or
territory of the United States, and the facts relating
to the order indicate that it would be contrary to the
interest of the public to permit the exempt person to
manage a loan originator;
(F) that the exempt person made a material
misstatement or suppressed or withheld information on
the application for an exempt company registration or
any document required to be filed with the Secretary;

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or
(G) that the exempt person violated Section 4-5 of
this Act.
(a-2) An entity engaged solely in independent loan
processing or underwriting shall submit an annual application
for registration as an exempt entity with the Department
through the Nationwide Mortgage Licensing System and Registry
and shall comply with the requirements of the federal Secure
and Fair Enforcement for Mortgage Licensing Act of 2008, 12 CFR
Part 1008, and those requirements as established by the
Director under this Act, including, but not limited to, having
fidelity commercial crime insurance in the amount of $50,000.
(b) No person, partnership, association, corporation, or
other entity except a licensee under this Act or an entity
exempt from licensing pursuant to Section 1-4, subsection (d),
of this Act shall do any business under any name or title, or
circulate or use any advertising or make any representation or
give any information to any person, which indicates or
reasonably implies activity within the scope of this Act.
(c) The Secretary may, through the Attorney General,
request the circuit court of either Cook or Sangamon County to
issue an injunction to restrain any person from violating or
continuing to violate any of the foregoing provisions of this
Section.
(d) When the Secretary has reasonable cause to believe that
any entity which has not submitted an application for licensure

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is conducting any of the activities described in subsection (a)
hereof, the Secretary shall have the power to examine all books
and records of the entity and any additional documentation
necessary in order to determine whether such entity should
become licensed under this Act.
(d-1) The Secretary may issue orders against any person if
the Secretary has reasonable cause to believe that an unsafe,
unsound, or unlawful practice has occurred, is occurring, or is
about to occur, if any person has violated, is violating, or is
about to violate any law, rule, or written agreement with the
Secretary, or for the purposes of administering the provisions
of this Act and any rule adopted in accordance with this Act.
(e) Any person, partnership, association, corporation or
other entity who violates any provision of this Section commits
a business offense and shall be fined an amount not to exceed
$25,000. A mortgage loan brokered, funded, originated,
serviced, or purchased by a party who is not licensed under
this Section shall not be held to be invalid solely on the
basis of a violation under this Section. The changes made to
this Section by this amendatory Act of the 99th General
Assembly are declarative of existing law.
(f) Each person, partnership, association, corporation or
other entity conducting activities regulated by this Act shall
be issued one license. Each office, place of business or
location at which a residential mortgage licensee conducts any
part of his or her business must be recorded with the Secretary

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pursuant to Section 2-8 of this Act.
(g) Licensees under this Act shall solicit, broker, fund,
originate, service and purchase residential mortgage loans
only in conformity with the provisions of this Act and such
rules and regulations as may be promulgated by the Secretary.
(h) This Act applies to all entities doing business in
Illinois as residential mortgage bankers, as defined by "An Act
to provide for the regulation of mortgage bankers", approved
September 15, 1977, as amended, regardless of whether licensed
under that or any prior Act. Any existing residential mortgage
lender or residential mortgage broker in Illinois whether or
not previously licensed, must operate in accordance with this
Act.
(i) This Act is a successor Act to and a continuance of the
regulation of residential mortgage bankers provided in, "An Act
to provide for the regulation of mortgage bankers", approved
September 15, 1977, as amended.
Entities and persons subject to the predecessor Act shall
be subject to this Act from and after its effective date.
(Source: P.A. 98-492, eff. 8-16-13; 99-113, eff. 7-23-15.)
(205 ILCS 635/1-4)
Sec. 1-4. Definitions. The following words and phrases have
the meanings given to them in this Section:
(a) "Residential real property" or "residential real
estate" shall mean any real property located in Illinois,

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upon which is constructed or intended to be constructed a
dwelling. Those terms include a manufactured home as
defined in subdivision (53) of Section 9-102 of the Uniform
Commercial Code which is real property as defined in
Section 5-35 of the Conveyance and Encumbrance of
Manufactured Homes as Real Property and Severance Act.
(b) "Making a residential mortgage loan" or "funding a
residential mortgage loan" shall mean for compensation or
gain, either directly or indirectly, advancing funds or
making a commitment to advance funds to a loan applicant
for a residential mortgage loan.
(c) "Soliciting, processing, placing, or negotiating a
residential mortgage loan", with the exception of
independent loan processing or underwriting as contained
in Section 1-3, shall mean for compensation or gain, either
directly or indirectly, accepting or offering to accept an
application for a residential mortgage loan, assisting or
offering to assist in the processing of an application for
a residential mortgage loan on behalf of a borrower, or
negotiating or offering to negotiate the terms or
conditions of a residential mortgage loan with a lender on
behalf of a borrower including, but not limited to, the
submission of credit packages for the approval of lenders,
the preparation of residential mortgage loan closing
documents, including a closing in the name of a broker.
(d) "Exempt person or entity" shall mean the following:

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(1) (i) Any banking organization or foreign
banking corporation licensed by the Illinois
Commissioner of Banks and Real Estate or the United
States Comptroller of the Currency to transact
business in this State; (ii) any national bank,
federally chartered savings and loan association,
federal savings bank, federal credit union; (iii)
(blank); (iv) any bank, savings and loan association,
savings bank, or credit union organized under the laws
of this or any other state; (v) any Illinois Consumer
Installment Loan Act licensee; (vi) any insurance
company authorized to transact business in this State;
(vii) any entity engaged solely in commercial mortgage
lending or any entity engaged solely in independent
loan processing or underwriting; (viii) any service
corporation of a savings and loan association or
savings bank organized under the laws of this State or
the service corporation of a federally chartered
savings and loan association or savings bank having its
principal place of business in this State, other than a
service corporation licensed or entitled to
reciprocity under the Real Estate License Act of 2000;
or (ix) any first tier subsidiary of a bank, the
charter of which is issued under the Illinois Banking
Act by the Illinois Commissioner of Banks and Real
Estate, or the first tier subsidiary of a bank

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chartered by the United States Comptroller of the
Currency and that has its principal place of business
in this State, provided that the first tier subsidiary
is regularly examined by the Illinois Commissioner of
Banks and Real Estate or the Comptroller of the
Currency, or a consumer compliance examination is
regularly conducted by the Federal Reserve Board.
(1.5) Any employee of a person or entity mentioned
in item (1) of this subsection, when acting for such
person or entity, or any registered mortgage loan
originator when acting for an entity described in
subsection (tt) of this Section.
(1.8) Any person or entity that does not originate
mortgage loans in the ordinary course of business, but
makes or acquires residential mortgage loans with his
or her own funds for his or her or its own investment
without intent to make, acquire, or resell more than 3
residential mortgage loans in any one calendar year.
(2) (Blank).
(3) Any person employed by a licensee to assist in
the performance of the residential mortgage licensee's
activities regulated by this Act who is compensated in
any manner by only one licensee.
(4) (Blank).
(5) Any individual, corporation, partnership, or
other entity that originates, services, or brokers

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residential mortgage loans, as these activities are
defined in this Act, and who or which receives no
compensation for those activities, subject to the
Commissioner's regulations and the federal Secure and
Fair Enforcement for Mortgage Licensing Act of 2008 and
the rules promulgated under that Act with regard to the
nature and amount of compensation.
(6) (Blank).
(e) "Licensee" or "residential mortgage licensee"
shall mean a person, partnership, association,
corporation, or any other entity who or which is licensed
pursuant to this Act to engage in the activities regulated
by this Act.
(f) "Mortgage loan" "residential mortgage loan" or
"home mortgage loan" shall mean any loan primarily for
personal, family, or household use that is secured by a
mortgage, deed of trust, or other equivalent consensual
security interest on a dwelling as defined in Section
103(v) of the federal Truth in Lending Act, or residential
real estate upon which is constructed or intended to be
constructed a dwelling.
(g) "Lender" shall mean any person, partnership,
association, corporation, or any other entity who either
lends or invests money in residential mortgage loans.
(h) "Ultimate equitable owner" shall mean a person who,
directly or indirectly, owns or controls an ownership

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interest in a corporation, foreign corporation, alien
business organization, trust, or any other form of business
organization regardless of whether the person owns or
controls the ownership interest through one or more persons
or one or more proxies, powers of attorney, nominees,
corporations, associations, partnerships, trusts, joint
stock companies, or other entities or devices, or any
combination thereof.
(i) "Residential mortgage financing transaction" shall
mean the negotiation, acquisition, sale, or arrangement
for or the offer to negotiate, acquire, sell, or arrange
for, a residential mortgage loan or residential mortgage
loan commitment.
(j) "Personal residence address" shall mean a street
address and shall not include a post office box number.
(k) "Residential mortgage loan commitment" shall mean
a contract for residential mortgage loan financing.
(l) "Party to a residential mortgage financing
transaction" shall mean a borrower, lender, or loan broker
in a residential mortgage financing transaction.
(m) "Payments" shall mean payment of all or any of the
following: principal, interest and escrow reserves for
taxes, insurance and other related reserves, and
reimbursement for lender advances.
(n) "Commissioner" shall mean the Commissioner of
Banks and Real Estate, except that, beginning on April 6,

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2009 (the effective date of Public Act 95-1047), all
references in this Act to the Commissioner of Banks and
Real Estate are deemed, in appropriate contexts, to be
references to the Secretary of Financial and Professional
Regulation, or his or her designee, including the Director
of the Division of Banking of the Department of Financial
and Professional Regulation.
(n-1) "Director" shall mean the Director of the
Division of Banking of the Department of Financial and
Professional Regulation, except that, beginning on July
31, 2009 (the effective date of Public Act 96-112), all
references in this Act to the Director are deemed, in
appropriate contexts, to be the Secretary of Financial and
Professional Regulation, or his or her designee, including
the Director of the Division of Banking of the Department
of Financial and Professional Regulation.
(o) "Loan brokering", "brokering", or "brokerage
service" shall mean the act of helping to obtain from
another entity, for a borrower, a loan secured by
residential real estate situated in Illinois or assisting a
borrower in obtaining a loan secured by residential real
estate situated in Illinois in return for consideration to
be paid by either the borrower or the lender including, but
not limited to, contracting for the delivery of residential
mortgage loans to a third party lender and soliciting,
processing, placing, or negotiating residential mortgage

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loans, but does not include independent loan processing or
underwriting as defined in this Section.
(p) "Loan broker" or "broker" shall mean a person,
partnership, association, corporation, or limited
liability company, other than those persons, partnerships,
associations, corporations, or limited liability companies
exempted from licensing pursuant to Section 1-4,
subsection (d), of this Act, who performs the activities
described in subsections (c), (o), and (yy) of this
Section.
(q) "Servicing" shall mean the collection or
remittance for or the right or obligation to collect or
remit for any lender, noteowner, noteholder, or for a
licensee's own account, of payments, interests, principal,
and trust items such as hazard insurance and taxes on a
residential mortgage loan in accordance with the terms of
the residential mortgage loan; and includes loan payment
follow-up, delinquency loan follow-up, loan analysis and
any notifications to the borrower that are necessary to
enable the borrower to keep the loan current and in good
standing. "Servicing" includes management of third-party
entities acting on behalf of a residential mortgage
licensee for the collection of delinquent payments and the
use by such third-party entities of said licensee's
servicing records or information, including their use in
foreclosure.

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(r) "Full service office" shall mean an office,
provided by the licensee and not subleased from the
licensee's employees, and staff in Illinois reasonably
adequate to handle efficiently communications, questions,
and other matters relating to any application for, or an
existing home mortgage secured by residential real estate
situated in Illinois with respect to which the licensee is
brokering, funding originating, purchasing, or servicing.
The management and operation of each full service office
must include observance of good business practices such as
proper signage; adequate, organized, and accurate books
and records; ample phone lines, hours of business, staff
training and supervision, and provision for a mechanism to
resolve consumer inquiries, complaints, and problems. The
Commissioner shall issue regulations with regard to these
requirements and shall include an evaluation of compliance
with this Section in his or her periodic examination of
each licensee.
(s) "Purchasing" shall mean the purchase of
conventional or government-insured mortgage loans secured
by residential real estate situated in Illinois from either
the lender or from the secondary market.
(t) "Borrower" shall mean the person or persons who
seek the services of a loan broker, originator, or lender.
(u) "Originating" shall mean the issuing of
commitments for and funding of residential mortgage loans,

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but does not include independent loan processing or
underwriting as defined in this Section.
(v) "Loan brokerage agreement" shall mean a written
agreement in which a broker or loan broker agrees to do
either of the following:
(1) obtain a residential mortgage loan for the
borrower or assist the borrower in obtaining a
residential mortgage loan; or
(2) consider making a residential mortgage loan to
the borrower.
(w) "Advertisement" shall mean the attempt by
publication, dissemination, or circulation to induce,
directly or indirectly, any person to enter into a
residential mortgage loan agreement or residential
mortgage loan brokerage agreement relative to a mortgage
secured by residential real estate situated in Illinois.
(x) "Residential Mortgage Board" shall mean the
Residential Mortgage Board created in Section 1-5 of this
Act.
(y) "Government-insured mortgage loan" shall mean any
mortgage loan made on the security of residential real
estate insured by the Department of Housing and Urban
Development or Farmers Home Loan Administration, or
guaranteed by the Veterans Administration.
(z) "Annual audit" shall mean a certified audit of the
licensee's books and records and systems of internal

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control performed by a certified public accountant in
accordance with generally accepted accounting principles
and generally accepted auditing standards.
(aa) "Financial institution" shall mean a savings and
loan association, savings bank, credit union, or a bank
organized under the laws of Illinois or a savings and loan
association, savings bank, credit union or a bank organized
under the laws of the United States and headquartered in
Illinois.
(bb) "Escrow agent" shall mean a third party,
individual or entity charged with the fiduciary obligation
for holding escrow funds on a residential mortgage loan
pending final payout of those funds in accordance with the
terms of the residential mortgage loan.
(cc) "Net worth" shall have the meaning ascribed
thereto in Section 3-5 of this Act.
(dd) "Affiliate" shall mean:
(1) any entity that directly controls or is
controlled by the licensee and any other company that
is directly affecting activities regulated by this Act
that is controlled by the company that controls the
licensee;
(2) any entity:
(A) that is controlled, directly or
indirectly, by a trust or otherwise, by or for the
benefit of shareholders who beneficially or

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otherwise control, directly or indirectly, by
trust or otherwise, the licensee or any company
that controls the licensee; or
(B) a majority of the directors or trustees of
which constitute a majority of the persons holding
any such office with the licensee or any company
that controls the licensee;
(3) any company, including a real estate
investment trust, that is sponsored and advised on a
contractual basis by the licensee or any subsidiary or
affiliate of the licensee.
(ee) "First tier subsidiary" shall be defined by
regulation incorporating the comparable definitions used
by the Office of the Comptroller of the Currency and the
Illinois Commissioner of Banks and Real Estate.
(ff) "Gross delinquency rate" means the quotient
determined by dividing (1) the sum of (i) the number of
government-insured residential mortgage loans funded or
purchased by a licensee in the preceding calendar year that
are delinquent and (ii) the number of conventional
residential mortgage loans funded or purchased by the
licensee in the preceding calendar year that are delinquent
by (2) the sum of (i) the number of government-insured
residential mortgage loans funded or purchased by the
licensee in the preceding calendar year and (ii) the number
of conventional residential mortgage loans funded or

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purchased by the licensee in the preceding calendar year.
(gg) "Delinquency rate factor" means the factor set by
rule of the Commissioner that is multiplied by the average
gross delinquency rate of licensees, determined annually
for the immediately preceding calendar year, for the
purpose of determining which licensees shall be examined by
the Commissioner pursuant to subsection (b) of Section 4-8
of this Act.
(hh) "Loan originator" means any natural person who,
for compensation or in the expectation of compensation,
either directly or indirectly makes, offers to make,
solicits, places, or negotiates a residential mortgage
loan. This definition applies only to Section 7-1 of this
Act.
(ii) "Confidential supervisory information" means any
report of examination, visitation, or investigation
prepared by the Commissioner under this Act, any report of
examination visitation, or investigation prepared by the
state regulatory authority of another state that examines a
licensee, any document or record prepared or obtained in
connection with or relating to any examination,
visitation, or investigation, and any record prepared or
obtained by the Commissioner to the extent that the record
summarizes or contains information derived from any
report, document, or record described in this subsection.
"Confidential supervisory information" does not include

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any information or record routinely prepared by a licensee
and maintained in the ordinary course of business or any
information or record that is required to be made publicly
available pursuant to State or federal law or rule.
(jj) "Mortgage loan originator" means an individual
who for compensation or gain or in the expectation of
compensation or gain:
(i) takes a residential mortgage loan application;
or
(ii) offers or negotiates terms of a residential
mortgage loan.
"Mortgage loan originator" includes an individual
engaged in loan modification activities as defined in
subsection (yy) of this Section. A mortgage loan originator
engaged in loan modification activities shall report those
activities to the Department of Financial and Professional
Regulation in the manner provided by the Department;
however, the Department shall not impose a fee for
reporting, nor require any additional qualifications to
engage in those activities beyond those provided pursuant
to this Act for mortgage loan originators.
"Mortgage loan originator" does not include an
individual engaged solely as a loan processor or
underwriter except as otherwise provided in subsection (d)
of Section 7-1A of this Act.
"Mortgage loan originator" does not include a person or

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entity that only performs real estate brokerage activities
and is licensed in accordance with the Real Estate License
Act of 2000, unless the person or entity is compensated by
a lender, a mortgage broker, or other mortgage loan
originator, or by any agent of that lender, mortgage
broker, or other mortgage loan originator.
"Mortgage loan originator" does not include a person or
entity solely involved in extensions of credit relating to
timeshare plans, as that term is defined in Section
101(53D) of Title 11, United States Code.
(kk) "Depository institution" has the same meaning as
in Section 3 of the Federal Deposit Insurance Act, and
includes any credit union.
(ll) "Dwelling" means a residential structure or
mobile home which contains one to 4 family housing units,
or individual units of condominiums or cooperatives.
(mm) "Immediate family member" means a spouse, child,
sibling, parent, grandparent, or grandchild, and includes
step-parents, step-children, step-siblings, or adoptive
relationships.
(nn) "Individual" means a natural person.
(oo) "Loan processor or underwriter" means an
individual who performs clerical or support duties as an
employee at the direction of and subject to the supervision
and instruction of a person licensed, or exempt from
licensing, under this Act. "Clerical or support duties"

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includes subsequent to the receipt of an application:
(i) the receipt, collection, distribution, and
analysis of information common for the processing or
underwriting of a residential mortgage loan; and
(ii) communicating with a consumer to obtain the
information necessary for the processing or
underwriting of a loan, to the extent that the
communication does not include offering or negotiating
loan rates or terms, or counseling consumers about
residential mortgage loan rates or terms. An
individual engaging solely in loan processor or
underwriter activities shall not represent to the
public, through advertising or other means of
communicating or providing information, including the
use of business cards, stationery, brochures, signs,
rate lists, or other promotional items, that the
individual can or will perform any of the activities of
a mortgage loan originator.
(pp) "Nationwide Mortgage Licensing System and
Registry" means a mortgage licensing system developed and
maintained by the Conference of State Bank Supervisors and
the American Association of Residential Mortgage
Regulators for the licensing and registration of licensed
mortgage loan originators.
(qq) "Nontraditional mortgage product" means any
mortgage product other than a 30-year fixed rate mortgage.

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(rr) "Person" means a natural person, corporation,
company, limited liability company, partnership, or
association.
(ss) "Real estate brokerage activity" means any
activity that involves offering or providing real estate
brokerage services to the public, including:
(1) acting as a real estate agent or real estate
broker for a buyer, seller, lessor, or lessee of real
property;
(2) bringing together parties interested in the
sale, purchase, lease, rental, or exchange of real
property;
(3) negotiating, on behalf of any party, any
portion of a contract relating to the sale, purchase,
lease, rental, or exchange of real property, other than
in connection with providing financing with respect to
any such transaction;
(4) engaging in any activity for which a person
engaged in the activity is required to be registered or
licensed as a real estate agent or real estate broker
under any applicable law; or
(5) offering to engage in any activity, or act in
any capacity, described in this subsection (ss).
(tt) "Registered mortgage loan originator" means any
individual that:
(1) meets the definition of mortgage loan

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originator and is an employee of:
(A) a depository institution;
(B) a subsidiary that is:
(i) owned and controlled by a depository
institution; and
(ii) regulated by a federal banking
agency; or
(C) an institution regulated by the Farm
Credit Administration; and
(2) is registered with, and maintains a unique
identifier through, the Nationwide Mortgage Licensing
System and Registry.
(uu) "Unique identifier" means a number or other
identifier assigned by protocols established by the
Nationwide Mortgage Licensing System and Registry.
(vv) "Residential mortgage license" means a license
issued pursuant to Section 1-3, 2-2, or 2-6 of this Act.
(ww) "Mortgage loan originator license" means a
license issued pursuant to Section 7-1A, 7-3, or 7-6 of
this Act.
(xx) "Secretary" means the Secretary of the Department
of Financial and Professional Regulation, or a person
authorized by the Secretary or by this Act to act in the
Secretary's stead.
(yy) "Loan modification" means, for compensation or
gain, either directly or indirectly offering or

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negotiating on behalf of a borrower or homeowner to adjust
the terms of a residential mortgage loan in a manner not
provided for in the original or previously modified
mortgage loan.
(zz) "Short sale facilitation" means, for compensation
or gain, either directly or indirectly offering or
negotiating on behalf of a borrower or homeowner to
facilitate the sale of residential real estate subject to
one or more residential mortgage loans or debts
constituting liens on the property in which the proceeds
from selling the residential real estate will fall short of
the amount owed and the lien holders are contacted to agree
to release their lien on the residential real estate and
accept less than the full amount owed on the debt.
(aaa) "Independent loan processing or underwriting"
means the activity or activities of an entity engaged in
solely for the purpose of sponsoring a licensed mortgage
loan originator independent loan processor or a licensed
mortgage loan originator independent loan underwriter
pursuant to Section 7-1A of this Act.
The Commissioner may define by rule and regulation any
terms used in this Act for the efficient and clear
administration of this Act.
(Source: P.A. 98-749, eff. 7-16-14; 98-1081, eff. 1-1-15;
99-78, eff. 7-20-15.)
Section 99. Effective date. This Act takes effect upon

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becoming law.