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Sen. Jacqueline Y. Collins
Filed: 5/20/2014
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1 | | AMENDMENT TO HOUSE BILL 5685
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2 | | AMENDMENT NO. ______. Amend House Bill 5685 on page 23, |
3 | | line 5, by changing "Section" to "Sections 1-4, 2-2, 2-4, 3-2, |
4 | | and"; and
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5 | | on page 23, by inserting immediately below line 6 the |
6 | | following:
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7 | | "(205 ILCS 635/1-4) |
8 | | Sec. 1-4. Definitions. |
9 | | (a) "Residential real property" or "residential real |
10 | | estate" shall mean any real property located in Illinois, upon |
11 | | which is constructed or intended to be constructed a dwelling. |
12 | | (b) "Making a residential mortgage loan" or "funding a |
13 | | residential mortgage
loan" shall mean for compensation or gain, |
14 | | either directly or indirectly,
advancing funds or making a |
15 | | commitment to advance funds to a loan applicant
for a |
16 | | residential mortgage loan. |
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1 | | (c) "Soliciting, processing, placing, or negotiating a |
2 | | residential
mortgage loan" shall mean for compensation or gain, |
3 | | either directly or
indirectly, accepting or offering to accept |
4 | | an application for a
residential mortgage loan, assisting or |
5 | | offering to assist in the
processing of an application for a |
6 | | residential mortgage loan on behalf of a
borrower, or |
7 | | negotiating or offering to negotiate the terms or conditions
of |
8 | | a residential mortgage loan with a lender on behalf of a |
9 | | borrower
including, but not limited to, the submission of |
10 | | credit packages for the
approval of lenders, the preparation of |
11 | | residential mortgage loan closing
documents, including a |
12 | | closing in the name of a broker. |
13 | | (d) "Exempt person or entity" shall mean the following: |
14 | | (1) (i) Any banking organization or foreign banking |
15 | | corporation
licensed by the Illinois Commissioner of Banks |
16 | | and Real Estate or the
United States Comptroller of the |
17 | | Currency to transact business in this
State; (ii) any |
18 | | national bank, federally chartered savings and loan
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19 | | association, federal savings bank, federal credit union; |
20 | | (iii) (blank); any pension
trust, bank trust, or bank trust |
21 | | company; (iv) any bank, savings and loan
association, |
22 | | savings bank, or credit union organized under the laws of |
23 | | this
or any other state; (v) any Illinois Consumer |
24 | | Installment Loan Act licensee;
(vi) any insurance company |
25 | | authorized to transact business in this State;
(vii) any |
26 | | entity engaged solely in commercial mortgage lending; |
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1 | | (viii) any
service corporation of a savings and loan |
2 | | association or savings bank organized
under the laws of |
3 | | this State or the service corporation of a federally
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4 | | chartered savings and loan association or savings bank |
5 | | having
its principal place of business in this State, other |
6 | | than a service
corporation licensed or entitled to |
7 | | reciprocity under the Real Estate
License Act of 2000; or |
8 | | (ix) any first tier subsidiary of a
bank, the charter of |
9 | | which is issued under the Illinois Banking Act
by the |
10 | | Illinois Commissioner of Banks and Real Estate,
or the |
11 | | first tier subsidiary of a bank chartered by the United |
12 | | States
Comptroller of the Currency and that has its |
13 | | principal place of business
in this State, provided that |
14 | | the first tier subsidiary is regularly
examined by the |
15 | | Illinois Commissioner of Banks and Real Estate
or the |
16 | | Comptroller of the Currency, or a consumer compliance |
17 | | examination is
regularly conducted by the Federal Reserve |
18 | | Board. |
19 | | (1.5) Any employee of a person or entity mentioned in
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20 | | item (1) of this subsection, when acting for such person or |
21 | | entity, or any registered mortgage loan originator when |
22 | | acting for an entity described in subsection (tt) of this |
23 | | Section. |
24 | | (1.8) Any person or entity that does not originate |
25 | | mortgage loans in the ordinary course of business, but |
26 | | makes or acquires residential mortgage loans with his or |
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1 | | her own funds for his or her or its own investment without |
2 | | intent to make, acquire, or resell more than 3 residential |
3 | | mortgage loans in any one calendar year. |
4 | | (2) (Blank). |
5 | | (3) Any person employed by a licensee to assist in the |
6 | | performance of
the residential mortgage licensee's |
7 | | activities regulated by this Act who is compensated in any |
8 | | manner by
only one licensee. |
9 | | (4) (Blank). |
10 | | (5) Any individual, corporation, partnership, or other |
11 | | entity that
originates, services, or brokers residential |
12 | | mortgage loans, as these
activities are defined in this |
13 | | Act, and who or which receives no
compensation for those |
14 | | activities, subject to the Commissioner's
regulations and |
15 | | the federal Secure and Fair Enforcement for Mortgage |
16 | | Licensing Act of 2008 and the rules promulgated under that |
17 | | Act with regard to the nature and amount of compensation. |
18 | | (6) (Blank). |
19 | | (e) "Licensee" or "residential mortgage licensee" shall |
20 | | mean a person,
partnership, association, corporation, or any |
21 | | other entity who or which is
licensed pursuant to this Act to |
22 | | engage in the activities regulated by
this Act. |
23 | | (f) "Mortgage loan" "residential mortgage loan" or "home
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24 | | mortgage loan" shall mean any loan primarily for personal, |
25 | | family, or household use that is secured by a mortgage, deed of |
26 | | trust, or other equivalent consensual security interest on a |
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1 | | dwelling as defined in Section 103(v) of the federal Truth in |
2 | | Lending Act, or residential real estate upon which is |
3 | | constructed or intended to be constructed a dwelling. |
4 | | (g) "Lender" shall mean any person, partnership, |
5 | | association,
corporation, or any other entity who either lends |
6 | | or invests money in
residential mortgage loans. |
7 | | (h) "Ultimate equitable owner" shall mean a person who, |
8 | | directly
or indirectly, owns or controls an ownership interest |
9 | | in a corporation,
foreign corporation, alien business |
10 | | organization, trust, or any other form
of business organization |
11 | | regardless of whether the person owns or controls
the ownership |
12 | | interest through one or more persons or one or more proxies,
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13 | | powers of attorney, nominees, corporations, associations, |
14 | | partnerships,
trusts, joint stock companies, or other entities |
15 | | or devices, or any
combination thereof. |
16 | | (i) "Residential mortgage financing transaction" shall |
17 | | mean the negotiation,
acquisition, sale, or arrangement for or |
18 | | the offer to negotiate, acquire,
sell, or arrange for, a |
19 | | residential mortgage loan or residential mortgage
loan |
20 | | commitment. |
21 | | (j) "Personal residence address" shall mean a street |
22 | | address and shall
not include a post office box number. |
23 | | (k) "Residential mortgage loan commitment" shall mean a |
24 | | contract for
residential mortgage loan financing. |
25 | | (l) "Party to a residential mortgage financing |
26 | | transaction" shall mean a
borrower, lender, or loan broker in a |
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1 | | residential mortgage financing
transaction. |
2 | | (m) "Payments" shall mean payment of all or any of the |
3 | | following:
principal, interest and escrow reserves for taxes, |
4 | | insurance and other related
reserves, and reimbursement for |
5 | | lender advances. |
6 | | (n) "Commissioner" shall mean the Commissioner of Banks and |
7 | | Real Estate, except that, beginning on April 6, 2009 (the |
8 | | effective date of Public Act 95-1047), all references in this |
9 | | Act to the Commissioner of Banks and Real Estate are deemed, in |
10 | | appropriate contexts, to be references to the Secretary of |
11 | | Financial and Professional Regulation, or his or her designee, |
12 | | including the Director of the Division of Banking of the |
13 | | Department of Financial and Professional Regulation. |
14 | | (n-1) "Director" shall mean the Director of the Division of |
15 | | Banking of the Department of Financial and Professional |
16 | | Regulation, except that, beginning on July 31, 2009 (the |
17 | | effective date of Public Act 96-112), all references in this |
18 | | Act to the Director are deemed, in appropriate contexts, to be |
19 | | the Secretary of Financial and Professional Regulation, or his |
20 | | or her designee, including the Director of the Division of |
21 | | Banking of the Department of Financial and Professional |
22 | | Regulation. |
23 | | (o) "Loan brokering", "brokering", or "brokerage service" |
24 | | shall mean the act
of helping to obtain from another entity, |
25 | | for a borrower, a loan secured by
residential real estate |
26 | | situated in Illinois or assisting a borrower in
obtaining a |
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1 | | loan secured by residential real estate situated in Illinois in
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2 | | return for consideration to be paid by either the borrower or |
3 | | the lender
including, but not limited to, contracting for the |
4 | | delivery of residential
mortgage loans to a third party lender |
5 | | and soliciting, processing, placing,
or negotiating |
6 | | residential mortgage loans. |
7 | | (p) "Loan broker" or "broker" shall mean a person, |
8 | | partnership,
association, corporation, or limited liability |
9 | | company, other than
those persons, partnerships,
associations, |
10 | | corporations, or limited liability companies exempted
from |
11 | | licensing pursuant to Section
1-4, subsection (d), of this Act, |
12 | | who performs the activities described
in subsections (c), (o), |
13 | | and (yy) of this Section. |
14 | | (q) "Servicing" shall mean the collection or remittance for |
15 | | or the
right or obligation to collect or remit for any lender, |
16 | | noteowner,
noteholder, or for a licensee's own account, of |
17 | | payments, interests,
principal, and trust items such as hazard |
18 | | insurance and taxes on a
residential mortgage loan in |
19 | | accordance with the terms of the residential
mortgage loan; and |
20 | | includes loan payment follow-up, delinquency loan
follow-up, |
21 | | loan analysis and any notifications to the borrower that are
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22 | | necessary to enable the borrower to keep the loan current and |
23 | | in good standing. "Servicing" includes management of |
24 | | third-party entities acting on behalf of a residential mortgage |
25 | | licensee for the collection of delinquent payments and the use |
26 | | by such third-party entities of said licensee's servicing |
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1 | | records or information, including their use in foreclosure. |
2 | | (r) "Full service office" shall mean an office, provided by |
3 | | the licensee and not subleased from the licensee's employees, |
4 | | and staff in Illinois
reasonably adequate to handle efficiently |
5 | | communications, questions, and
other matters relating to any |
6 | | application for, or an existing home mortgage
secured by |
7 | | residential real estate situated in Illinois
with respect to |
8 | | which the licensee is brokering, funding originating,
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9 | | purchasing, or servicing. The management and operation of each |
10 | | full service
office must include observance of good business |
11 | | practices such as proper signage; adequate,
organized, and |
12 | | accurate books and records; ample phone lines, hours of
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13 | | business, staff training and supervision, and provision for a |
14 | | mechanism to
resolve consumer inquiries, complaints, and |
15 | | problems. The Commissioner
shall issue regulations with regard |
16 | | to these requirements and shall include
an evaluation of |
17 | | compliance with this Section in his or her periodic
examination |
18 | | of each licensee. |
19 | | (s) "Purchasing" shall mean the purchase of conventional or
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20 | | government-insured mortgage loans secured by residential real |
21 | | estate
situated in Illinois from either the lender or from the |
22 | | secondary market. |
23 | | (t) "Borrower" shall mean the person or persons who seek |
24 | | the services of
a loan broker, originator, or lender. |
25 | | (u) "Originating" shall mean the issuing of commitments for |
26 | | and funding of
residential mortgage loans. |
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1 | | (v) "Loan brokerage agreement" shall mean a written |
2 | | agreement in which a
broker or loan broker agrees to do either |
3 | | of the following: |
4 | | (1) obtain a residential mortgage loan for the borrower |
5 | | or assist the
borrower in obtaining a residential mortgage |
6 | | loan; or |
7 | | (2) consider making a residential mortgage loan to the |
8 | | borrower. |
9 | | (w) "Advertisement" shall mean the attempt by publication,
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10 | | dissemination, or circulation to induce, directly or |
11 | | indirectly,
any person to enter into a residential mortgage |
12 | | loan agreement or
residential mortgage loan brokerage |
13 | | agreement relative to a
mortgage secured by residential real |
14 | | estate situated in Illinois. |
15 | | (x) "Residential Mortgage Board" shall mean the |
16 | | Residential Mortgage
Board created in Section 1-5 of this Act. |
17 | | (y) "Government-insured mortgage loan" shall mean any |
18 | | mortgage loan made
on the security of residential real estate |
19 | | insured by the Department of
Housing and Urban Development or |
20 | | Farmers Home Loan Administration, or
guaranteed by the Veterans |
21 | | Administration. |
22 | | (z) "Annual audit" shall mean a certified audit of the |
23 | | licensee's books and
records and systems of internal control |
24 | | performed by a certified public
accountant in accordance with |
25 | | generally accepted accounting principles
and generally |
26 | | accepted auditing standards. |
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1 | | (aa) "Financial institution" shall mean a savings and loan
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2 | | association, savings bank, credit union, or a bank organized |
3 | | under the
laws of Illinois or a savings and loan association, |
4 | | savings bank,
credit union or a bank organized under the laws |
5 | | of the United States and
headquartered in Illinois. |
6 | | (bb) "Escrow agent" shall mean a third party, individual or |
7 | | entity
charged with the fiduciary obligation for holding escrow |
8 | | funds on a
residential mortgage loan pending final payout of |
9 | | those funds
in accordance with the terms of the residential |
10 | | mortgage loan. |
11 | | (cc) "Net worth" shall have the meaning ascribed thereto in |
12 | | Section 3-5
of this Act. |
13 | | (dd) "Affiliate" shall mean: |
14 | | (1) any entity that directly controls or is controlled |
15 | | by the licensee
and any other company that is directly |
16 | | affecting activities regulated by
this Act that is |
17 | | controlled by the company that controls the licensee; |
18 | | (2) any entity: |
19 | | (A) that is controlled, directly or indirectly, by |
20 | | a trust or otherwise,
by or for the benefit of |
21 | | shareholders who beneficially or otherwise
control, |
22 | | directly or indirectly, by trust or otherwise, the |
23 | | licensee or any
company that controls the licensee; or |
24 | | (B) a majority of the directors or trustees of |
25 | | which constitute a
majority of the persons holding any |
26 | | such office with the licensee or any
company that |
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1 | | controls the licensee; |
2 | | (3) any company, including a real estate investment |
3 | | trust, that is
sponsored and advised on a contractual basis |
4 | | by the licensee or any
subsidiary or affiliate of the |
5 | | licensee. |
6 | | The Commissioner may define by rule and regulation any |
7 | | terms used
in this Act for the efficient and clear |
8 | | administration of this Act. |
9 | | (ee) "First tier subsidiary" shall be defined by regulation
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10 | | incorporating the comparable definitions used by the Office of |
11 | | the
Comptroller of the Currency and the Illinois Commissioner |
12 | | of Banks
and Real Estate. |
13 | | (ff) "Gross delinquency rate" means the quotient |
14 | | determined by dividing
(1) the sum of (i) the number of |
15 | | government-insured residential mortgage loans
funded or |
16 | | purchased by a licensee in the preceding calendar year that are
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17 | | delinquent and (ii) the number of conventional residential |
18 | | mortgage loans
funded or purchased by the licensee in the |
19 | | preceding calendar year that are
delinquent by (2) the sum of |
20 | | (i) the number of government-insured residential
mortgage |
21 | | loans funded or purchased by the licensee in the preceding |
22 | | calendar
year and (ii) the number of conventional residential |
23 | | mortgage loans funded or
purchased by the licensee in the |
24 | | preceding calendar year. |
25 | | (gg) "Delinquency rate factor" means the factor set by rule |
26 | | of the
Commissioner that is multiplied by the average gross |
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1 | | delinquency rate of
licensees, determined annually for the |
2 | | immediately preceding calendar year, for
the purpose of |
3 | | determining which licensees shall be examined by the
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4 | | Commissioner pursuant to subsection (b) of Section 4-8 of this |
5 | | Act. |
6 | | (hh) "Loan originator" means any natural person who, for |
7 | | compensation or in
the expectation of compensation, either |
8 | | directly or indirectly makes, offers to
make, solicits, places, |
9 | | or negotiates a residential mortgage loan. This definition |
10 | | applies only to Section 7-1 of this Act. |
11 | | (ii) "Confidential supervisory information" means any |
12 | | report of examination, visitation, or investigation prepared |
13 | | by the Commissioner under this Act, any report of examination |
14 | | visitation, or investigation prepared by the state regulatory |
15 | | authority of another state that examines a licensee, any |
16 | | document or record prepared or obtained in connection with or |
17 | | relating to any examination, visitation, or investigation, and |
18 | | any record prepared or obtained by the Commissioner to the |
19 | | extent that the record summarizes or contains information |
20 | | derived from any report, document, or record described in this |
21 | | subsection. "Confidential supervisory information" does not |
22 | | include any information or record routinely prepared by a |
23 | | licensee and maintained in the ordinary course of business or |
24 | | any information or record that is required to be made publicly |
25 | | available pursuant to State or federal law or rule.
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26 | | (jj) "Mortgage loan originator" means an individual who for |
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1 | | compensation or gain or in the expectation of compensation or |
2 | | gain: |
3 | | (i) takes a residential mortgage loan application; or |
4 | | (ii) offers or negotiates terms of a residential |
5 | | mortgage loan. |
6 | | "Mortgage loan originator" includes an individual engaged |
7 | | in loan modification activities as defined in subsection (yy) |
8 | | of this Section. A mortgage loan originator engaged in loan |
9 | | modification activities shall report those activities to the |
10 | | Department of Financial and Professional Regulation in the |
11 | | manner provided by the Department; however, the Department |
12 | | shall not impose a fee for reporting, nor require any |
13 | | additional qualifications to engage in those activities beyond |
14 | | those provided pursuant to this Act for mortgage loan |
15 | | originators. |
16 | | "Mortgage loan originator" does not include an individual |
17 | | engaged solely as a loan processor or underwriter except as |
18 | | otherwise provided in subsection (d) of Section 7-1A of this |
19 | | Act. |
20 | | "Mortgage loan originator" does not include a person or |
21 | | entity that only performs real estate brokerage activities and |
22 | | is licensed in accordance with the Real Estate License Act of |
23 | | 2000, unless the person or entity is compensated by a lender, a |
24 | | mortgage broker, or other mortgage loan originator, or by any |
25 | | agent of that lender, mortgage broker, or other mortgage loan |
26 | | originator. |
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1 | | "Mortgage loan originator" does not include a person or |
2 | | entity solely involved in extensions of credit relating to |
3 | | timeshare plans, as that term is defined in Section 101(53D) of |
4 | | Title 11, United States Code. |
5 | | (kk) "Depository institution" has the same meaning as in |
6 | | Section 3 of the Federal Deposit Insurance Act, and includes |
7 | | any credit union. |
8 | | (ll) "Dwelling" means a residential structure or mobile |
9 | | home which contains one to 4 family housing units, or |
10 | | individual units of condominiums or cooperatives. |
11 | | (mm) "Immediate family member" means a spouse, child, |
12 | | sibling, parent, grandparent, or grandchild, and includes |
13 | | step-parents, step-children, step-siblings, or adoptive |
14 | | relationships. |
15 | | (nn) "Individual" means a natural person. |
16 | | (oo) "Loan processor or underwriter" means an individual |
17 | | who performs clerical or support duties as an employee at the |
18 | | direction of and subject to the supervision and instruction of |
19 | | a person licensed, or exempt from licensing, under this Act. |
20 | | "Clerical or support duties" includes subsequent to the receipt |
21 | | of an application: |
22 | | (i) the receipt, collection, distribution, and |
23 | | analysis of information common for the processing or |
24 | | underwriting of a residential mortgage loan; and |
25 | | (ii) communicating with a consumer to obtain the |
26 | | information necessary for the processing or underwriting |
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1 | | of a loan, to the extent that the communication does not |
2 | | include offering or negotiating loan rates or terms, or |
3 | | counseling consumers about residential mortgage loan rates |
4 | | or terms. An individual engaging solely in loan processor |
5 | | or underwriter activities shall not represent to the |
6 | | public, through advertising or other means of |
7 | | communicating or providing information, including the use |
8 | | of business cards, stationery, brochures, signs, rate |
9 | | lists, or other promotional items, that the individual can |
10 | | or will perform any of the activities of a mortgage loan |
11 | | originator. |
12 | | (pp) "Nationwide Mortgage Licensing System and Registry" |
13 | | means a mortgage licensing system developed and maintained by |
14 | | the Conference of State Bank Supervisors and the American |
15 | | Association of Residential Mortgage Regulators for the |
16 | | licensing and registration of licensed mortgage loan |
17 | | originators. |
18 | | (qq) "Nontraditional mortgage product" means any mortgage |
19 | | product other than a 30-year fixed rate mortgage. |
20 | | (rr) "Person" means a natural person, corporation, |
21 | | company, limited liability company, partnership, or |
22 | | association. |
23 | | (ss) "Real estate brokerage activity" means any activity |
24 | | that involves offering or providing real estate brokerage |
25 | | services to the public, including: |
26 | | (1) acting as a real estate agent or real estate broker |
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1 | | for a buyer, seller, lessor, or lessee of real property; |
2 | | (2) bringing together parties interested in the sale, |
3 | | purchase, lease, rental, or exchange of real property; |
4 | | (3) negotiating, on behalf of any party, any portion of |
5 | | a contract relating to the sale, purchase, lease, rental, |
6 | | or exchange of real property, other than in connection with |
7 | | providing financing with respect to any such transaction; |
8 | | (4) engaging in any activity for which a person engaged |
9 | | in the activity is required to be registered or licensed as |
10 | | a real estate agent or real estate broker under any |
11 | | applicable law; or |
12 | | (5) offering to engage in any activity, or act in any |
13 | | 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 originator |
17 | | 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 agency; or |
23 | | (C) an institution regulated by the Farm Credit |
24 | | Administration; and |
25 | | (2) is registered with, and maintains a unique |
26 | | identifier through, the Nationwide Mortgage Licensing |
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1 | | System and Registry. |
2 | | (uu) "Unique identifier" means a number or other identifier |
3 | | assigned by protocols established by the Nationwide Mortgage |
4 | | Licensing System and Registry. |
5 | | (vv) "Residential mortgage license" means a license issued |
6 | | pursuant to Section 1-3, 2-2, or 2-6 of this Act. |
7 | | (ww) "Mortgage loan originator license" means a license |
8 | | issued pursuant to Section 7-1A, 7-3, or 7-6 of this Act. |
9 | | (xx) "Secretary" means the Secretary of the Department of |
10 | | Financial and Professional Regulation, or a person authorized |
11 | | by the Secretary or by this Act to act in the Secretary's |
12 | | stead. |
13 | | (yy) "Loan modification" means, for compensation or gain, |
14 | | either directly or indirectly offering or negotiating on behalf |
15 | | of a borrower or homeowner to adjust the terms of a residential |
16 | | mortgage loan in a manner not provided for in the original or |
17 | | previously modified mortgage loan. |
18 | | (zz) "Short sale facilitation" means, for compensation or |
19 | | gain, either directly or indirectly offering or negotiating on |
20 | | behalf of a borrower or homeowner to facilitate the sale of |
21 | | residential real estate subject to one or more residential |
22 | | mortgage loans or debts constituting liens on the property in |
23 | | which the proceeds from selling the residential real estate |
24 | | will fall short of the amount owed and the lien holders are |
25 | | contacted to agree to release their lien on the residential |
26 | | real estate and accept less than the full amount owed on the |
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1 | | debt. |
2 | | (Source: P.A. 96-112, eff. 7-31-09; 96-1000, eff. 7-2-10; |
3 | | 96-1216, eff. 1-1-11; 97-143, eff. 7-14-11; 97-891, eff. |
4 | | 8-3-12.)
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5 | | (205 ILCS 635/2-2)
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6 | | Sec. 2-2. Application process; investigation; fee.
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7 | | (a) The Secretary shall issue a license upon completion of |
8 | | all of the
following:
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9 | | (1) The filing of an application for license with the |
10 | | Director or the Nationwide Mortgage Licensing System and |
11 | | Registry as approved by the Director.
|
12 | | (2) The filing with the Secretary of a listing of |
13 | | judgments entered
against, and bankruptcy petitions by, |
14 | | the license applicant for the
preceding 10 years.
|
15 | | (3) The payment, in certified funds, of
investigation |
16 | | and application fees, the total of which shall be in an
|
17 | | amount equal to $2,700 annually. To comply with the common |
18 | | renewal date and requirements of the Nationwide Mortgage |
19 | | Licensing System and Registry, the term of initial licenses |
20 | | may be extended or shortened with applicable fees prorated |
21 | | or combined accordingly.
|
22 | | (4) Except for a broker applying to renew a license, |
23 | | the filing of an
audited balance sheet including all |
24 | | footnotes prepared by a certified public
accountant in |
25 | | accordance with generally accepted accounting principles |
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1 | | and
generally accepted auditing standards principles which |
2 | | evidences that the applicant meets
the net worth |
3 | | requirements of Section 3-5. Notwithstanding the |
4 | | requirements of this subsection, an applicant that is a |
5 | | subsidiary may submit audited consolidated financial |
6 | | statements of its parent, intermediary parent, or ultimate |
7 | | parent as long as the consolidated statements are supported |
8 | | by consolidating statements which include the applicant's |
9 | | financial statement. If the consolidating statements are |
10 | | unaudited, the applicant's chief financial officer shall |
11 | | attest to the applicant's financial statements disclosed |
12 | | in the consolidating statements.
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13 | | (5) The filing of proof satisfactory to the |
14 | | Commissioner that the
applicant, the members thereof if the |
15 | | applicant is a partnership or
association, the members or |
16 | | managers thereof that retain any authority or
|
17 | | responsibility under the operating agreement if the |
18 | | applicant is a limited
liability company, or the officers |
19 | | thereof if the applicant
is a corporation have 3 years |
20 | | experience preceding application
in real estate finance. |
21 | | Instead of this requirement, the applicant and the
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22 | | applicant's officers or members, as applicable, may
|
23 | | satisfactorily complete a program of education in real |
24 | | estate finance and
fair lending, as
approved by the |
25 | | Commissioner, prior to receiving the
initial license.
The |
26 | | Commissioner shall promulgate rules regarding proof of |
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1 | | experience
requirements and educational requirements and |
2 | | the satisfactory completion of
those requirements. The |
3 | | Commissioner may establish by rule a list of duly
licensed |
4 | | professionals and others who may be exempt from this |
5 | | requirement.
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6 | | (6) An investigation of the averments required by |
7 | | Section 2-4, which
investigation must allow the |
8 | | Commissioner to issue positive findings stating
that the |
9 | | financial responsibility, experience, character, and |
10 | | general fitness
of the license applicant and of the members |
11 | | thereof if the license applicant is
a partnership or |
12 | | association, of the officers and directors thereof if the
|
13 | | license applicant is a corporation, and of the managers and |
14 | | members that retain
any authority or responsibility under |
15 | | the operating agreement if the license
applicant is a |
16 | | limited liability company are such as to command the |
17 | | confidence
of the community and to warrant belief that the |
18 | | business will be operated
honestly, fairly and efficiently |
19 | | within the purpose of this Act. If the
Commissioner shall |
20 | | not so find, he or she shall not issue such license, and he
|
21 | | or she shall notify the license applicant of the denial. |
22 | | The Commissioner may impose conditions on a license if the |
23 | | Commissioner determines that the conditions are necessary or |
24 | | appropriate. These conditions shall be imposed in writing and |
25 | | shall continue in effect for the period prescribed by the |
26 | | Commissioner.
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1 | | (b) All licenses shall be issued to the license applicant.
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2 | | Upon receipt of such license, a residential mortgage |
3 | | licensee shall be
authorized to engage in the business |
4 | | regulated by this Act. Such license
shall remain in full force |
5 | | and effect until it expires without renewal, is
surrendered by |
6 | | the licensee or revoked or suspended as hereinafter provided.
|
7 | | (Source: P.A. 96-112, eff. 7-31-09; 96-1000, eff. 7-2-10; |
8 | | 97-891, eff. 8-3-12.)
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9 | | (205 ILCS 635/2-4) (from Ch. 17, par. 2322-4)
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10 | | Sec. 2-4. Averments of Licensee. Each application for |
11 | | license or for the
renewal of a license shall be accompanied by |
12 | | the following averments stating
that the applicant:
|
13 | | (a) Will maintain at least one full service office |
14 | | within the
State of Illinois pursuant to Section 3-4 of |
15 | | this Act;
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16 | | (b) Will maintain staff reasonably adequate to meet the |
17 | | requirements of
Section 3-4 of this Act;
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18 | | (c) Will keep and maintain for 36 months the same |
19 | | written records
as required by the federal Equal Credit |
20 | | Opportunity Act, and any other
information required by |
21 | | regulations of the Commissioner regarding any home
|
22 | | mortgage in the course of the conduct of its residential |
23 | | mortgage business;
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24 | | (d) Will file with the Commissioner or Nationwide |
25 | | Mortgage Licensing System and Registry as applicable, when |
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1 | | due, any report or reports
which it is required to file |
2 | | under any of the provisions of this Act;
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3 | | (e) Will not engage, whether as principal or agent, in |
4 | | the practice of
rejecting residential mortgage |
5 | | applications without reasonable cause, or
varying terms or |
6 | | application procedures without reasonable cause, for home
|
7 | | mortgages on real estate within any specific geographic |
8 | | area from the terms
or procedures generally provided by the |
9 | | licensee within other geographic
areas of the State;
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10 | | (f) Will not engage in fraudulent home mortgage |
11 | | underwriting practices;
|
12 | | (g) Will not make payment, whether directly or |
13 | | indirectly, of any kind
to any in house or fee appraiser of |
14 | | any government or private money lending
agency with which |
15 | | an application for a home mortgage has been filed for the
|
16 | | purpose of influencing the independent judgment of the |
17 | | appraiser with respect
to the value of any real estate |
18 | | which is to be covered by such home mortgage;
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19 | | (h) Has filed tax returns (State and Federal) for the |
20 | | past 3
years or filed with the Commissioner an accountant's |
21 | | or attorney's
statement as to why no return was filed;
|
22 | | (i) Will not engage in any discrimination or redlining |
23 | | activities
prohibited by Section 3-8 of this Act;
|
24 | | (j) Will not knowingly make any false promises likely |
25 | | to influence or
persuade, or pursue a course of |
26 | | misrepresentation and false promises
through agents, |
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1 | | solicitors, advertising or otherwise;
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2 | | (k) Will not knowingly misrepresent, circumvent or |
3 | | conceal, through
whatever subterfuge or device, any of the |
4 | | material particulars or the
nature thereof, regarding a |
5 | | transaction to which it is a party to the
injury of another |
6 | | party thereto;
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7 | | (l) Will disburse funds in accordance with its |
8 | | agreements;
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9 | | (m) Has not committed a crime against the law of this |
10 | | State, any other
state or of the United States, involving |
11 | | moral turpitude, fraudulent or
dishonest dealing, and that |
12 | | no final judgment has been entered against it in
a civil |
13 | | action upon grounds of fraud, misrepresentation or deceit |
14 | | which has
not been previously reported to the Commissioner;
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15 | | (n) Will account or deliver to the owner upon request |
16 | | any personal property such as
money, fund, deposit, check, |
17 | | draft, mortgage, other document or thing of
value which it |
18 | | is not in law or equity entitled to retain under the
|
19 | | circumstances;
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20 | | (o) Has not engaged in any conduct which would be cause |
21 | | for denial of a
license;
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22 | | (p) Has not become insolvent;
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23 | | (q) Has not submitted an application for a license |
24 | | under this Act which
contains a material misstatement;
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25 | | (r) Has not demonstrated by course of conduct, |
26 | | negligence or incompetence
in performing any act for which |
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1 | | it is required to hold a license under this
Act;
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2 | | (s) Will advise the Commissioner in writing, or the |
3 | | Nationwide Mortgage Licensing System and Registry as |
4 | | applicable, of any changes to the
information submitted on |
5 | | the most recent application for license or averments of |
6 | | record within 30
days of said change. The written notice |
7 | | must be signed in the same form as
the application for |
8 | | license being amended;
|
9 | | (t) Will comply with the provisions of this Act, or |
10 | | with any lawful
order, rule or regulation made or issued |
11 | | under the provisions of this Act;
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12 | | (u) Will submit to periodic examination by the |
13 | | Commissioner as required
by this Act;
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14 | | (v) Will advise the Commissioner in writing of |
15 | | judgments entered
against, and bankruptcy petitions by, |
16 | | the license applicant within 5
days of occurrence;
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17 | | (w) Will advise the Commissioner in writing within 30 |
18 | | days of any request made to a licensee under this Act to |
19 | | repurchase a loan in a manner that completely and clearly |
20 | | identifies to whom the request was made, the loans |
21 | | involved, and the reason therefor;
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22 | | (x) Will advise the Commissioner in writing within 30 |
23 | | days of any request from any entity to repurchase a loan in |
24 | | a manner that completely and clearly identifies to whom the |
25 | | request was made, the loans involved, and the reason for |
26 | | the request;
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1 | | (y) Will at all times act in a manner consistent with |
2 | | subsections (a) and
(b) of Section 1-2 of this Act;
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3 | | (z) Will not knowingly hire or employ a loan originator |
4 | | who is
not registered, or mortgage loan originator who is |
5 | | not licensed, with the Commissioner as required under |
6 | | Section 7-1 or Section 7-1A, as applicable, of this Act;
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7 | | (aa) Will not charge or collect advance payments from |
8 | | borrowers or homeowners for engaging in loan modification; |
9 | | and |
10 | | (bb) Will not structure activities or contracts to |
11 | | evade provisions of this Act. |
12 | | A licensee who fails to fulfill obligations of an averment, |
13 | | to comply with
averments made, or otherwise violates any of the |
14 | | averments made under this
Section shall be subject to the |
15 | | penalties in Section 4-5 of this Act.
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16 | | (Source: P.A. 96-112, eff. 7-31-09; 97-891, eff. 8-3-12.)
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17 | | (205 ILCS 635/3-2) (from Ch. 17, par. 2323-2)
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18 | | Sec. 3-2. Annual audit.
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19 | | (a) At the licensee's fiscal year-end, but in no
case more |
20 | | than 12 months after the last audit conducted pursuant to this
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21 | | Section, except as otherwise provided in this Section, it shall |
22 | | be
mandatory for each residential mortgage licensee to
cause |
23 | | its books and accounts to be audited by a certified public |
24 | | accountant
not connected with such licensee. The books and |
25 | | records of all licensees
under this Act shall be maintained on |
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1 | | an accrual basis. The audit must be
sufficiently comprehensive |
2 | | in scope to permit
the expression of an opinion on the |
3 | | financial statements, which must be
prepared in accordance with |
4 | | generally accepted accounting principles, and
must be |
5 | | performed in accordance with generally accepted auditing |
6 | | standards. Notwithstanding
the requirements of this |
7 | | subsection, a licensee that is a first tier subsidiary
may |
8 | | submit audited consolidated financial statements of its |
9 | | parent , intermediary parent, or ultimate parent as long as
the |
10 | | consolidated statements are supported by consolidating |
11 | | statements which include the licensee's financial statement. |
12 | | If the consolidating statements are unaudited, the . The
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13 | | licensee's chief financial officer shall attest to the |
14 | | licensee's financial
statements disclosed in the consolidating |
15 | | statements.
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16 | | (b) As used herein, the term "expression of opinion" |
17 | | includes either
(1) an unqualified opinion, (2) a qualified |
18 | | opinion, (3) a disclaimer of
opinion, or (4) an adverse |
19 | | opinion.
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20 | | (c) If a qualified or adverse opinion is expressed or if an |
21 | | opinion is
disclaimed, the reasons therefore must be fully |
22 | | explained. An opinion,
qualified as to a scope limitation, |
23 | | shall not be acceptable.
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24 | | (d) The most recent audit report shall be filed with the
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25 | | Commissioner within 90 days after the end of the licensee's |
26 | | fiscal year, or with the Nationwide Mortgage Licensing System |
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1 | | and Registry, if applicable, pursuant to Mortgage Call Report |
2 | | requirements. The report
filed with the Commissioner shall be |
3 | | certified by the certified public
accountant conducting the |
4 | | audit. The Commissioner may promulgate rules
regarding late |
5 | | audit reports.
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6 | | (e) If any licensee required to make an audit shall fail to |
7 | | cause an
audit to be made, the Commissioner shall cause the |
8 | | same to be made by a
certified public accountant at the |
9 | | licensee's expense. The Commissioner
shall select such |
10 | | certified public accountant by advertising for bids or
by such |
11 | | other fair and impartial means as he or she establishes by |
12 | | regulation.
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13 | | (f) In lieu of the audit or compilation financial statement
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14 | | required by this Section, a licensee shall submit and the |
15 | | Commissioner may
accept any audit made in conformance with the |
16 | | audit
requirements of the U.S. Department of Housing and Urban |
17 | | Development.
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18 | | (g) With respect to licensees who solely broker residential |
19 | | mortgage
loans as defined in subsection (o) of Section 1-4, |
20 | | instead of the audit
required by this Section, the Commissioner |
21 | | may
accept
compilation financial statements prepared at least |
22 | | every 12 months, and
the compilation financial statement must |
23 | | be submitted within 90 days after the end of
the licensee's |
24 | | fiscal year, or with the Nationwide Mortgage Licensing System |
25 | | and Registry, if applicable, pursuant to Mortgage Call Report |
26 | | requirements. If a
licensee
under this Section fails to file a |
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1 | | compilation as required, the Commissioner
shall cause an audit |
2 | | of the licensee's books and accounts to be made by a
certified |
3 | | public accountant at the licensee's expense. The Commissioner |
4 | | shall
select the certified public accountant by advertising for |
5 | | bids or by such other
fair and impartial means as he or she |
6 | | establishes by rule. A licensee who
files false or misleading |
7 | | compilation financial statements is guilty of a
business |
8 | | offense and shall be fined not less than $5,000.
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9 | | (h) The workpapers of the certified public accountants |
10 | | employed
by each
licensee for purposes of this Section are to |
11 | | be made available to the
Commissioner or the Commissioner's |
12 | | designee upon request and may be
reproduced by the Commissioner |
13 | | or the Commissioner's designee to enable to
the Commissioner to |
14 | | carry out the purposes of this Act.
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15 | | (i) Notwithstanding any other provision of this Section, if |
16 | | a licensee
relying on subsection (g) of this Section causes its |
17 | | books to be audited at any
other time or causes its financial |
18 | | statements to be reviewed, a complete copy
of the audited or |
19 | | reviewed financial statements shall be delivered to the
|
20 | | Commissioner at the time of the annual license renewal payment |
21 | | following
receipt by the licensee of the audited or reviewed |
22 | | financial statements. All workpapers shall be made available to |
23 | | the
Commissioner upon request. The financial statements and |
24 | | workpapers may be
reproduced by the Commissioner or the |
25 | | Commissioner's designee to carry out the
purposes of this Act.
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26 | | (Source: P.A. 97-813, eff. 7-13-12; 97-891, eff. 8-3-12; |
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1 | | 98-463, eff. 8-16-13.)"; and
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2 | | on page 29, by inserting immediately below line 12 the |
3 | | following:
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4 | | "Section 40. The Residential Real Property Disclosure Act |
5 | | is amended by changing Sections 70, 72, 74, 76, 78, and 80 as |
6 | | follows:
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7 | | (765 ILCS 77/70) |
8 | | Sec. 70. Predatory lending database program. |
9 | | (a) As used in this Article: |
10 | | "Adjustable rate mortgage" or "ARM" means a closed-end |
11 | | mortgage transaction that allows adjustments of the loan |
12 | | interest rate during the first 3 years of the loan term. |
13 | | "Borrower" means a person seeking a mortgage loan.
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14 | | "Broker" means a "broker" or "loan broker", as defined in |
15 | | subsection (p) of Section 1-4 of the Residential Mortgage |
16 | | License Act of 1987. |
17 | | "Closing agent" means an individual assigned by a title |
18 | | insurance company or a broker or originator to ensure that the |
19 | | execution of documents related to the closing of a real estate |
20 | | sale or the refinancing of a real estate loan and the |
21 | | disbursement of closing funds are in conformity with the |
22 | | instructions of the entity financing the transaction.
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23 | | "Counseling" means in-person counseling provided by a |
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1 | | counselor employed by a HUD-approved HUD-certified counseling |
2 | | agency to all borrowers, or documented telephone counseling |
3 | | where a hardship would be imposed on one or more borrowers. A |
4 | | hardship shall exist in instances in which the borrower is |
5 | | confined to his or her home due to medical conditions, as |
6 | | verified in writing by a physician, or the borrower resides 50 |
7 | | miles or more from the nearest participating HUD-approved |
8 | | HUD-certified housing counseling agency. In instances of |
9 | | telephone counseling, the borrower must supply all necessary |
10 | | documents to the counselor at least 72 hours prior to the |
11 | | scheduled telephone counseling session. |
12 | | "Counselor" means a counselor employed by a HUD-approved |
13 | | HUD-certified housing counseling agency. |
14 | | "Credit score" means a credit risk score as defined by the |
15 | | Fair Isaac Corporation, or its successor, and reported under |
16 | | such names as "BEACON", "EMPIRICA", and "FAIR ISAAC RISK SCORE" |
17 | | by one or more of the following credit reporting agencies or |
18 | | their successors: Equifax, Inc., Experian Information |
19 | | Solutions, Inc., and TransUnion
LLC. If the borrower's credit |
20 | | report contains credit scores from 2 reporting agencies, then |
21 | | the broker or loan originator shall report the lower score. If |
22 | | the borrower's credit report contains credit scores from 3 |
23 | | reporting agencies, then the broker or loan originator shall |
24 | | report the middle score.
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25 | | "Department" means the Department of Financial and |
26 | | Professional Regulation.
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1 | | "Exempt person or entity " means that term as it is defined |
2 | | in subsections (d)(1), (d)(1.5), and (d)(1.8) of Section 1-4 of |
3 | | the Residential Mortgage License Act of 1987.
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4 | | "First-time homebuyer" means a borrower who has not held an |
5 | | ownership interest in residential property.
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6 | | " HUD-approved HUD-certified counseling" or "counseling" |
7 | | means counseling given to a borrower by a counselor employed by |
8 | | a HUD-approved HUD-certified housing counseling agency. |
9 | | "Interest only" means a closed-end loan that permits one or |
10 | | more payments of interest without any reduction of the |
11 | | principal balance of the loan, other than the first payment on |
12 | | the loan. |
13 | | "Lender" means that term as it is defined in subsection (g) |
14 | | of Section 1-4 of the Residential Mortgage License Act of 1987.
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15 | | "Licensee" means that term as it is defined in subsection |
16 | | (e) of Section 1-4 of the Residential Mortgage License Act of |
17 | | 1987.
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18 | | "Mortgage loan" means that term as it is defined in |
19 | | subsection (f) of Section 1-4 of the Residential Mortgage |
20 | | License Act of 1987.
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21 | | "Negative amortization" means an amortization method under |
22 | | which the outstanding balance may increase at any time over the |
23 | | course of the loan because the regular periodic payment does |
24 | | not cover the full amount of interest due. |
25 | | "Originator" means a "loan originator" as defined in |
26 | | subsection (hh) of Section 1-4 of the Residential Mortgage |
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1 | | License Act of 1987, except an exempt person, and means a |
2 | | "mortgage loan originator" as defined in subsection (jj) of |
3 | | Section 1-4 of the Residential Mortgage License Act of 1987, |
4 | | except an exempt person. |
5 | | "Points and fees" has the meaning ascribed to that term in |
6 | | Section 10 of the High Risk Home Loan Act. |
7 | | "Prepayment penalty" means a charge imposed by a lender |
8 | | under a mortgage note or rider when the loan is paid before the |
9 | | expiration of the term of the loan. |
10 | | "Refinancing" means a loan secured by the borrower's or |
11 | | borrowers' primary residence where the proceeds are not used as |
12 | | purchase money for the residence. |
13 | | "Title insurance company" means any domestic company |
14 | | organized under the laws of this State for the purpose of |
15 | | conducting the business of guaranteeing or insuring titles to |
16 | | real estate and any title insurance company organized under the |
17 | | laws of another State, the District of Columbia, or a foreign |
18 | | government and authorized to transact the business of |
19 | | guaranteeing or insuring titles to real estate in this State.
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20 | | (a-5) A predatory lending database program shall be |
21 | | established within Cook County. The program shall be |
22 | | administered in accordance with this Article. The inception |
23 | | date of the program shall be July 1, 2008.
A predatory lending
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24 | | database program shall be expanded to include Kane, Peoria, and |
25 | | Will counties. The
inception date of the expansion of the |
26 | | program as it applies to Kane, Peoria, and Will
counties shall |
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1 | | be July 1, 2010. Until the inception date, none of the duties, |
2 | | obligations, contingencies, or consequences of or from the |
3 | | program shall be imposed. The program shall apply to all |
4 | | mortgage applications that are governed by this Article and |
5 | | that are made or taken on or after the inception of the |
6 | | program.
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7 | | (b) The database created under this program shall be |
8 | | maintained and administered by the Department. The database |
9 | | shall be designed to allow brokers, originators, counselors, |
10 | | title insurance companies, and closing agents to submit |
11 | | information to the database online. The database shall not be |
12 | | designed to allow those entities to retrieve information from |
13 | | the database, except as otherwise provided in this Article. |
14 | | Information submitted by the broker or originator to the |
15 | | Department may be used to populate the online form submitted by |
16 | | a counselor, title insurance company, or closing agent. |
17 | | (c) Within 10 business days after taking a mortgage |
18 | | application, the broker or originator for any mortgage on |
19 | | residential property within the program area must submit to the |
20 | | predatory lending database all of the information required |
21 | | under Section 72 and any other information required by the |
22 | | Department by rule. Within 7 business days after receipt of the |
23 | | information, the Department shall compare that information to |
24 | | the housing
counseling standards in Section 73
and issue to the |
25 | | borrower and the broker or originator a determination of |
26 | | whether counseling is recommended for the borrower. The |
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1 | | borrower may not waive counseling. If at any time after |
2 | | submitting the information required under Section 72 the broker |
3 | | or originator (i) changes the terms of the loan or (ii) issues |
4 | | a new commitment to the borrower, then, within 5 business days |
5 | | thereafter, the broker or originator shall re-submit all of the |
6 | | information required under Section 72 and, within 4 business |
7 | | days after receipt of the information re-submitted by the |
8 | | broker or originator, the Department shall compare that |
9 | | information to the housing
counseling standards in Section 73
|
10 | | and shall issue to the borrower and the broker or originator a |
11 | | new determination of whether re-counseling
is recommended for |
12 | | the borrower based on the information re-submitted by the |
13 | | broker or originator. The Department shall require |
14 | | re-counseling if the loan terms have been modified to meet |
15 | | another counseling standard in Section 73, or if the broker has |
16 | | increased the interest rate by more than 200 basis points.
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17 | | (d) If the Department recommends counseling for the |
18 | | borrower under subsection (c), then the Department shall notify |
19 | | the borrower of all participating HUD-approved HUD-certified |
20 | | counseling agencies located within the State and direct the |
21 | | borrower to interview with a counselor associated with one of |
22 | | those agencies. Within 10 business days after receipt of the |
23 | | notice of HUD-approved HUD-certified counseling agencies, it |
24 | | is the borrower's responsibility to borrower shall select one |
25 | | of those agencies and shall engage in an interview with a |
26 | | counselor associated with that agency. The selection must take |
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1 | | place and the appointment for the interview must be set within |
2 | | 10 business days, although the interview may take place beyond |
3 | | the 10 business day period. Within 7 business days after |
4 | | interviewing the borrower, the counselor must submit to the |
5 | | predatory lending database all of the information required |
6 | | under Section 74 and any other information required by the |
7 | | Department by rule. Reasonable and customary costs not to |
8 | | exceed $300
associated with counseling provided under the |
9 | | program shall be paid by the broker or originator and shall not |
10 | | be charged back to, or recovered from, the borrower . The |
11 | | Department shall annually calculate to the nearest dollar an |
12 | | adjusted rate for inflation. A counselor shall not recommend or |
13 | | suggest that a borrower contact any specific mortgage |
14 | | origination company, financial institution, or entity that |
15 | | deals in mortgage finance to obtain a loan, another quote, or |
16 | | for any other reason related to the specific mortgage |
17 | | transaction; however, a counselor may suggest that the borrower |
18 | | seek an opinion or a quote from another mortgage origination |
19 | | company, financial institution, or entity that deals in |
20 | | mortgage finance. A counselor or housing counseling agency that
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21 | | in good faith provides counseling shall not be liable to a |
22 | | broker or originator or borrower for civil damages, except for |
23 | | willful or wanton misconduct on the part of the counselor in |
24 | | providing the counseling. |
25 | | (e) The broker or originator and the borrower may not take |
26 | | any legally binding action concerning the loan transaction |
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1 | | until the later of the following: |
2 | | (1) the Department issues a determination not to |
3 | | recommend HUD-approved HUD-certified
counseling for the |
4 | | borrower in accordance with subsection (c); or |
5 | | (2) the Department issues a determination that |
6 | | HUD-approved HUD-certified
counseling is recommended for |
7 | | the borrower and the counselor submits all required |
8 | | information to the database in accordance with subsection |
9 | | (d).
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10 | | (f) Within 10 business days after closing, the title |
11 | | insurance company or closing agent must submit to the predatory |
12 | | lending database all of the information required under Section |
13 | | 76 and any other information required by the Department by |
14 | | rule. |
15 | | (g) The title insurance company or closing agent shall |
16 | | attach to the mortgage a certificate of
compliance with the |
17 | | requirements of this Article, as generated by the database. If |
18 | | the transaction is exempt, the title insurance company or |
19 | | closing agent shall attach to the mortgage a certificate of |
20 | | exemption, as generated by the database. If the title insurance |
21 | | company or closing agent fails to attach the certificate of |
22 | | compliance or exemption, whichever is required , then the |
23 | | mortgage is not recordable. In addition, if any lis pendens for |
24 | | a residential mortgage foreclosure is recorded on the property |
25 | | within the program area, a certificate of service must be |
26 | | simultaneously recorded that affirms that a copy of the lis |
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1 | | pendens was filed with the Department. The lis pendens may be |
2 | | filed with the Department either electronically or by filing a |
3 | | hard copy. If the certificate of service is not recorded, then |
4 | | the lis pendens pertaining to the residential mortgage |
5 | | foreclosure in question is not recordable and is of no force |
6 | | and effect. |
7 | | (h) All information provided to the predatory lending |
8 | | database under the program is confidential and is not subject |
9 | | to disclosure under the Freedom of Information Act, except as |
10 | | otherwise provided in this Article. Information or documents |
11 | | obtained by employees of the Department in the course of |
12 | | maintaining and administering the predatory lending database |
13 | | are deemed confidential. Employees are prohibited from making |
14 | | disclosure of such confidential information or documents. Any |
15 | | request for production of information from the predatory |
16 | | lending database, whether by subpoena, notice, or any other |
17 | | source, shall be referred to the Department of Financial and |
18 | | Professional Regulation. Any borrower may authorize in writing |
19 | | the release of database information. The Department may use the |
20 | | information in the database without the consent of the |
21 | | borrower: (i) for the purposes of administering and enforcing |
22 | | the program; (ii) to provide relevant information to a |
23 | | counselor providing counseling to a borrower under the program; |
24 | | or (iii) to the appropriate law enforcement agency or the |
25 | | applicable administrative agency if the database information |
26 | | demonstrates criminal, fraudulent, or otherwise illegal |
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1 | | activity.
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2 | | (i) Nothing in this Article is intended to prevent a |
3 | | borrower from making his or her own decision as to whether to |
4 | | proceed with a transaction.
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5 | | (j) Any person who violates any provision of this Article |
6 | | commits an unlawful practice within the meaning of the Consumer |
7 | | Fraud and Deceptive Business Practices Act.
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8 | | (j-1) A violation of any provision of this Article by a |
9 | | mortgage banking licensee or licensed mortgage loan originator |
10 | | shall constitute a violation of the Residential Mortgage |
11 | | License Act of 1987. |
12 | | (j-2) A violation of any provision of this Article by a |
13 | | title insurance company, title agent, or escrow agent shall |
14 | | constitute a violation of the Title Insurance Act. |
15 | | (j-3) A violation of any provision of this Article by a |
16 | | housing counselor shall be referred to the Department of |
17 | | Housing and Urban Development. |
18 | | (k) During the existence of the program, the Department |
19 | | shall submit semi-annual reports to the Governor and to the |
20 | | General Assembly by May 1 and November 1 of each year detailing |
21 | | its findings regarding the program. The report shall include, |
22 | | by county, at least the following information for each |
23 | | reporting period: |
24 | | (1) the number of loans registered with the program; |
25 | | (2) the number of borrowers receiving counseling; |
26 | | (3) the number of loans closed; |
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1 | | (4) the number of loans requiring counseling for each |
2 | | of the standards set forth in Section 73; |
3 | | (5) the number of loans requiring counseling where the |
4 | | mortgage originator changed the loan terms subsequent to |
5 | | counseling;
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6 | | (6) the number of licensed mortgage brokers and loan |
7 | | originators entering information into
the database; |
8 | | (7) the number of investigations based on information |
9 | | obtained from the database,
including the number of |
10 | | licensees fined, the number of licenses suspended, and the
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11 | | number of licenses revoked; |
12 | | (8) a summary of the types of non-traditional mortgage |
13 | | products being offered; and |
14 | | (9) a summary of how the Department is actively |
15 | | utilizing the program to combat
mortgage fraud. |
16 | | (Source: P.A. 96-328, eff. 8-11-09; 96-856, eff. 12-31-09; |
17 | | 97-891, eff. 1-1-13.)
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18 | | (765 ILCS 77/72) |
19 | | Sec. 72. Originator; required information. As part of the |
20 | | predatory lending database program, the broker or originator |
21 | | must submit all of the following information for inclusion in |
22 | | the predatory lending database for each loan for which the |
23 | | originator takes an application: |
24 | | (1) The borrower's name, address, social security |
25 | | number or taxpayer identification number, date of birth, |
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1 | | and income and expense information, including total |
2 | | monthly consumer debt, contained in the mortgage |
3 | | application.
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4 | | (2) The address, permanent index number, and a |
5 | | description of the collateral and information about the |
6 | | loan or loans being applied for and the loan terms, |
7 | | including the amount of the loan, the rate and whether the |
8 | | rate is fixed or adjustable, amortization or loan period |
9 | | terms, and any other material terms.
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10 | | (3) The borrower's credit score at the time of |
11 | | application.
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12 | | (4) Information about the originator and the company |
13 | | the originator works for, including the originator's |
14 | | license number and address, fees being charged, whether the |
15 | | fees are being charged as points up front, the yield spread |
16 | | premium payable outside closing, and other charges made or |
17 | | remuneration required by the broker or originator or its |
18 | | affiliates or the broker's or originator's employer or its |
19 | | affiliates for the mortgage loans.
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20 | | (5) Information about affiliated or third party |
21 | | service providers, including the names and addresses of |
22 | | appraisers, title insurance companies, closing agents, |
23 | | attorneys, and realtors who are involved with the |
24 | | transaction and the broker or originator and any moneys |
25 | | received from the broker or originator in connection with |
26 | | the transaction.
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1 | | (6) All information indicated on the Good Faith |
2 | | Estimate and Truth in Lending statement disclosures given |
3 | | to the borrower by the broker or originator.
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4 | | (7) Annual real estate taxes for the property, together |
5 | | with any assessments payable in connection with the |
6 | | property to be secured by the collateral and the proposed |
7 | | monthly principal and interest charge of all loans to be |
8 | | taken by the borrower and secured by the property of the |
9 | | borrower.
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10 | | (8) Information concerning how the broker or |
11 | | originator obtained the client and the name of its referral |
12 | | source, if any.
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13 | | (9) Information concerning the notices provided by the |
14 | | broker or originator to the borrower as required by law and |
15 | | the date those notices were given.
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16 | | (10) Information concerning whether a sale and |
17 | | leaseback is contemplated and the names of the lessor and |
18 | | lessee, seller, and purchaser.
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19 | | (11) Any and all financing by the borrower for the |
20 | | subject property within 12 months prior to the date of |
21 | | application. |
22 | | (12) Loan information, including interest rate, term, |
23 | | purchase price, down payment, and closing costs. |
24 | | (13) Whether the buyer is a first-time homebuyer or |
25 | | refinancing a primary residence. |
26 | | (14) Whether the loan permits interest only payments. |
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1 | | (15) Whether the loan may result in negative |
2 | | amortization. |
3 | | (16) Whether the total points and fees payable by the |
4 | | borrowers at or before closing will exceed 5%. |
5 | | (17) Whether the loan includes a prepayment penalty, |
6 | | and, if so, the terms of the penalty. |
7 | | (18) Whether the loan is an ARM. |
8 | | All information entered into the predatory lending |
9 | | database must be true and correct to the best of the |
10 | | originator's knowledge. The originator shall, prior to |
11 | | closing, correct, update, or amend the data as necessary. If |
12 | | any corrections become necessary after the file has been |
13 | | accessed by the closing agent or housing counselor, a new file |
14 | | must be entered. |
15 | | (Source: P.A. 97-891, eff. 1-1-13.)
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16 | | (765 ILCS 77/74) |
17 | | Sec. 74. Counselor; required information. As part of the |
18 | | predatory lending database program, a counselor must submit all |
19 | | of the following information for inclusion in the predatory |
20 | | lending database: |
21 | | (1) The information called for in items (1), (6), (9), |
22 | | (11), (12), (13), (14), (15), (16), (17), and (18) of
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23 | | Section 72. |
24 | | (2) Any information from the borrower that confirms or |
25 | | contradicts the information called for under item (1) of |
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1 | | this Section. |
2 | | (3) The name of the counselor and address of the |
3 | | HUD-approved HUD-certified housing counseling agency that |
4 | | employs the counselor.
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5 | | (4) Information pertaining to the borrower's monthly |
6 | | expenses that assists the counselor in determining whether |
7 | | the borrower can afford the loans or loans for which the |
8 | | borrower is applying. |
9 | | (5) A list of the disclosures furnished to the |
10 | | borrower, as seen and reviewed by the counselor, and a |
11 | | comparison of that list to all disclosures required by law. |
12 | | (6) Whether the borrower provided tax returns to the |
13 | | broker or originator or to the counselor, and, if so, who |
14 | | prepared the tax returns. |
15 | | (7)
A statement of the recommendations of the
counselor |
16 | | that indicates the counselor's response to each of the |
17 | | following statements: |
18 | | (A) The loan should not be approved due to indicia |
19 | | of fraud. |
20 | | (B) The loan should be approved; no material |
21 | | problems noted. |
22 | | (C) The borrower cannot afford the loan. |
23 | | (D) The borrower does not understand the |
24 | | transaction. |
25 | | (E) The borrower does not understand the costs |
26 | | associated with the transaction. |
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1 | | (F) The borrower's monthly income and expenses |
2 | | have been reviewed and disclosed. |
3 | | (G) The rate of the loan is above market rate. |
4 | | (H) The borrower should seek a competitive bid from |
5 | | another broker or originator. |
6 | | (I) There are discrepancies between the borrower's |
7 | | verbal understanding and the originator's completed |
8 | | form. |
9 | | (J) The borrower is precipitously close to not |
10 | | being able to afford the loan. |
11 | | (K) The borrower understands the true cost of debt |
12 | | consolidation and the need for credit card discipline.
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13 | | (L) The information that the borrower provided the |
14 | | originator has been amended by the originator.
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15 | | (Source: P.A. 97-813, eff. 7-13-12.)
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16 | | (765 ILCS 77/76) |
17 | | Sec. 76. Title insurance company or closing agent; required |
18 | | information. As part of the predatory lending database pilot |
19 | | program, a title insurance company or closing agent must submit |
20 | | all of the following information for inclusion in the predatory |
21 | | lending database:
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22 | | (1) The borrower's name, address, social security |
23 | | number or taxpayer identification number, date of birth, |
24 | | and income and expense information contained in the |
25 | | mortgage application. |
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1 | | (2) The address, permanent index number, and a |
2 | | description of the collateral and information about the |
3 | | loan or loans being applied for and the loan terms, |
4 | | including the amount of the loan, the rate and whether the |
5 | | rate is fixed or adjustable, amortization or loan period |
6 | | terms, and any other material terms. |
7 | | (3) Annual real estate taxes for the property, together |
8 | | with any assessments payable in connection with the |
9 | | property to be secured by the collateral and the proposed |
10 | | monthly principal and interest charge of all loans to be |
11 | | taken by the borrower and secured by the property of the |
12 | | borrower as well as any required escrows and the amounts |
13 | | paid monthly for those escrows. |
14 | | (4) All itemizations and descriptions set forth in the |
15 | | RESPA settlement statement including items to be |
16 | | disbursed, payable outside closing "POC" items noted on the |
17 | | statement, and a list of payees and the amounts of their |
18 | | checks. |
19 | | (5) The name and license number of the title insurance |
20 | | company or closing agent together with the name of the |
21 | | agent actually conducting the closing. |
22 | | (6) The names and addresses of all originators, |
23 | | brokers, appraisers, sales persons, attorneys, and |
24 | | surveyors that are present at the closing. |
25 | | (7) The date of closing, a detailed list of all notices |
26 | | provided to the borrower at closing and the date of those |
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1 | | notices, and all information indicated on the Truth in |
2 | | Lending statement and Good Faith Estimate disclosures.
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3 | | (Source: P.A. 94-280, eff. 1-1-06.)
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4 | | (765 ILCS 77/78)
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5 | | Sec. 78. Exemption. Borrowers applying for reverse |
6 | | mortgage financing of residential real estate including under |
7 | | programs regulated by the Federal Housing Administration (FHA) |
8 | | that require HUD-approved HUD-certified counseling are exempt |
9 | | from the program and may submit a HUD counseling certificate to |
10 | | comply with the program. A certificate of exemption is required |
11 | | for recording.
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12 | | Mortgages secured by non-owner occupied property, |
13 | | commercial property, residential property consisting of more |
14 | | than 4 units, and government property are exempt but require a |
15 | | certificate of exemption for recording. |
16 | | Mortgages originated by an exempt person or entity are |
17 | | exempt but require a certificate of exemption for recording. |
18 | | (Source: P.A. 98-463, eff. 8-16-13.)
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19 | | (765 ILCS 77/80)
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20 | | Sec. 80. Predatory Lending Database Program Fund. The |
21 | | Predatory Lending Database Program Fund is created as a special |
22 | | fund in the State treasury. Subject to appropriation, moneys in |
23 | | the Fund shall be appropriated to the Illinois Housing |
24 | | Development Authority for the purpose of making grants for |