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borrowers, or documented telephone counseling where a hardship |
would be imposed on one or more borrowers. A hardship shall |
exist in instances in which the borrower is confined to his or |
her home due to medical conditions, as verified in writing by a |
physician, or the borrower resides 50 miles or more from the |
nearest participating HUD-approved housing counseling agency. |
In instances of telephone counseling, the borrower must supply |
all necessary documents to the counselor at least 72 hours |
prior to the scheduled telephone counseling session. |
"Counselor" means a counselor employed by a HUD-approved |
housing counseling agency. |
"Credit score" means a credit risk score as defined by the |
Fair Isaac Corporation, or its successor, and reported under |
such names as "BEACON", "EMPIRICA", and "FAIR ISAAC RISK SCORE" |
by one or more of the following credit reporting agencies or |
their successors: Equifax, Inc., Experian Information |
Solutions, Inc., and TransUnion
LLC. If the borrower's credit |
report contains credit scores from 2 reporting agencies, then |
the broker or loan originator shall report the lower score. If |
the borrower's credit report contains credit scores from 3 |
reporting agencies, then the broker or loan originator shall |
report the middle score.
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"Department" means the Department of Financial and |
Professional Regulation.
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"Exempt person or entity" means that term as it is defined |
in subsections (d)(1), (d)(1.5), and (d)(1.8) of Section 1-4 of |
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the Residential Mortgage License Act of 1987.
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"First-time homebuyer" means a borrower who has not held an |
ownership interest in residential property.
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"HUD-approved counseling" or "counseling" means counseling |
given to a borrower by a counselor employed by a HUD-approved |
housing counseling agency. |
"Interest only" means a closed-end loan that permits one or |
more payments of interest without any reduction of the |
principal balance of the loan, other than the first payment on |
the loan. |
"Lender" means that term as it is defined in subsection (g) |
of Section 1-4 of the Residential Mortgage License Act of 1987.
|
"Licensee" means that term as it is defined in subsection |
(e) of Section 1-4 of the Residential Mortgage License Act of |
1987.
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"Mortgage loan" means that term as it is defined in |
subsection (f) of Section 1-4 of the Residential Mortgage |
License Act of 1987.
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"Negative amortization" means an amortization method under |
which the outstanding balance may increase at any time over the |
course of the loan because the regular periodic payment does |
not cover the full amount of interest due. |
"Originator" means a "loan originator" as defined in |
subsection (hh) of Section 1-4 of the Residential Mortgage |
License Act of 1987, except an exempt person, and means a |
"mortgage loan originator" as defined in subsection (jj) of |
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Section 1-4 of the Residential Mortgage License Act of 1987, |
except an exempt person. |
"Points and fees" has the meaning ascribed to that term in |
Section 10 of the High Risk Home Loan Act. |
"Prepayment penalty" means a charge imposed by a lender |
under a mortgage note or rider when the loan is paid before the |
expiration of the term of the loan. |
"Refinancing" means a loan secured by the borrower's or |
borrowers' primary residence where the proceeds are not used as |
purchase money for the residence. |
"Title insurance company" means any domestic company |
organized under the laws of this State for the purpose of |
conducting the business of guaranteeing or insuring titles to |
real estate and any title insurance company organized under the |
laws of another State, the District of Columbia, or a foreign |
government and authorized to transact the business of |
guaranteeing or insuring titles to real estate in this State.
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(a-5) A predatory lending database program shall be |
established within Cook County. The program shall be |
administered in accordance with this Article. The inception |
date of the program shall be July 1, 2008.
A predatory lending
|
database program shall be expanded to include Kane, Peoria, and |
Will counties. The
inception date of the expansion of the |
program as it applies to Kane, Peoria, and Will
counties shall |
be July 1, 2010. Until the inception date, none of the duties, |
obligations, contingencies, or consequences of or from the |
|
program shall be imposed. The program shall apply to all |
mortgage applications that are governed by this Article and |
that are made or taken on or after the inception of the |
program.
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(b) The database created under this program shall be |
maintained and administered by the Department. The database |
shall be designed to allow brokers, originators, counselors, |
title insurance companies, and closing agents to submit |
information to the database online. The database shall not be |
designed to allow those entities to retrieve information from |
the database, except as otherwise provided in this Article. |
Information submitted by the broker or originator to the |
Department may be used to populate the online form submitted by |
a counselor, title insurance company, or closing agent. |
(c) Within 10 business days after taking a mortgage |
application, the broker or originator for any mortgage on |
residential property within the program area must submit to the |
predatory lending database all of the information required |
under Section 72 and any other information required by the |
Department by rule. Within 7 business days after receipt of the |
information, the Department shall compare that information to |
the housing
counseling standards in Section 73
and issue to the |
borrower and the broker or originator a determination of |
whether counseling is recommended for the borrower. The |
borrower may not waive counseling. If at any time after |
submitting the information required under Section 72 the broker |
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or originator (i) changes the terms of the loan or (ii) issues |
a new commitment to the borrower, then, within 5 business days |
thereafter, the broker or originator shall re-submit all of the |
information required under Section 72 and, within 4 business |
days after receipt of the information re-submitted by the |
broker or originator, the Department shall compare that |
information to the housing
counseling standards in Section 73
|
and shall issue to the borrower and the broker or originator a |
new determination of whether re-counseling
is recommended for |
the borrower based on the information re-submitted by the |
broker or originator. The Department shall require |
re-counseling if the loan terms have been modified to meet |
another counseling standard in Section 73, or if the broker has |
increased the interest rate by more than 200 basis points.
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(d) If the Department recommends counseling for the |
borrower under subsection (c), then the Department shall notify |
the borrower of all participating HUD-approved counseling |
agencies located within the State and direct the borrower to |
interview with a counselor associated with one of those |
agencies. Within 10 business days after receipt of the notice |
of HUD-approved counseling agencies, it is the borrower's |
responsibility to select one of those agencies and shall engage |
in an interview with a counselor associated with that agency. |
The selection must take place and the appointment for the |
interview must be set within 10 business days, although the |
interview may take place beyond the 10 business day period. |
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Within 7 business days after interviewing the borrower, the |
counselor must submit to the predatory lending database all of |
the information required under Section 74 and any other |
information required by the Department by rule. Reasonable and |
customary costs not to exceed $300
associated with counseling |
provided under the program shall be paid by the broker or |
originator and shall not be charged back to, or recovered from, |
the borrower. The Department shall annually calculate to the |
nearest dollar an adjusted rate for inflation. A counselor |
shall not recommend or suggest that a borrower contact any |
specific mortgage origination company, financial institution, |
or entity that deals in mortgage finance to obtain a loan, |
another quote, or for any other reason related to the specific |
mortgage transaction; however, a counselor may suggest that the |
borrower seek an opinion or a quote from another mortgage |
origination company, financial institution, or entity that |
deals in mortgage finance. A counselor or housing counseling |
agency that
in good faith provides counseling shall not be |
liable to a broker or originator or borrower for civil damages, |
except for willful or wanton misconduct on the part of the |
counselor in providing the counseling. |
(e) The broker or originator and the borrower may not take |
any legally binding action concerning the loan transaction |
until the later of the following: |
(1) the Department issues a determination not to |
recommend HUD-approved
counseling for the borrower in |
|
accordance with subsection (c); or |
(2) the Department issues a determination that |
HUD-approved
counseling is recommended for the borrower |
and the counselor submits all required information to the |
database in accordance with subsection (d).
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(f) Within 10 business days after closing, the title |
insurance company or closing agent must submit to the predatory |
lending database all of the information required under Section |
76 and any other information required by the Department by |
rule. |
(g) The title insurance company or closing agent shall |
attach to the mortgage a certificate of
compliance with the |
requirements of this Article, as generated by the database. If |
the transaction is exempt, the title insurance company or |
closing agent shall attach to the mortgage a certificate of |
exemption, as generated by the database. If the title insurance |
company or closing agent fails to attach the certificate of |
compliance or exemption, whichever is required, then the |
mortgage is not recordable. In addition, if any lis pendens for |
a residential mortgage foreclosure is recorded on the property |
within the program area, a certificate of service must be |
simultaneously recorded that affirms that a copy of the lis |
pendens was filed with the Department. A lis pendens filed |
after July 1, 2016 shall be filed with the Department |
electronically. The lis pendens may be filed with the |
Department either electronically or by filing a hard copy. If |
|
the certificate of service is not recorded, then the lis |
pendens pertaining to the residential mortgage foreclosure in |
question is not recordable and is of no force and effect. |
(h) All information provided to the predatory lending |
database under the program is confidential and is not subject |
to disclosure under the Freedom of Information Act, except as |
otherwise provided in this Article. Information or documents |
obtained by employees of the Department in the course of |
maintaining and administering the predatory lending database |
are deemed confidential. Employees are prohibited from making |
disclosure of such confidential information or documents. Any |
request for production of information from the predatory |
lending database, whether by subpoena, notice, or any other |
source, shall be referred to the Department of Financial and |
Professional Regulation. Any borrower may authorize in writing |
the release of database information. The Department may use the |
information in the database without the consent of the |
borrower: (i) for the purposes of administering and enforcing |
the program; (ii) to provide relevant information to a |
counselor providing counseling to a borrower under the program; |
or (iii) to the appropriate law enforcement agency or the |
applicable administrative agency if the database information |
demonstrates criminal, fraudulent, or otherwise illegal |
activity.
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(i) Nothing in this Article is intended to prevent a |
borrower from making his or her own decision as to whether to |
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proceed with a transaction.
|
(j) Any person who violates any provision of this Article |
commits an unlawful practice within the meaning of the Consumer |
Fraud and Deceptive Business Practices Act.
|
(j-1) A violation of any provision of this Article by a |
mortgage banking licensee or licensed mortgage loan originator |
shall constitute a violation of the Residential Mortgage |
License Act of 1987. |
(j-2) A violation of any provision of this Article by a |
title insurance company, title agent, or escrow agent shall |
constitute a violation of the Title Insurance Act. |
(j-3) A violation of any provision of this Article by a |
housing counselor shall be referred to the Department of |
Housing and Urban Development. |
(k) During the existence of the program, the Department |
shall submit semi-annual reports to the Governor and to the |
General Assembly by May 1 and November 1 of each year detailing |
its findings regarding the program. The report shall include, |
by county, at least the following information for each |
reporting period: |
(1) the number of loans registered with the program; |
(2) the number of borrowers receiving counseling; |
(3) the number of loans closed; |
(4) the number of loans requiring counseling for each |
of the standards set forth in Section 73; |
(5) the number of loans requiring counseling where the |
|
mortgage originator changed the loan terms subsequent to |
counseling;
|
(6) the number of licensed mortgage brokers and loan |
originators entering information into
the database; |
(7) the number of investigations based on information |
obtained from the database,
including the number of |
licensees fined, the number of licenses suspended, and the
|
number of licenses revoked; |
(8) a summary of the types of non-traditional mortgage |
products being offered; and |
(9) a summary of how the Department is actively |
utilizing the program to combat
mortgage fraud. |
(Source: P.A. 97-891, eff. 1-1-13; 98-1081, eff. 1-1-15.)
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Section 99. Effective date. This Act takes effect upon |
becoming law.
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