Sen. Jacqueline Y. Collins

Filed: 5/20/2014

 

 


 

 


 
09800HB5685sam001LRB098 17498 HEP 59809 a

1
AMENDMENT TO HOUSE BILL 5685

2    AMENDMENT NO. ______. Amend House Bill 5685 on page 23,
3line 5, by changing "Section" to "Sections 1-4, 2-2, 2-4, 3-2,
4and"; and
 
5on page 23, by inserting immediately below line 6 the
6following:
 
7    "(205 ILCS 635/1-4)
8    Sec. 1-4. Definitions.
9    (a) "Residential real property" or "residential real
10estate" shall mean any real property located in Illinois, upon
11which is constructed or intended to be constructed a dwelling.
12    (b) "Making a residential mortgage loan" or "funding a
13residential mortgage loan" shall mean for compensation or gain,
14either directly or indirectly, advancing funds or making a
15commitment to advance funds to a loan applicant for a
16residential mortgage loan.

 

 

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1    (c) "Soliciting, processing, placing, or negotiating a
2residential mortgage loan" shall mean for compensation or gain,
3either directly or indirectly, accepting or offering to accept
4an application for a residential mortgage loan, assisting or
5offering to assist in the processing of an application for a
6residential mortgage loan on behalf of a borrower, or
7negotiating or offering to negotiate the terms or conditions of
8a residential mortgage loan with a lender on behalf of a
9borrower including, but not limited to, the submission of
10credit packages for the approval of lenders, the preparation of
11residential mortgage loan closing documents, including a
12closing 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
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
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
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
20mean a person, partnership, association, corporation, or any
21other entity who or which is licensed pursuant to this Act to
22engage in the activities regulated by this Act.
23    (f) "Mortgage loan" "residential mortgage loan" or "home
24mortgage loan" shall mean any loan primarily for personal,
25family, or household use that is secured by a mortgage, deed of
26trust, or other equivalent consensual security interest on a

 

 

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1dwelling as defined in Section 103(v) of the federal Truth in
2Lending Act, or residential real estate upon which is
3constructed or intended to be constructed a dwelling.
4    (g) "Lender" shall mean any person, partnership,
5association, corporation, or any other entity who either lends
6or invests money in residential mortgage loans.
7    (h) "Ultimate equitable owner" shall mean a person who,
8directly or indirectly, owns or controls an ownership interest
9in a corporation, foreign corporation, alien business
10organization, trust, or any other form of business organization
11regardless of whether the person owns or controls the ownership
12interest through one or more persons or one or more proxies,
13powers of attorney, nominees, corporations, associations,
14partnerships, trusts, joint stock companies, or other entities
15or devices, or any combination thereof.
16    (i) "Residential mortgage financing transaction" shall
17mean the negotiation, acquisition, sale, or arrangement for or
18the offer to negotiate, acquire, sell, or arrange for, a
19residential mortgage loan or residential mortgage loan
20commitment.
21    (j) "Personal residence address" shall mean a street
22address and shall not include a post office box number.
23    (k) "Residential mortgage loan commitment" shall mean a
24contract for residential mortgage loan financing.
25    (l) "Party to a residential mortgage financing
26transaction" shall mean a borrower, lender, or loan broker in a

 

 

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1residential mortgage financing transaction.
2    (m) "Payments" shall mean payment of all or any of the
3following: principal, interest and escrow reserves for taxes,
4insurance and other related reserves, and reimbursement for
5lender advances.
6    (n) "Commissioner" shall mean the Commissioner of Banks and
7Real Estate, except that, beginning on April 6, 2009 (the
8effective date of Public Act 95-1047), all references in this
9Act to the Commissioner of Banks and Real Estate are deemed, in
10appropriate contexts, to be references to the Secretary of
11Financial and Professional Regulation, or his or her designee,
12including the Director of the Division of Banking of the
13Department of Financial and Professional Regulation.
14    (n-1) "Director" shall mean the Director of the Division of
15Banking of the Department of Financial and Professional
16Regulation, except that, beginning on July 31, 2009 (the
17effective date of Public Act 96-112), all references in this
18Act to the Director are deemed, in appropriate contexts, to be
19the Secretary of Financial and Professional Regulation, or his
20or her designee, including the Director of the Division of
21Banking of the Department of Financial and Professional
22Regulation.
23    (o) "Loan brokering", "brokering", or "brokerage service"
24shall mean the act of helping to obtain from another entity,
25for a borrower, a loan secured by residential real estate
26situated in Illinois or assisting a borrower in obtaining a

 

 

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1loan secured by residential real estate situated in Illinois in
2return for consideration to be paid by either the borrower or
3the lender including, but not limited to, contracting for the
4delivery of residential mortgage loans to a third party lender
5and soliciting, processing, placing, or negotiating
6residential mortgage loans.
7    (p) "Loan broker" or "broker" shall mean a person,
8partnership, association, corporation, or limited liability
9company, other than those persons, partnerships, associations,
10corporations, or limited liability companies exempted from
11licensing pursuant to Section 1-4, subsection (d), of this Act,
12who performs the activities described in subsections (c), (o),
13and (yy) of this Section.
14    (q) "Servicing" shall mean the collection or remittance for
15or the right or obligation to collect or remit for any lender,
16noteowner, noteholder, or for a licensee's own account, of
17payments, interests, principal, and trust items such as hazard
18insurance and taxes on a residential mortgage loan in
19accordance with the terms of the residential mortgage loan; and
20includes loan payment follow-up, delinquency loan follow-up,
21loan analysis and any notifications to the borrower that are
22necessary to enable the borrower to keep the loan current and
23in good standing. "Servicing" includes management of
24third-party entities acting on behalf of a residential mortgage
25licensee for the collection of delinquent payments and the use
26by such third-party entities of said licensee's servicing

 

 

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1records or information, including their use in foreclosure.
2    (r) "Full service office" shall mean an office, provided by
3the licensee and not subleased from the licensee's employees,
4and staff in Illinois reasonably adequate to handle efficiently
5communications, questions, and other matters relating to any
6application for, or an existing home mortgage secured by
7residential real estate situated in Illinois with respect to
8which the licensee is brokering, funding originating,
9purchasing, or servicing. The management and operation of each
10full service office must include observance of good business
11practices such as proper signage; adequate, organized, and
12accurate books and records; ample phone lines, hours of
13business, staff training and supervision, and provision for a
14mechanism to resolve consumer inquiries, complaints, and
15problems. The Commissioner shall issue regulations with regard
16to these requirements and shall include an evaluation of
17compliance with this Section in his or her periodic examination
18of each licensee.
19    (s) "Purchasing" shall mean the purchase of conventional or
20government-insured mortgage loans secured by residential real
21estate situated in Illinois from either the lender or from the
22secondary market.
23    (t) "Borrower" shall mean the person or persons who seek
24the services of a loan broker, originator, or lender.
25    (u) "Originating" shall mean the issuing of commitments for
26and funding of residential mortgage loans.

 

 

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1    (v) "Loan brokerage agreement" shall mean a written
2agreement in which a broker or loan broker agrees to do either
3of 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,
10dissemination, or circulation to induce, directly or
11indirectly, any person to enter into a residential mortgage
12loan agreement or residential mortgage loan brokerage
13agreement relative to a mortgage secured by residential real
14estate situated in Illinois.
15    (x) "Residential Mortgage Board" shall mean the
16Residential Mortgage Board created in Section 1-5 of this Act.
17    (y) "Government-insured mortgage loan" shall mean any
18mortgage loan made on the security of residential real estate
19insured by the Department of Housing and Urban Development or
20Farmers Home Loan Administration, or guaranteed by the Veterans
21Administration.
22    (z) "Annual audit" shall mean a certified audit of the
23licensee's books and records and systems of internal control
24performed by a certified public accountant in accordance with
25generally accepted accounting principles and generally
26accepted auditing standards.

 

 

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1    (aa) "Financial institution" shall mean a savings and loan
2association, savings bank, credit union, or a bank organized
3under the laws of Illinois or a savings and loan association,
4savings bank, credit union or a bank organized under the laws
5of the United States and headquartered in Illinois.
6    (bb) "Escrow agent" shall mean a third party, individual or
7entity charged with the fiduciary obligation for holding escrow
8funds on a residential mortgage loan pending final payout of
9those funds in accordance with the terms of the residential
10mortgage loan.
11    (cc) "Net worth" shall have the meaning ascribed thereto in
12Section 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
7terms used in this Act for the efficient and clear
8administration of this Act.
9    (ee) "First tier subsidiary" shall be defined by regulation
10incorporating the comparable definitions used by the Office of
11the Comptroller of the Currency and the Illinois Commissioner
12of Banks and Real Estate.
13    (ff) "Gross delinquency rate" means the quotient
14determined by dividing (1) the sum of (i) the number of
15government-insured residential mortgage loans funded or
16purchased by a licensee in the preceding calendar year that are
17delinquent and (ii) the number of conventional residential
18mortgage loans funded or purchased by the licensee in the
19preceding calendar year that are delinquent by (2) the sum of
20(i) the number of government-insured residential mortgage
21loans funded or purchased by the licensee in the preceding
22calendar year and (ii) the number of conventional residential
23mortgage loans funded or purchased by the licensee in the
24preceding calendar year.
25    (gg) "Delinquency rate factor" means the factor set by rule
26of the Commissioner that is multiplied by the average gross

 

 

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1delinquency rate of licensees, determined annually for the
2immediately preceding calendar year, for the purpose of
3determining which licensees shall be examined by the
4Commissioner pursuant to subsection (b) of Section 4-8 of this
5Act.
6    (hh) "Loan originator" means any natural person who, for
7compensation or in the expectation of compensation, either
8directly or indirectly makes, offers to make, solicits, places,
9or negotiates a residential mortgage loan. This definition
10applies only to Section 7-1 of this Act.
11    (ii) "Confidential supervisory information" means any
12report of examination, visitation, or investigation prepared
13by the Commissioner under this Act, any report of examination
14visitation, or investigation prepared by the state regulatory
15authority of another state that examines a licensee, any
16document or record prepared or obtained in connection with or
17relating to any examination, visitation, or investigation, and
18any record prepared or obtained by the Commissioner to the
19extent that the record summarizes or contains information
20derived from any report, document, or record described in this
21subsection. "Confidential supervisory information" does not
22include any information or record routinely prepared by a
23licensee and maintained in the ordinary course of business or
24any information or record that is required to be made publicly
25available pursuant to State or federal law or rule.
26    (jj) "Mortgage loan originator" means an individual who for

 

 

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1compensation or gain or in the expectation of compensation or
2gain:
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
7in loan modification activities as defined in subsection (yy)
8of this Section. A mortgage loan originator engaged in loan
9modification activities shall report those activities to the
10Department of Financial and Professional Regulation in the
11manner provided by the Department; however, the Department
12shall not impose a fee for reporting, nor require any
13additional qualifications to engage in those activities beyond
14those provided pursuant to this Act for mortgage loan
15originators.
16    "Mortgage loan originator" does not include an individual
17engaged solely as a loan processor or underwriter except as
18otherwise provided in subsection (d) of Section 7-1A of this
19Act.
20    "Mortgage loan originator" does not include a person or
21entity that only performs real estate brokerage activities and
22is licensed in accordance with the Real Estate License Act of
232000, unless the person or entity is compensated by a lender, a
24mortgage broker, or other mortgage loan originator, or by any
25agent of that lender, mortgage broker, or other mortgage loan
26originator.

 

 

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1    "Mortgage loan originator" does not include a person or
2entity solely involved in extensions of credit relating to
3timeshare plans, as that term is defined in Section 101(53D) of
4Title 11, United States Code.
5    (kk) "Depository institution" has the same meaning as in
6Section 3 of the Federal Deposit Insurance Act, and includes
7any credit union.
8    (ll) "Dwelling" means a residential structure or mobile
9home which contains one to 4 family housing units, or
10individual units of condominiums or cooperatives.
11    (mm) "Immediate family member" means a spouse, child,
12sibling, parent, grandparent, or grandchild, and includes
13step-parents, step-children, step-siblings, or adoptive
14relationships.
15    (nn) "Individual" means a natural person.
16    (oo) "Loan processor or underwriter" means an individual
17who performs clerical or support duties as an employee at the
18direction of and subject to the supervision and instruction of
19a person licensed, or exempt from licensing, under this Act.
20"Clerical or support duties" includes subsequent to the receipt
21of 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"
13means a mortgage licensing system developed and maintained by
14the Conference of State Bank Supervisors and the American
15Association of Residential Mortgage Regulators for the
16licensing and registration of licensed mortgage loan
17originators.
18    (qq) "Nontraditional mortgage product" means any mortgage
19product other than a 30-year fixed rate mortgage.
20    (rr) "Person" means a natural person, corporation,
21company, limited liability company, partnership, or
22association.
23    (ss) "Real estate brokerage activity" means any activity
24that involves offering or providing real estate brokerage
25services 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
15individual 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
3assigned by protocols established by the Nationwide Mortgage
4Licensing System and Registry.
5    (vv) "Residential mortgage license" means a license issued
6pursuant to Section 1-3, 2-2, or 2-6 of this Act.
7    (ww) "Mortgage loan originator license" means a license
8issued pursuant to Section 7-1A, 7-3, or 7-6 of this Act.
9    (xx) "Secretary" means the Secretary of the Department of
10Financial and Professional Regulation, or a person authorized
11by the Secretary or by this Act to act in the Secretary's
12stead.
13    (yy) "Loan modification" means, for compensation or gain,
14either directly or indirectly offering or negotiating on behalf
15of a borrower or homeowner to adjust the terms of a residential
16mortgage loan in a manner not provided for in the original or
17previously modified mortgage loan.
18    (zz) "Short sale facilitation" means, for compensation or
19gain, either directly or indirectly offering or negotiating on
20behalf of a borrower or homeowner to facilitate the sale of
21residential real estate subject to one or more residential
22mortgage loans or debts constituting liens on the property in
23which the proceeds from selling the residential real estate
24will fall short of the amount owed and the lien holders are
25contacted to agree to release their lien on the residential
26real estate and accept less than the full amount owed on the

 

 

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1debt.
2(Source: P.A. 96-112, eff. 7-31-09; 96-1000, eff. 7-2-10;
396-1216, eff. 1-1-11; 97-143, eff. 7-14-11; 97-891, eff.
48-3-12.)
 
5    (205 ILCS 635/2-2)
6    Sec. 2-2. Application process; investigation; fee.
7    (a) The Secretary shall issue a license upon completion of
8all of the following:
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.
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
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.
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
23Commissioner determines that the conditions are necessary or
24appropriate. These conditions shall be imposed in writing and
25shall continue in effect for the period prescribed by the
26Commissioner.

 

 

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1    (b) All licenses shall be issued to the license applicant.
2    Upon receipt of such license, a residential mortgage
3licensee shall be authorized to engage in the business
4regulated by this Act. Such license shall remain in full force
5and effect until it expires without renewal, is surrendered by
6the licensee or revoked or suspended as hereinafter provided.
7(Source: P.A. 96-112, eff. 7-31-09; 96-1000, eff. 7-2-10;
897-891, eff. 8-3-12.)
 
9    (205 ILCS 635/2-4)  (from Ch. 17, par. 2322-4)
10    Sec. 2-4. Averments of Licensee. Each application for
11license or for the renewal of a license shall be accompanied by
12the 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;
16        (b) Will maintain staff reasonably adequate to meet the
17    requirements of Section 3-4 of this Act;
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;
24        (d) Will file with the Commissioner or Nationwide
25    Mortgage Licensing System and Registry as applicable, when

 

 

09800HB5685sam001- 22 -LRB098 17498 HEP 59809 a

1    due, any report or reports which it is required to file
2    under any of the provisions of this Act;
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;
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;
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,

 

 

09800HB5685sam001- 23 -LRB098 17498 HEP 59809 a

1    solicitors, advertising or otherwise;
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;
7        (l) Will disburse funds in accordance with its
8    agreements;
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;
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;
20        (o) Has not engaged in any conduct which would be cause
21    for denial of a license;
22        (p) Has not become insolvent;
23        (q) Has not submitted an application for a license
24    under this Act which contains a material misstatement;
25        (r) Has not demonstrated by course of conduct,
26    negligence or incompetence in performing any act for which

 

 

09800HB5685sam001- 24 -LRB098 17498 HEP 59809 a

1    it is required to hold a license under this Act;
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;
12        (u) Will submit to periodic examination by the
13    Commissioner as required by this Act;
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;
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;
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;

 

 

09800HB5685sam001- 25 -LRB098 17498 HEP 59809 a

1        (y) Will at all times act in a manner consistent with
2    subsections (a) and (b) of Section 1-2 of this Act;
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;
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,
13to comply with averments made, or otherwise violates any of the
14averments made under this Section shall be subject to the
15penalties in Section 4-5 of this Act.
16(Source: P.A. 96-112, eff. 7-31-09; 97-891, eff. 8-3-12.)
 
17    (205 ILCS 635/3-2)  (from Ch. 17, par. 2323-2)
18    Sec. 3-2. Annual audit.
19    (a) At the licensee's fiscal year-end, but in no case more
20than 12 months after the last audit conducted pursuant to this
21Section, except as otherwise provided in this Section, it shall
22be mandatory for each residential mortgage licensee to cause
23its books and accounts to be audited by a certified public
24accountant not connected with such licensee. The books and
25records of all licensees under this Act shall be maintained on

 

 

09800HB5685sam001- 26 -LRB098 17498 HEP 59809 a

1an accrual basis. The audit must be sufficiently comprehensive
2in scope to permit the expression of an opinion on the
3financial statements, which must be prepared in accordance with
4generally accepted accounting principles, and must be
5performed in accordance with generally accepted auditing
6standards. Notwithstanding the requirements of this
7subsection, a licensee that is a first tier subsidiary may
8submit audited consolidated financial statements of its
9parent, intermediary parent, or ultimate parent as long as the
10consolidated statements are supported by consolidating
11statements which include the licensee's financial statement.
12If the consolidating statements are unaudited, the . The
13licensee's chief financial officer shall attest to the
14licensee's financial statements disclosed in the consolidating
15statements.
16    (b) As used herein, the term "expression of opinion"
17includes either (1) an unqualified opinion, (2) a qualified
18opinion, (3) a disclaimer of opinion, or (4) an adverse
19opinion.
20    (c) If a qualified or adverse opinion is expressed or if an
21opinion is disclaimed, the reasons therefore must be fully
22explained. An opinion, qualified as to a scope limitation,
23shall not be acceptable.
24    (d) The most recent audit report shall be filed with the
25Commissioner within 90 days after the end of the licensee's
26fiscal year, or with the Nationwide Mortgage Licensing System

 

 

09800HB5685sam001- 27 -LRB098 17498 HEP 59809 a

1and Registry, if applicable, pursuant to Mortgage Call Report
2requirements. The report filed with the Commissioner shall be
3certified by the certified public accountant conducting the
4audit. The Commissioner may promulgate rules regarding late
5audit reports.
6    (e) If any licensee required to make an audit shall fail to
7cause an audit to be made, the Commissioner shall cause the
8same to be made by a certified public accountant at the
9licensee's expense. The Commissioner shall select such
10certified public accountant by advertising for bids or by such
11other fair and impartial means as he or she establishes by
12regulation.
13    (f) In lieu of the audit or compilation financial statement
14required by this Section, a licensee shall submit and the
15Commissioner may accept any audit made in conformance with the
16audit requirements of the U.S. Department of Housing and Urban
17Development.
18    (g) With respect to licensees who solely broker residential
19mortgage loans as defined in subsection (o) of Section 1-4,
20instead of the audit required by this Section, the Commissioner
21may accept compilation financial statements prepared at least
22every 12 months, and the compilation financial statement must
23be submitted within 90 days after the end of the licensee's
24fiscal year, or with the Nationwide Mortgage Licensing System
25and Registry, if applicable, pursuant to Mortgage Call Report
26requirements. If a licensee under this Section fails to file a

 

 

09800HB5685sam001- 28 -LRB098 17498 HEP 59809 a

1compilation as required, the Commissioner shall cause an audit
2of the licensee's books and accounts to be made by a certified
3public accountant at the licensee's expense. The Commissioner
4shall select the certified public accountant by advertising for
5bids or by such other fair and impartial means as he or she
6establishes by rule. A licensee who files false or misleading
7compilation financial statements is guilty of a business
8offense and shall be fined not less than $5,000.
9    (h) The workpapers of the certified public accountants
10employed by each licensee for purposes of this Section are to
11be made available to the Commissioner or the Commissioner's
12designee upon request and may be reproduced by the Commissioner
13or the Commissioner's designee to enable to the Commissioner to
14carry out the purposes of this Act.
15    (i) Notwithstanding any other provision of this Section, if
16a licensee relying on subsection (g) of this Section causes its
17books to be audited at any other time or causes its financial
18statements to be reviewed, a complete copy of the audited or
19reviewed financial statements shall be delivered to the
20Commissioner at the time of the annual license renewal payment
21following receipt by the licensee of the audited or reviewed
22financial statements. All workpapers shall be made available to
23the Commissioner upon request. The financial statements and
24workpapers may be reproduced by the Commissioner or the
25Commissioner's designee to carry out the purposes of this Act.
26(Source: P.A. 97-813, eff. 7-13-12; 97-891, eff. 8-3-12;

 

 

09800HB5685sam001- 29 -LRB098 17498 HEP 59809 a

198-463, eff. 8-16-13.)"; and
 
2on page 29, by inserting immediately below line 12 the
3following:
 
4    "Section 40. The Residential Real Property Disclosure Act
5is amended by changing Sections 70, 72, 74, 76, 78, and 80 as
6follows:
 
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
11mortgage transaction that allows adjustments of the loan
12interest rate during the first 3 years of the loan term.
13    "Borrower" means a person seeking a mortgage loan.
14    "Broker" means a "broker" or "loan broker", as defined in
15subsection (p) of Section 1-4 of the Residential Mortgage
16License Act of 1987.
17    "Closing agent" means an individual assigned by a title
18insurance company or a broker or originator to ensure that the
19execution of documents related to the closing of a real estate
20sale or the refinancing of a real estate loan and the
21disbursement of closing funds are in conformity with the
22instructions of the entity financing the transaction.
23    "Counseling" means in-person counseling provided by a

 

 

09800HB5685sam001- 30 -LRB098 17498 HEP 59809 a

1counselor employed by a HUD-approved HUD-certified counseling
2agency to all borrowers, or documented telephone counseling
3where a hardship would be imposed on one or more borrowers. A
4hardship shall exist in instances in which the borrower is
5confined to his or her home due to medical conditions, as
6verified in writing by a physician, or the borrower resides 50
7miles or more from the nearest participating HUD-approved
8HUD-certified housing counseling agency. In instances of
9telephone counseling, the borrower must supply all necessary
10documents to the counselor at least 72 hours prior to the
11scheduled telephone counseling session.
12    "Counselor" means a counselor employed by a HUD-approved
13HUD-certified housing counseling agency.
14    "Credit score" means a credit risk score as defined by the
15Fair Isaac Corporation, or its successor, and reported under
16such names as "BEACON", "EMPIRICA", and "FAIR ISAAC RISK SCORE"
17by one or more of the following credit reporting agencies or
18their successors: Equifax, Inc., Experian Information
19Solutions, Inc., and TransUnion LLC. If the borrower's credit
20report contains credit scores from 2 reporting agencies, then
21the broker or loan originator shall report the lower score. If
22the borrower's credit report contains credit scores from 3
23reporting agencies, then the broker or loan originator shall
24report the middle score.
25    "Department" means the Department of Financial and
26Professional Regulation.

 

 

09800HB5685sam001- 31 -LRB098 17498 HEP 59809 a

1    "Exempt person or entity" means that term as it is defined
2in subsections (d)(1), (d)(1.5), and (d)(1.8) of Section 1-4 of
3the Residential Mortgage License Act of 1987.
4    "First-time homebuyer" means a borrower who has not held an
5ownership interest in residential property.
6    "HUD-approved HUD-certified counseling" or "counseling"
7means counseling given to a borrower by a counselor employed by
8a HUD-approved HUD-certified housing counseling agency.
9    "Interest only" means a closed-end loan that permits one or
10more payments of interest without any reduction of the
11principal balance of the loan, other than the first payment on
12the loan.
13    "Lender" means that term as it is defined in subsection (g)
14of Section 1-4 of the Residential Mortgage License Act of 1987.
15    "Licensee" means that term as it is defined in subsection
16(e) of Section 1-4 of the Residential Mortgage License Act of
171987.
18    "Mortgage loan" means that term as it is defined in
19subsection (f) of Section 1-4 of the Residential Mortgage
20License Act of 1987.
21    "Negative amortization" means an amortization method under
22which the outstanding balance may increase at any time over the
23course of the loan because the regular periodic payment does
24not cover the full amount of interest due.
25    "Originator" means a "loan originator" as defined in
26subsection (hh) of Section 1-4 of the Residential Mortgage

 

 

09800HB5685sam001- 32 -LRB098 17498 HEP 59809 a

1License Act of 1987, except an exempt person, and means a
2"mortgage loan originator" as defined in subsection (jj) of
3Section 1-4 of the Residential Mortgage License Act of 1987,
4except an exempt person.
5    "Points and fees" has the meaning ascribed to that term in
6Section 10 of the High Risk Home Loan Act.
7    "Prepayment penalty" means a charge imposed by a lender
8under a mortgage note or rider when the loan is paid before the
9expiration of the term of the loan.
10    "Refinancing" means a loan secured by the borrower's or
11borrowers' primary residence where the proceeds are not used as
12purchase money for the residence.
13    "Title insurance company" means any domestic company
14organized under the laws of this State for the purpose of
15conducting the business of guaranteeing or insuring titles to
16real estate and any title insurance company organized under the
17laws of another State, the District of Columbia, or a foreign
18government and authorized to transact the business of
19guaranteeing or insuring titles to real estate in this State.
20    (a-5) A predatory lending database program shall be
21established within Cook County. The program shall be
22administered in accordance with this Article. The inception
23date of the program shall be July 1, 2008. A predatory lending
24database program shall be expanded to include Kane, Peoria, and
25Will counties. The inception date of the expansion of the
26program as it applies to Kane, Peoria, and Will counties shall

 

 

09800HB5685sam001- 33 -LRB098 17498 HEP 59809 a

1be July 1, 2010. Until the inception date, none of the duties,
2obligations, contingencies, or consequences of or from the
3program shall be imposed. The program shall apply to all
4mortgage applications that are governed by this Article and
5that are made or taken on or after the inception of the
6program.
7    (b) The database created under this program shall be
8maintained and administered by the Department. The database
9shall be designed to allow brokers, originators, counselors,
10title insurance companies, and closing agents to submit
11information to the database online. The database shall not be
12designed to allow those entities to retrieve information from
13the database, except as otherwise provided in this Article.
14Information submitted by the broker or originator to the
15Department may be used to populate the online form submitted by
16a counselor, title insurance company, or closing agent.
17    (c) Within 10 business days after taking a mortgage
18application, the broker or originator for any mortgage on
19residential property within the program area must submit to the
20predatory lending database all of the information required
21under Section 72 and any other information required by the
22Department by rule. Within 7 business days after receipt of the
23information, the Department shall compare that information to
24the housing counseling standards in Section 73 and issue to the
25borrower and the broker or originator a determination of
26whether counseling is recommended for the borrower. The

 

 

09800HB5685sam001- 34 -LRB098 17498 HEP 59809 a

1borrower may not waive counseling. If at any time after
2submitting the information required under Section 72 the broker
3or originator (i) changes the terms of the loan or (ii) issues
4a new commitment to the borrower, then, within 5 business days
5thereafter, the broker or originator shall re-submit all of the
6information required under Section 72 and, within 4 business
7days after receipt of the information re-submitted by the
8broker or originator, the Department shall compare that
9information to the housing counseling standards in Section 73
10and shall issue to the borrower and the broker or originator a
11new determination of whether re-counseling is recommended for
12the borrower based on the information re-submitted by the
13broker or originator. The Department shall require
14re-counseling if the loan terms have been modified to meet
15another counseling standard in Section 73, or if the broker has
16increased the interest rate by more than 200 basis points.
17    (d) If the Department recommends counseling for the
18borrower under subsection (c), then the Department shall notify
19the borrower of all participating HUD-approved HUD-certified
20counseling agencies located within the State and direct the
21borrower to interview with a counselor associated with one of
22those agencies. Within 10 business days after receipt of the
23notice of HUD-approved HUD-certified counseling agencies, it
24is the borrower's responsibility to borrower shall select one
25of those agencies and shall engage in an interview with a
26counselor associated with that agency. The selection must take

 

 

09800HB5685sam001- 35 -LRB098 17498 HEP 59809 a

1place and the appointment for the interview must be set within
210 business days, although the interview may take place beyond
3the 10 business day period. Within 7 business days after
4interviewing the borrower, the counselor must submit to the
5predatory lending database all of the information required
6under Section 74 and any other information required by the
7Department by rule. Reasonable and customary costs not to
8exceed $300 associated with counseling provided under the
9program shall be paid by the broker or originator and shall not
10be charged back to, or recovered from, the borrower. The
11Department shall annually calculate to the nearest dollar an
12adjusted rate for inflation. A counselor shall not recommend or
13suggest that a borrower contact any specific mortgage
14origination company, financial institution, or entity that
15deals in mortgage finance to obtain a loan, another quote, or
16for any other reason related to the specific mortgage
17transaction; however, a counselor may suggest that the borrower
18seek an opinion or a quote from another mortgage origination
19company, financial institution, or entity that deals in
20mortgage finance. A counselor or housing counseling agency that
21in good faith provides counseling shall not be liable to a
22broker or originator or borrower for civil damages, except for
23willful or wanton misconduct on the part of the counselor in
24providing the counseling.
25    (e) The broker or originator and the borrower may not take
26any legally binding action concerning the loan transaction

 

 

09800HB5685sam001- 36 -LRB098 17498 HEP 59809 a

1until 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).
10    (f) Within 10 business days after closing, the title
11insurance company or closing agent must submit to the predatory
12lending database all of the information required under Section
1376 and any other information required by the Department by
14rule.
15    (g) The title insurance company or closing agent shall
16attach to the mortgage a certificate of compliance with the
17requirements of this Article, as generated by the database. If
18the transaction is exempt, the title insurance company or
19closing agent shall attach to the mortgage a certificate of
20exemption, as generated by the database. If the title insurance
21company or closing agent fails to attach the certificate of
22compliance or exemption, whichever is required, then the
23mortgage is not recordable. In addition, if any lis pendens for
24a residential mortgage foreclosure is recorded on the property
25within the program area, a certificate of service must be
26simultaneously recorded that affirms that a copy of the lis

 

 

09800HB5685sam001- 37 -LRB098 17498 HEP 59809 a

1pendens was filed with the Department. The lis pendens may be
2filed with the Department either electronically or by filing a
3hard copy. If the certificate of service is not recorded, then
4the lis pendens pertaining to the residential mortgage
5foreclosure in question is not recordable and is of no force
6and effect.
7    (h) All information provided to the predatory lending
8database under the program is confidential and is not subject
9to disclosure under the Freedom of Information Act, except as
10otherwise provided in this Article. Information or documents
11obtained by employees of the Department in the course of
12maintaining and administering the predatory lending database
13are deemed confidential. Employees are prohibited from making
14disclosure of such confidential information or documents. Any
15request for production of information from the predatory
16lending database, whether by subpoena, notice, or any other
17source, shall be referred to the Department of Financial and
18Professional Regulation. Any borrower may authorize in writing
19the release of database information. The Department may use the
20information in the database without the consent of the
21borrower: (i) for the purposes of administering and enforcing
22the program; (ii) to provide relevant information to a
23counselor providing counseling to a borrower under the program;
24or (iii) to the appropriate law enforcement agency or the
25applicable administrative agency if the database information
26demonstrates criminal, fraudulent, or otherwise illegal

 

 

09800HB5685sam001- 38 -LRB098 17498 HEP 59809 a

1activity.
2    (i) Nothing in this Article is intended to prevent a
3borrower from making his or her own decision as to whether to
4proceed with a transaction.
5    (j) Any person who violates any provision of this Article
6commits an unlawful practice within the meaning of the Consumer
7Fraud and Deceptive Business Practices Act.
8    (j-1) A violation of any provision of this Article by a
9mortgage banking licensee or licensed mortgage loan originator
10shall constitute a violation of the Residential Mortgage
11License Act of 1987.
12    (j-2) A violation of any provision of this Article by a
13title insurance company, title agent, or escrow agent shall
14constitute a violation of the Title Insurance Act.
15    (j-3) A violation of any provision of this Article by a
16housing counselor shall be referred to the Department of
17Housing and Urban Development.
18    (k) During the existence of the program, the Department
19shall submit semi-annual reports to the Governor and to the
20General Assembly by May 1 and November 1 of each year detailing
21its findings regarding the program. The report shall include,
22by county, at least the following information for each
23reporting 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;

 

 

09800HB5685sam001- 39 -LRB098 17498 HEP 59809 a

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;
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
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;
1797-891, eff. 1-1-13.)
 
18    (765 ILCS 77/72)
19    Sec. 72. Originator; required information. As part of the
20predatory lending database program, the broker or originator
21must submit all of the following information for inclusion in
22the predatory lending database for each loan for which the
23originator takes an application:
24        (1) The borrower's name, address, social security
25    number or taxpayer identification number, date of birth,

 

 

09800HB5685sam001- 40 -LRB098 17498 HEP 59809 a

1    and income and expense information, including total
2    monthly consumer debt, contained in the mortgage
3    application.
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.
10        (3) The borrower's credit score at the time of
11    application.
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.
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.
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.
10        (8) Information concerning how the broker or
11    originator obtained the client and the name of its referral
12    source, if any.
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.
16        (10) Information concerning whether a sale and
17    leaseback is contemplated and the names of the lessor and
18    lessee, seller, and purchaser.
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
9database must be true and correct to the best of the
10originator's knowledge. The originator shall, prior to
11closing, correct, update, or amend the data as necessary. If
12any corrections become necessary after the file has been
13accessed by the closing agent or housing counselor, a new file
14must be entered.
15(Source: P.A. 97-891, eff. 1-1-13.)
 
16    (765 ILCS 77/74)
17    Sec. 74. Counselor; required information. As part of the
18predatory lending database program, a counselor must submit all
19of the following information for inclusion in the predatory
20lending database:
21        (1) The information called for in items (1), (6), (9),
22    (11), (12), (13), (14), (15), (16), (17), and (18) of
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.
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.
13            (L) The information that the borrower provided the
14        originator has been amended by the originator.
15(Source: P.A. 97-813, eff. 7-13-12.)
 
16    (765 ILCS 77/76)
17    Sec. 76. Title insurance company or closing agent; required
18information. As part of the predatory lending database pilot
19program, a title insurance company or closing agent must submit
20all of the following information for inclusion in the predatory
21lending database:
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.
3(Source: P.A. 94-280, eff. 1-1-06.)
 
4    (765 ILCS 77/78)
5    Sec. 78. Exemption. Borrowers applying for reverse
6mortgage financing of residential real estate including under
7programs regulated by the Federal Housing Administration (FHA)
8that require HUD-approved HUD-certified counseling are exempt
9from the program and may submit a HUD counseling certificate to
10comply with the program. A certificate of exemption is required
11for recording.
12    Mortgages secured by non-owner occupied property,
13commercial property, residential property consisting of more
14than 4 units, and government property are exempt but require a
15certificate of exemption for recording.
16    Mortgages originated by an exempt person or entity are
17exempt but require a certificate of exemption for recording.
18(Source: P.A. 98-463, eff. 8-16-13.)
 
19    (765 ILCS 77/80)
20    Sec. 80. Predatory Lending Database Program Fund. The
21Predatory Lending Database Program Fund is created as a special
22fund in the State treasury. Subject to appropriation, moneys in
23the Fund shall be appropriated to the Illinois Housing
24Development Authority for the purpose of making grants for

 

 

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1HUD-approved HUD-certified counseling agencies participating
2in the Predatory Lending Database Program to assist with
3implementation and development of the Predatory Lending
4Database Program.
5(Source: P.A. 95-707, eff. 1-11-08.)".