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(205 ILCS 635/5-9) Sec. 5-9. Notice of change in loan terms. (a) No licensee may fail to do either of the following: (1) Provide timely notice to the borrower of any |
| material change in the terms of the residential mortgage loan prior to the closing of the loan. For purposes of this Section, a "material change means" any of the following:
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(A) A change in the type of loan being offered,
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| such as a fixed or variable rate loan or a loan with a balloon payment.
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(B) A change in the term of the loan, as
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| reflected in the number of monthly payments due before a final payment is scheduled to be made.
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(C) An increase in the interest rate of more than
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| 0.15%, or an equivalent increase in the amount of discount points charged.
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(D) An increase in the regular monthly payment of
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| principal and interest of more than 5%.
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(E) A change regarding the requirement or amount
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| of escrow of taxes or insurance.
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(F) A change regarding the requirement or
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| payment, or both, of private mortgage insurance.
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(2) Timely inform the borrower if any fees payable by
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| the borrower to the licensee increase by more than 10% or $100, whichever is greater.
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(b) The disclosures required by this Section shall be deemed timely if the licensee provides the borrower with the revised information not later than 3 days after learning of the change or 24 hours before the residential mortgage loan is closed, whichever is earlier. If the licensee discloses a material change more than the 3 days after learning of the change but still 24 hours before the residential mortgage loan is closed, it will not be liable for penalties or forfeitures if the licensee cures in time for the borrower to avoid any damage.
(c) If an increase in the total amount of the fee to be paid by the borrower to the broker is not disclosed in accordance with this Section, the broker shall refund to the borrower the amount by which the fee was increased. If the fee is financed into the residential mortgage loan, the broker shall also refund to the borrower the interest charged to finance the fee.
(d) The requirements of this Section do not apply to a licensee providing a notice of change in loan terms pursuant to the federal Consumer Financial Protection Bureau's Know Before You Owe mortgage disclosure procedure pursuant to the federal Truth in Lending Act and amendments promulgated under 12 CFR 1026 and the federal Real Estate Settlement Procedures Act and amendments promulgated under 12 CFR 1024.
(Source: P.A. 100-1153, eff. 12-19-18.)
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