Public Act 100-0509
 
SB0776 EnrolledLRB100 05753 HEP 15776 b


  
    AN ACT concerning civil law.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  
 
 
    Section 5. The Residential Real Property Disclosure Act is 
amended  by changing Sections 70, 72, and 76 as follows:
 
    (765 ILCS 77/70)
    Sec. 70. Predatory lending database program.
    (a) As used in this Article:
    "Adjustable rate mortgage" or "ARM" means a closed-end 
mortgage transaction that allows adjustments of the loan 
interest rate during the first 3 years of the loan term.
    "Borrower" means a person seeking a mortgage loan.
    "Broker" means a "broker" or "loan broker", as defined in 
subsection (p) of  Section 1-4 of the Residential Mortgage 
License Act of 1987.
    "Closing agent" means an individual assigned by a title 
insurance company or a broker or  originator to ensure that the 
execution of documents related to the closing of a real estate 
sale or the refinancing of a real estate loan and the 
disbursement of closing funds are in conformity with the 
instructions of the entity financing the transaction.
    "Counseling" means in-person counseling provided by a 
counselor employed by a HUD-approved counseling agency to all 
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.
    "Department" means the Department of Financial and 
Professional Regulation.
    "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 
the Residential Mortgage License Act of 1987.
    "First-time homebuyer" means a borrower who has not held an 
ownership interest in residential property.
    "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.
    "Mortgage loan" means that term as it is defined in 
subsection (f) of Section 1-4 of the Residential Mortgage 
License Act of 1987.
    "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 
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.
    (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.
    (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 
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.
    (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 borrower must supply all necessary documents, as set forth 
by the counselor, at least 72 hours before the scheduled 
interview. 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. 
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).
    (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. Each certificate of 
compliance or certificate of exemption must contain, at a 
minimum, one of the borrower's names on the mortgage loan and 
the property index number for the subject property. 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. 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.
    (i) Nothing in this Article is intended to prevent a 
borrower from making his or her own decision as to whether to 
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. 98-1081, eff. 1-1-15; 99-660, eff. 7-28-16.)
 
    (765 ILCS 77/72)
    Sec. 72. Originator; required information. As part of the 
predatory lending database program, the broker or originator 
must submit all of the following information for inclusion in 
the predatory lending database for each loan for which the 
originator takes an application:
        (1) The borrower's name, address, social security 
    number or taxpayer identification number, date of birth, 
    and income and expense information, including total 
    monthly consumer debt, contained in the mortgage 
    application.

        (2) The address, permanent index number, and a 
    description of the collateral and information about the 
    loan or loans being applied for and the loan terms, 
    including the amount of the loan, the rate  and whether the 
    rate is fixed or adjustable, amortization or loan period 
    terms, and any other material terms.

        (3) The borrower's credit score at the time of 
    application.

        (4) Information about the originator and the company 
    the originator works for, including the originator's 
    license number and  address, fees being charged, whether the 
    fees are being charged as points up front, the yield spread 
    premium payable outside closing, and other charges made or 
    remuneration required by the broker or originator or its 
    affiliates or the broker's or originator's employer or its 
    affiliates for the mortgage loans.

        (5) (Blank). Information about affiliated or third 
    party service providers, including the names and addresses 
    of appraisers, title insurance companies, closing agents, 
    attorneys, and realtors who are involved with the 
    transaction and the broker or originator and any moneys 
    received from the broker or originator in connection with 
    the transaction.

        (6) All information indicated in connection with the 
    TILA-RESPA Integrated Loan Estimate Disclosure or on the 
    Good Faith Estimate and Truth in Lending statement 
    disclosures given to the borrower by the broker or 
    originator.

        (7) Annual real estate taxes for the property, together 
    with any assessments payable in connection with the 
    property to be secured by the collateral and the proposed 
    monthly principal and interest charge of all loans to be 
    taken by the borrower and secured by the property of the 
    borrower.

        (8) Information concerning how the broker or 
    originator obtained the client and the name of its referral 
    source, if any.

        (9) Information concerning the notices provided by the 
    broker or originator to the borrower as required by law and 
    the date those notices were given.

        (10) Information concerning whether a sale and 
    leaseback is contemplated and the names of the lessor and 
    lessee, seller, and purchaser.


        (11) Any and all financing by the borrower for the 
    subject property within 12 months prior to the date of 
    application.
        (12) Loan information, including interest rate, term, 
    purchase price, down payment, and closing costs.
        (13) Whether the buyer is a first-time homebuyer or 
    refinancing a primary residence.
        (14) Whether the loan permits interest only payments.
        (15) Whether the loan may result in negative 
    amortization.
        (16) Whether the total points and fees payable by the 
    borrowers at or before closing will exceed 5%.
        (17) Whether the loan includes a prepayment penalty, 
    and, if so, the terms of the penalty.
        (18) Whether the loan is an ARM.
    All information entered into the predatory lending 
database must be true and correct to the best of the 
originator's knowledge. The originator shall, prior to 
closing, correct, update, or amend the data as necessary. If 
any corrections become necessary after the file has been 
accessed by the closing agent or housing counselor, a new file 
must be entered. 
(Source: P.A. 97-891, eff. 1-1-13; 98-1081, eff. 1-1-15.)
 
    (765 ILCS 77/76)
    Sec. 76. Title insurance company or closing agent; required 
information. As part of the predatory lending database program, 
a title insurance company or closing agent must submit all of 
the following information for inclusion in the predatory 
lending database:

        (1) The borrower's name, address, social security 
    number or taxpayer identification number, date of birth, 
    and income and expense information contained in the 
    mortgage application.
        (2) The address, permanent index number, and a 
    description of the collateral  and information about the 
    loan or loans being applied for and the loan terms, 
    including the amount of the loan, the rate  and whether the 
    rate is fixed or adjustable, amortization or loan period 
    terms, and any other material terms.
        (3) Annual real estate taxes for the property, together 
    with any assessments payable in connection with the 
    property to be secured by the collateral and the proposed 
    monthly principal and interest charge of all loans to be 
    taken by the borrower and secured by the property of the 
    borrower as well as any required escrows and the amounts 
    paid monthly for those escrows.
        (4) All itemizations and descriptions set forth in or 
    in connection with the TILA-RESPA Integrated Closing 
    Disclosure or RESPA settlement statement, including items 
    to be disbursed, payable outside closing "POC" items noted 
    on the statement, and a list of payees and the amounts of 
    their checks.
        (5) The name and license number of the title insurance 
    company or closing agent together with the name of the 
    agent actually conducting the closing.
        (6) The names and addresses of all originators, 
    brokers, appraisers, sales persons, attorneys, and 
    surveyors that are present at the closing.
        (7) The date of closing, a detailed list of all notices 
    provided to the borrower at closing and the date of those 
    notices, and all information indicated on or in connection 
    with the TILA-RESPA Integrated Loan Estimate Disclosure or 
    on the Truth in Lending statement and Good Faith Estimate 
    disclosures.


(Source: P.A. 98-1081, eff. 1-1-15.)
 
 
    Section 99. Effective date. This Act takes effect upon 
becoming law.