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Public Act 103-0156 | ||||
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AN ACT concerning regulation.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Residential Mortgage License Act of 1987 is | ||||
amended by changing Sections 1-3 and 1-4 and by adding Section | ||||
3-11 as follows: | ||||
(205 ILCS 635/1-3) (from Ch. 17, par. 2321-3) | ||||
Sec. 1-3. Necessity for license; scope of Act. | ||||
(a) No person, partnership, association, corporation or | ||||
other entity
shall engage in the business of brokering, | ||||
funding, originating, servicing
or purchasing of residential | ||||
mortgage loans without first obtaining a
license from the | ||||
Secretary in accordance with the licensing procedure
provided | ||||
in this Article I and such regulations as may be promulgated by
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the Secretary. The licensing provisions of this Section shall | ||||
not apply
to any entity engaged solely in commercial mortgage | ||||
lending or
to any person, partnership association, corporation | ||||
or other entity
exempted pursuant to Section 1-4, subsection | ||||
(d), of this Act or in accordance
with regulations promulgated | ||||
by the Secretary hereunder. No provision of this Act shall | ||||
apply to an exempt person or entity as defined in items (1) and | ||||
(1.5) of subsection (d) of Section 1-4 of this Act. | ||||
Notwithstanding anything to the contrary in the preceding |
sentence, an individual acting as a mortgage loan originator | ||
who is not employed by and acting for an entity described in | ||
item (1) of subsection (tt) of Section 1-4 of this Act shall be | ||
subject to the mortgage loan originator licensing requirements | ||
of Article VII of this Act. | ||
Effective January 1, 2011, no provision of this Act shall | ||
apply to an exempt person or entity as defined in item (1.8) of | ||
subsection (d) of Section 1-4 of this Act. Notwithstanding | ||
anything to the contrary in the preceding sentence, an | ||
individual acting as a mortgage loan originator who is not | ||
employed by and acting for an entity described in item (1) of | ||
subsection (tt) of Section 1-4 of this Act shall be subject to | ||
the mortgage loan originator licensing requirements of Article | ||
VII of this Act, and provided that an individual acting as a | ||
mortgage loan originator under item (1.8) of subsection (d) of | ||
Section 1-4 of this Act shall be further subject to a | ||
determination by the U.S. Department of Housing and Urban | ||
Development through final rulemaking or other authorized | ||
agency determination under the federal Secure and Fair | ||
Enforcement for Mortgage Licensing Act of 2008. | ||
(a-1) A person who is exempt from licensure pursuant to | ||
paragraph (ii) of item (1) of subsection (d) of Section 1-4 of | ||
this Act as a federally chartered savings bank that is | ||
registered with the Nationwide Multistate Licensing System and | ||
Registry may apply to the Secretary for an exempt company | ||
registration for the purpose of sponsoring one or more |
individuals subject to the mortgage loan originator licensing | ||
requirements of Article VII of this Act. Registration with the | ||
Division of Banking of the Department shall not affect the | ||
exempt status of the applicant. | ||
(1) A mortgage loan originator eligible for licensure | ||
under this subsection shall (A) be covered under an | ||
exclusive written contract with, and originate residential | ||
mortgage loans solely on behalf of, that exempt person; | ||
and (B) hold a current, valid insurance producer license | ||
under Article XXXI of the Illinois Insurance Code. | ||
(2) An exempt person shall: (A) fulfill any reporting | ||
requirements required by the Nationwide Multistate | ||
Licensing System and Registry or the Secretary; (B) | ||
provide a blanket surety bond pursuant to Section 7-12 of | ||
this Act covering the activities of all its sponsored | ||
mortgage loan originators; (C) reasonably supervise the | ||
activities of all its sponsored mortgage loan originators; | ||
(D) comply with all rules and orders (including the | ||
averments contained in Section 2-4 of this Act as | ||
applicable to a non-licensed exempt entity provided for in | ||
this Section) that the Secretary deems necessary to ensure | ||
compliance with the federal SAFE Act; and (E) pay an | ||
annual registration fee established by the Director. | ||
(3) The Secretary may deny an exempt company | ||
registration to an exempt person or fine, suspend, or | ||
revoke an exempt company registration if the Secretary |
finds one of the following: | ||
(A) that the exempt person is not a person of | ||
honesty, truthfulness, or good character; | ||
(B) that the exempt person violated any applicable | ||
law, rule, or order; | ||
(C) that the exempt person refused or failed to | ||
furnish, within a reasonable time, any information or | ||
make any report that may be required by the Secretary; | ||
(D) that the exempt person had a final judgment | ||
entered against him or her in a civil action on grounds | ||
of fraud, deceit, or misrepresentation, and the | ||
conduct on which the judgment is based indicates that | ||
it would be contrary to the interest of the public to | ||
permit the exempt person to manage a loan originator; | ||
(E) that the exempt person had an order entered | ||
against him or her involving fraud, deceit, or | ||
misrepresentation by an administrative agency of this | ||
State, the federal government, or any other state or | ||
territory of the United States, and the facts relating | ||
to the order indicate that it would be contrary to the | ||
interest of the public to permit the exempt person to | ||
manage a loan originator; | ||
(F) that the exempt person made a material | ||
misstatement or suppressed or withheld information on | ||
the application for an exempt company registration or | ||
any document required to be filed with the Secretary; |
or | ||
(G) that the exempt person violated Section 4-5 of | ||
this Act. | ||
(a-5) An entity that is exempt from licensure pursuant to | ||
item (7) of subsection (d) of Section 1-4 of this Act as an | ||
independent loan processing entity shall annually apply to the | ||
Secretary through the Nationwide Multistate Licensing System | ||
and Registry for an exempt company registration for the | ||
purpose of sponsoring one or more individuals subject to the | ||
mortgage loan originator licensing requirements of Article VII | ||
of this Act. A loan processor who performs clerical or support | ||
duties at the direction of and subject to the supervision and | ||
instruction of a licensed mortgage loan originator sponsored | ||
by an independent loan processing entity shall be exempt from | ||
his or her own licensing as a mortgage loan originator. An | ||
independent loan processing entity shall not be subject to | ||
examination by the Secretary. The Secretary may adopt rules to | ||
implement any provisions necessary for the administration of | ||
this subsection. | ||
(b) No person, partnership, association, corporation, or | ||
other entity
except a licensee under this Act or an entity | ||
exempt from licensing
pursuant to Section 1-4, subsection (d), | ||
of this Act shall do any business
under any name or title, or | ||
circulate or use any advertising or make any
representation or | ||
give any information to any person, which indicates or
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reasonably implies activity within the scope
of this Act. |
(c) The Secretary may, through the Attorney General, | ||
request the circuit
court of either Cook or Sangamon County to | ||
issue an injunction to restrain
any person from violating or | ||
continuing to violate any of the foregoing
provisions of this | ||
Section. | ||
(d) When the Secretary has reasonable cause to believe | ||
that any
entity which has not submitted an application for | ||
licensure is conducting
any of the activities described in | ||
subsection (a) hereof, the Secretary
shall have the power to | ||
examine all books and records of the entity and any
additional | ||
documentation necessary in order to determine whether such
| ||
entity should become licensed under this Act. | ||
(d-1) The Secretary may issue orders against any person if | ||
the Secretary has reasonable cause to believe that an unsafe, | ||
unsound, or unlawful practice has occurred, is occurring, or | ||
is about to occur, if any person has violated, is violating, or | ||
is about to violate any law, rule, or written agreement with | ||
the Secretary, or for the purposes of administering the | ||
provisions of this Act and any rule adopted in accordance with | ||
this Act.
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(e) Any person, partnership, association, corporation or | ||
other entity
who violates any provision of this Section | ||
commits a business offense and
shall be fined an amount not to | ||
exceed $25,000. A mortgage loan brokered, funded, originated, | ||
serviced, or purchased by a party who is not licensed under | ||
this Section shall not be held to be invalid solely on the |
basis of a violation under this Section. The changes made to | ||
this Section by Public Act 99-113 are declarative of existing | ||
law. | ||
(f) Each person, partnership, association, corporation or | ||
other entity
conducting activities regulated by this Act shall | ||
be issued one license.
Each full service office , place of | ||
business or location at which a residential mortgage
licensee | ||
conducts any part of his or her business must
be recorded with | ||
the Secretary pursuant to Section 2-8 of this Act. | ||
(g) Licensees under this Act shall solicit, broker, fund, | ||
originate,
service and purchase residential mortgage loans | ||
only in conformity with the
provisions of this Act and such | ||
rules and regulations as may be promulgated
by the Secretary. | ||
(h) This Act applies to all entities doing business in | ||
Illinois as
residential mortgage bankers, as defined by "An | ||
Act to provide for the
regulation of mortgage bankers", | ||
approved September 15, 1977, as amended,
regardless of whether | ||
licensed under that or any prior Act. Any existing
residential | ||
mortgage lender or residential mortgage broker in Illinois
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whether or not previously licensed, must operate in accordance | ||
with this Act. | ||
(i) This Act is a successor Act to and a continuance of the | ||
regulation
of residential mortgage bankers provided in "An Act | ||
to provide for the
regulation of mortgage bankers", approved | ||
September 15, 1977, as amended. | ||
Entities and persons subject to the predecessor Act shall |
be subject to
this Act from and after its effective date. | ||
(Source: P.A. 100-851, eff. 8-14-18; 100-1153, eff. 12-19-18; | ||
101-81, eff. 7-12-19.) | ||
(205 ILCS 635/1-4) | ||
Sec. 1-4. Definitions. The following words and phrases | ||
have the meanings given to them in this Section: | ||
(a) "Residential real property" or "residential real | ||
estate" shall mean any real property located in Illinois, | ||
upon which is constructed or intended to be constructed a | ||
dwelling. Those terms include a manufactured home as | ||
defined in subdivision (53) of Section 9-102 of the | ||
Uniform Commercial Code which is real property as defined | ||
in Section 5-35 of the Conveyance and Encumbrance of | ||
Manufactured Homes as Real Property and Severance Act. | ||
(b) "Making a residential mortgage loan" or "funding a | ||
residential mortgage
loan" shall mean for compensation or | ||
gain, either directly or indirectly,
advancing funds or | ||
making a commitment to advance funds to a loan applicant
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for a residential mortgage loan. | ||
(c) "Soliciting, processing, placing, or negotiating a | ||
residential
mortgage loan" shall mean for compensation or | ||
gain, either directly or
indirectly, accepting or offering | ||
to accept an application for a
residential mortgage loan, | ||
assisting or offering to assist in the
processing of an | ||
application for a residential mortgage loan on behalf of a
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borrower, or negotiating or offering to negotiate the | ||
terms or conditions
of a residential mortgage loan with a | ||
lender on behalf of a borrower
including, but not limited | ||
to, the submission of credit packages for the
approval of | ||
lenders, the preparation of residential mortgage loan | ||
closing
documents, including a closing in the name of a | ||
broker. | ||
(d) "Exempt person or entity" shall mean the | ||
following: | ||
(1) (i) Any banking organization or foreign | ||
banking corporation
licensed by the Illinois | ||
Commissioner of Banks and Real Estate or the
United | ||
States Comptroller of the Currency to transact | ||
business in this
State; (ii) any national bank, | ||
federally chartered savings and loan
association, | ||
federal savings bank, federal credit union; (iii) | ||
(blank); (iv) any bank, savings and loan
association, | ||
savings bank, or credit union organized under the laws | ||
of this
or any other state; (v) any Illinois Consumer | ||
Installment Loan Act licensee;
(vi) any insurance | ||
company authorized to transact business in this State;
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(vii) any entity engaged solely in commercial mortgage | ||
lending; (viii) any
service corporation of a savings | ||
and loan association or savings bank organized
under | ||
the laws of this State or the service corporation of a | ||
federally
chartered savings and loan association or |
savings bank having
its principal place of business in | ||
this State, other than a service
corporation licensed | ||
or entitled to reciprocity under the Real Estate
| ||
License Act of 2000; or (ix) any first tier subsidiary | ||
of a
bank, the charter of which is issued under the | ||
Illinois Banking Act
by the Illinois Commissioner of | ||
Banks and Real Estate,
or the first tier subsidiary of | ||
a bank chartered by the United States
Comptroller of | ||
the Currency and that has its principal place of | ||
business
in this State, provided that the first tier | ||
subsidiary is regularly
examined by the Illinois | ||
Commissioner of Banks and Real Estate
or the | ||
Comptroller of the Currency, or a consumer compliance | ||
examination is
regularly conducted by the Federal | ||
Reserve Board. | ||
(1.5) Any employee of a person or entity mentioned | ||
in
item (1) of this subsection, when acting for such | ||
person or entity, or any registered mortgage loan | ||
originator when acting for an entity described in | ||
subsection (tt) of this Section. | ||
(1.8) Any person or entity that does not originate | ||
mortgage loans in the ordinary course of business, but | ||
makes or acquires residential mortgage loans with his | ||
or her own funds for his or her or its own investment | ||
without intent to make, acquire, or resell more than 3 | ||
residential mortgage loans in any one calendar year. |
(2) (Blank). | ||
(2.1) A bona fide nonprofit organization. | ||
(2.2) An employee of a bona fide nonprofit | ||
organization when acting on behalf of that | ||
organization. | ||
(3) Any person employed by a licensee to assist in | ||
the performance of
the residential mortgage licensee's | ||
activities regulated by this Act who is compensated in | ||
any manner by
only one licensee. | ||
(4) (Blank). | ||
(5) Any individual, corporation, partnership, or | ||
other entity that
originates, services, or brokers | ||
residential mortgage loans, as these
activities are | ||
defined in this Act, and who or which receives no
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compensation for those activities, subject to the | ||
Commissioner's
regulations and the federal Secure and | ||
Fair Enforcement for Mortgage Licensing Act of 2008 | ||
and the rules promulgated under that Act with regard | ||
to the nature and amount of compensation. | ||
(6) (Blank). | ||
(7) Any entity engaged solely in providing loan | ||
processing services through the sponsoring of | ||
individuals acting pursuant to subsection (d) of | ||
Section 7-1A of this Act. | ||
(e) "Licensee" or "residential mortgage licensee" | ||
shall mean a person,
partnership, association, |
corporation, or any other entity who or which is
licensed | ||
pursuant to this Act to engage in the activities regulated | ||
by
this Act. | ||
(f) "Mortgage loan" "residential mortgage loan" or | ||
"home
mortgage loan" shall mean any loan primarily for | ||
personal, family, or household use that is secured by a | ||
mortgage, deed of trust, or other equivalent consensual | ||
security interest on a dwelling as defined in Section | ||
103(v) of the federal Truth in Lending Act, or residential | ||
real estate upon which is constructed or intended to be | ||
constructed a dwelling. | ||
(g) "Lender" shall mean any person, partnership, | ||
association,
corporation, or any other entity who either | ||
lends or invests money in
residential mortgage loans. | ||
(h) "Ultimate equitable owner" shall mean a person | ||
who, directly
or indirectly, owns or controls an ownership | ||
interest in a corporation,
foreign corporation, alien | ||
business organization, trust, or any other form
of | ||
business organization regardless of whether the person | ||
owns or controls
the ownership interest through one or | ||
more persons or one or more proxies,
powers of attorney, | ||
nominees, corporations, associations, partnerships,
| ||
trusts, joint stock companies, or other entities or | ||
devices, or any
combination thereof. | ||
(i) "Residential mortgage financing transaction" shall | ||
mean the negotiation,
acquisition, sale, or arrangement |
for or the offer to negotiate, acquire,
sell, or arrange | ||
for, a residential mortgage loan or residential mortgage
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loan commitment. | ||
(j) "Personal residence address" shall mean a street | ||
address and shall
not include a post office box number. | ||
(k) "Residential mortgage loan commitment" shall mean | ||
a contract for
residential mortgage loan financing. | ||
(l) "Party to a residential mortgage financing | ||
transaction" shall mean a
borrower, lender, or loan broker | ||
in a residential mortgage financing
transaction. | ||
(m) "Payments" shall mean payment of all or any of the | ||
following:
principal, interest and escrow reserves for | ||
taxes, insurance and other related
reserves, and | ||
reimbursement for lender advances. | ||
(n) "Commissioner" shall mean the Commissioner of | ||
Banks and Real Estate, except that, beginning on April 6, | ||
2009 (the effective date of Public Act 95-1047), all | ||
references in this Act to the Commissioner of Banks and | ||
Real Estate are deemed, in appropriate contexts, to be | ||
references to the Secretary of Financial and Professional | ||
Regulation, or his or her designee, including the Director | ||
of the Division of Banking of the Department of Financial | ||
and Professional Regulation. | ||
(n-1) "Director" shall mean the Director of the | ||
Division of Banking of the Department of Financial and | ||
Professional Regulation, except that, beginning on July |
31, 2009 (the effective date of Public Act 96-112), all | ||
references in this Act to the Director are deemed, in | ||
appropriate contexts, to be the Secretary of Financial and | ||
Professional Regulation, or his or her designee, including | ||
the Director of the Division of Banking of the Department | ||
of Financial and Professional Regulation. | ||
(o) "Loan brokering", "brokering", or "brokerage | ||
service" shall mean the act
of helping to obtain from | ||
another entity, for a borrower, a loan secured by
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residential real estate situated in Illinois or assisting | ||
a borrower in
obtaining a loan secured by residential real | ||
estate situated in Illinois in
return for consideration to | ||
be paid by either the borrower or the lender
including, | ||
but not limited to, contracting for the delivery of | ||
residential
mortgage loans to a third party lender and | ||
soliciting, processing, placing,
or negotiating | ||
residential mortgage loans. | ||
(p) "Loan broker" or "broker" shall mean a person, | ||
partnership,
association, corporation, or limited | ||
liability company, other than
those persons, partnerships,
| ||
associations, corporations, or limited liability companies | ||
exempted
from licensing pursuant to Section
1-4, | ||
subsection (d), of this Act, who performs the activities | ||
described
in subsections (c), (o), and (yy) of this | ||
Section. | ||
(q) "Servicing" shall mean the collection or |
remittance for or the
right or obligation to collect or | ||
remit for any lender, noteowner,
noteholder, or for a | ||
licensee's own account, of payments, interests,
principal, | ||
and trust items such as hazard insurance and taxes on a
| ||
residential mortgage loan in accordance with the terms of | ||
the residential
mortgage loan; and includes loan payment | ||
follow-up, delinquency loan
follow-up, loan analysis and | ||
any notifications to the borrower that are
necessary to | ||
enable the borrower to keep the loan current and in good | ||
standing. "Servicing" includes management of third-party | ||
entities acting on behalf of a residential mortgage | ||
licensee for the collection of delinquent payments and the | ||
use by such third-party entities of said licensee's | ||
servicing records or information, including their use in | ||
foreclosure. | ||
(r) "Full service office" shall mean an office, | ||
provided by the licensee and not subleased from the | ||
licensee's employees or independent contractors , and staff | ||
in Illinois
reasonably adequate to handle efficiently | ||
communications, questions, and
other matters relating to | ||
any application for, or an existing home mortgage
secured | ||
by residential real estate situated in Illinois
with | ||
respect to which the licensee is brokering, funding | ||
originating,
purchasing, or servicing. The management and | ||
operation of each full service
office must include | ||
observance of good business practices such as proper |
signage; adequate,
organized, and accurate books and | ||
records; ample phone lines, hours of
business, staff | ||
training and supervision, and provision for a mechanism to
| ||
resolve consumer inquiries, complaints, and problems. The | ||
Commissioner
shall issue regulations with regard to these | ||
requirements and shall include
an evaluation of compliance | ||
with this Section in his or her periodic
examination of | ||
each licensee. "Full service office" does not include a | ||
remote location. | ||
(s) "Purchasing" shall mean the purchase of | ||
conventional or
government-insured mortgage loans secured | ||
by residential real estate
situated in Illinois from | ||
either the lender or from the secondary market. | ||
(t) "Borrower" shall mean the person or persons who | ||
seek the services of
a loan broker, originator, or lender. | ||
(u) "Originating" shall mean the issuing of | ||
commitments for and funding of
residential mortgage loans. | ||
(v) "Loan brokerage agreement" shall mean a written | ||
agreement in which a
broker or loan broker agrees to do | ||
either of the following: | ||
(1) obtain a residential mortgage loan for the | ||
borrower or assist the
borrower in obtaining a | ||
residential mortgage loan; or | ||
(2) consider making a residential mortgage loan to | ||
the borrower. | ||
(w) "Advertisement" shall mean the attempt by |
publication,
dissemination, or circulation to induce, | ||
directly or indirectly,
any person to enter into a | ||
residential mortgage loan agreement or
residential | ||
mortgage loan brokerage agreement relative to a
mortgage | ||
secured by residential real estate situated in Illinois. | ||
(x) (Blank). | ||
(y) "Government-insured mortgage loan" shall mean any | ||
mortgage loan made
on the security of residential real | ||
estate insured by the Department of
Housing and Urban | ||
Development or Farmers Home Loan Administration, or
| ||
guaranteed by the Veterans Administration. | ||
(z) "Annual audit" shall mean a certified audit of the | ||
licensee's books and
records and systems of internal | ||
control performed by a certified public
accountant in | ||
accordance with generally accepted accounting principles
| ||
and generally accepted auditing standards. | ||
(aa) "Financial institution" shall mean a savings and | ||
loan
association, savings bank, credit union, or a bank | ||
organized under the
laws of Illinois or a savings and loan | ||
association, savings bank,
credit union or a bank | ||
organized under the laws of the United States and
| ||
headquartered in Illinois. | ||
(bb) "Escrow agent" shall mean a third party, | ||
individual or entity
charged with the fiduciary obligation | ||
for holding escrow funds on a
residential mortgage loan | ||
pending final payout of those funds
in accordance with the |
terms of the residential mortgage loan. | ||
(cc) "Net worth" shall have the meaning ascribed | ||
thereto in Section 3-5
of this Act. | ||
(dd) "Affiliate" shall mean: | ||
(1) any entity that directly controls or is | ||
controlled by the licensee
and any other company that | ||
is directly affecting activities regulated by
this Act | ||
that is controlled by the company that controls the | ||
licensee; | ||
(2) any entity: | ||
(A) that is controlled, directly or | ||
indirectly, by a trust or otherwise,
by or for the | ||
benefit of shareholders who beneficially or | ||
otherwise
control, directly or indirectly, by | ||
trust or otherwise, the licensee or any
company | ||
that controls the licensee; or | ||
(B) a majority of the directors or trustees of | ||
which constitute a
majority of the persons holding | ||
any such office with the licensee or any
company | ||
that controls the licensee; | ||
(3) any company, including a real estate | ||
investment trust, that is
sponsored and advised on a | ||
contractual basis by the licensee or any
subsidiary or | ||
affiliate of the licensee. | ||
(ee) "First tier subsidiary" shall be defined by | ||
regulation
incorporating the comparable definitions used |
by the Office of the
Comptroller of the Currency and the | ||
Illinois Commissioner of Banks
and Real Estate. | ||
(ff) "Gross delinquency rate" means the quotient | ||
determined by dividing
(1) the sum of (i) the number of | ||
government-insured residential mortgage loans
funded or | ||
purchased by a licensee in the preceding calendar year | ||
that are
delinquent and (ii) the number of conventional | ||
residential mortgage loans
funded or purchased by the | ||
licensee in the preceding calendar year that are
| ||
delinquent by (2) the sum of (i) the number of | ||
government-insured residential
mortgage loans funded or | ||
purchased by the licensee in the preceding calendar
year | ||
and (ii) the number of conventional residential mortgage | ||
loans funded or
purchased by the licensee in the preceding | ||
calendar year. | ||
(gg) "Delinquency rate factor" means the factor set by | ||
rule of the
Commissioner that is multiplied by the average | ||
gross delinquency rate of
licensees, determined annually | ||
for the immediately preceding calendar year, for
the | ||
purpose of determining which licensees shall be examined | ||
by the
Commissioner pursuant to subsection (b) of Section | ||
4-8 of this Act. | ||
(hh) (Blank). | ||
(ii) "Confidential supervisory information" means any | ||
report of examination, visitation, or investigation | ||
prepared by the Commissioner under this Act, any report of |
examination visitation, or investigation prepared by the | ||
state regulatory authority of another state that examines | ||
a licensee, any document or record prepared or obtained in | ||
connection with or relating to any examination, | ||
visitation, or investigation, and any record prepared or | ||
obtained by the Commissioner to the extent that the record | ||
summarizes or contains information derived from any | ||
report, document, or record described in this subsection. | ||
"Confidential supervisory information" does not include | ||
any information or record routinely prepared by a licensee | ||
and maintained in the ordinary course of business or any | ||
information or record that is required to be made publicly | ||
available pursuant to State or federal law or rule.
| ||
(jj) "Mortgage loan originator" means an individual | ||
who for compensation or gain or in the expectation of | ||
compensation or gain: | ||
(i) takes a residential mortgage loan application; | ||
or | ||
(ii) offers or negotiates terms of a residential | ||
mortgage loan. | ||
"Mortgage loan originator" includes an individual | ||
engaged in loan modification activities as defined in | ||
subsection (yy) of this Section. A mortgage loan | ||
originator engaged in loan modification activities shall | ||
report those activities to the Department of Financial and | ||
Professional Regulation in the manner provided by the |
Department; however, the Department shall not impose a fee | ||
for reporting, nor require any additional qualifications | ||
to engage in those activities beyond those provided | ||
pursuant to this Act for mortgage loan originators. | ||
"Mortgage loan originator" does not include an | ||
individual engaged solely as a loan processor or | ||
underwriter except as otherwise provided in subsection (d) | ||
of Section 7-1A of this Act. | ||
"Mortgage loan originator" does not include a person | ||
or entity that only performs real estate brokerage | ||
activities and is licensed in accordance with the Real | ||
Estate License Act of 2000, unless the person or entity is | ||
compensated by a lender, a mortgage broker, or other | ||
mortgage loan originator, or by any agent of that lender, | ||
mortgage broker, or other mortgage loan originator. | ||
"Mortgage loan originator" does not include a person | ||
or entity solely involved in extensions of credit relating | ||
to timeshare plans, as that term is defined in Section | ||
101(53D) of Title 11, United States Code. | ||
(kk) "Depository institution" has the same meaning as | ||
in Section 3 of the Federal Deposit Insurance Act, and | ||
includes any credit union. | ||
(ll) "Dwelling" means a residential structure or | ||
mobile home which contains one to 4 family housing units, | ||
or individual units of condominiums or cooperatives. | ||
(mm) "Immediate family member" means a spouse, child, |
sibling, parent, grandparent, or grandchild, and includes | ||
step-parents, step-children, step-siblings, or adoptive | ||
relationships. | ||
(nn) "Individual" means a natural person. | ||
(oo) "Loan processor or underwriter" means an | ||
individual who performs clerical or support duties as an | ||
employee at the direction of and subject to the | ||
supervision and instruction of a person licensed, or | ||
exempt from licensing, under this Act. "Clerical or | ||
support duties" includes subsequent to the receipt of an | ||
application: | ||
(i) the receipt, collection, distribution, and | ||
analysis of information common for the processing or | ||
underwriting of a residential mortgage loan; and | ||
(ii) communicating with a consumer to obtain the | ||
information necessary for the processing or | ||
underwriting of a loan, to the extent that the | ||
communication does not include offering or negotiating | ||
loan rates or terms, or counseling consumers about | ||
residential mortgage loan rates or terms. An | ||
individual engaging solely in loan processor or | ||
underwriter activities shall not represent to the | ||
public, through advertising or other means of | ||
communicating or providing information, including the | ||
use of business cards, stationery, brochures, signs, | ||
rate lists, or other promotional items, that the |
individual can or will perform any of the activities | ||
of a mortgage loan originator. | ||
(pp) "Nationwide Multistate Licensing System and | ||
Registry" means a mortgage licensing system developed and | ||
maintained by the Conference of State Bank Supervisors and | ||
the American Association of Residential Mortgage | ||
Regulators for the licensing and registration of licensed | ||
mortgage loan originators. | ||
(qq) "Nontraditional mortgage product" means any | ||
mortgage product other than a 30-year fixed rate mortgage. | ||
(rr) "Person" means a natural person, corporation, | ||
company, limited liability company, partnership, or | ||
association. | ||
(ss) "Real estate brokerage activity" means any | ||
activity that involves offering or providing real estate | ||
brokerage services to the public, including: | ||
(1) acting as a real estate agent or real estate | ||
broker for a buyer, seller, lessor, or lessee of real | ||
property; | ||
(2) bringing together parties interested in the | ||
sale, purchase, lease, rental, or exchange of real | ||
property; | ||
(3) negotiating, on behalf of any party, any | ||
portion of a contract relating to the sale, purchase, | ||
lease, rental, or exchange of real property, other | ||
than in connection with providing financing with |
respect to any such transaction; | ||
(4) engaging in any activity for which a person | ||
engaged in the activity is required to be registered | ||
or licensed as a real estate agent or real estate | ||
broker under any applicable law; or | ||
(5) offering to engage in any activity, or act in | ||
any capacity, described in this subsection (ss). | ||
(tt) "Registered mortgage loan originator" means any | ||
individual that: | ||
(1) meets the definition of mortgage loan | ||
originator and is an employee of: | ||
(A) a depository institution; | ||
(B) a subsidiary that is: | ||
(i) owned and controlled by a depository | ||
institution; and | ||
(ii) regulated by a federal banking | ||
agency; or | ||
(C) an institution regulated by the Farm | ||
Credit Administration; and | ||
(2) is registered with, and maintains a unique | ||
identifier through, the Nationwide Multistate | ||
Licensing System and Registry. | ||
(uu) "Unique identifier" means a number or other | ||
identifier assigned by protocols established by the | ||
Nationwide Multistate Licensing System and Registry. | ||
(vv) "Residential mortgage license" means a license |
issued pursuant to Section 1-3, 2-2, or 2-6 of this Act. | ||
(ww) "Mortgage loan originator license" means a | ||
license issued pursuant to Section 7-1A, 7-3, or 7-6 of | ||
this Act. | ||
(xx) "Secretary" means the Secretary of the Department | ||
of Financial and Professional Regulation, or a person | ||
authorized by the Secretary or by this Act to act in the | ||
Secretary's stead. | ||
(yy) "Loan modification" means, for compensation or | ||
gain, either directly or indirectly offering or | ||
negotiating on behalf of a borrower or homeowner to adjust | ||
the terms of a residential mortgage loan in a manner not | ||
provided for in the original or previously modified | ||
mortgage loan. | ||
(zz) "Short sale facilitation" means, for compensation | ||
or gain, either directly or indirectly offering or | ||
negotiating on behalf of a borrower or homeowner to | ||
facilitate the sale of residential real estate subject to | ||
one or more residential mortgage loans or debts | ||
constituting liens on the property in which the proceeds | ||
from selling the residential real estate will fall short | ||
of the amount owed and the lien holders are contacted to | ||
agree to release their lien on the residential real estate | ||
and accept less than the full amount owed on the debt. | ||
(aaa) "Bona fide nonprofit organization" means an | ||
organization that is described in Section 501(c)(3) of the |
Internal Revenue Code, is exempt from federal income tax | ||
under Section 501(a) of the Internal Revenue Code, does | ||
not operate in a commercial context, and does all of the | ||
following: | ||
(1) Promotes affordable housing or provides home | ||
ownership education or similar services. | ||
(2) Conducts its activities in a manner that | ||
serves public or charitable purposes. | ||
(3) Receives funding and revenue and charges fees | ||
in a manner that does not create an incentive for | ||
itself or its employees to act other than in the best | ||
interests of its clients. | ||
(4) Compensates its employees in a manner that | ||
does not create an incentive for its employees to act | ||
other than in the best interests of its clients. | ||
(5) Provides to, or identifies for, the borrower | ||
residential mortgage loans with terms favorable to the | ||
borrower and comparable to residential mortgage loans | ||
and housing assistance provided under government | ||
housing assistance programs. | ||
(bbb) "Remote location" means a location other than a | ||
principal place of business or a full service office at | ||
which a mortgage loan originator of a licensee may conduct | ||
business. | ||
The Commissioner may define by rule and regulation any | ||
terms used
in this Act for the efficient and clear |
administration of this Act. | ||
(Source: P.A. 100-783, eff. 8-10-18; 100-851, eff. 8-14-18; | ||
100-1153, eff. 12-19-18; 101-81, eff. 7-12-19.) | ||
(205 ILCS 635/3-11 new) | ||
Sec. 3-11. Remote location operations. Licensees may allow | ||
mortgage loan originators to work from a remote location if: | ||
(1) the licensee has written policies and procedures | ||
for the supervision of mortgage loan originators working | ||
from a remote location; | ||
(2) access to company platforms and customer | ||
information is in accordance with the licensee's | ||
comprehensive written information security plan; | ||
(3) no in-person customer interaction occurs at a | ||
mortgage originator's residence unless that residence is a | ||
licensed location; | ||
(4) physical records are not maintained at a remote | ||
location; | ||
(5) customer interactions and conversations about | ||
consumers will be in compliance with federal and State | ||
information security requirements, including applicable | ||
provisions under the federal Gramm-Leach-Bliley Act and | ||
the Safeguards Rule established by the Federal Trade | ||
Commission and set forth in 16 CFR Part 314, as such | ||
requirements may be amended from time to time; | ||
(6) mortgage loan originators working at a remote |
location access the company's secure systems, including a | ||
cloud-based system, directly from any out-of-office device | ||
the mortgage loan originator uses, including, but not | ||
limited to, a laptop, phone, desktop computer, or tablet, | ||
via a virtual private network or comparable system that | ||
ensures secure connectivity and requires passwords or | ||
other forms of authentication to access; | ||
(7) the licensee ensures that appropriate security | ||
updates, patches, or other alterations to the security of | ||
all devices used at remote locations are installed and | ||
maintained; | ||
(8) the licensee has an ability to remotely lock or | ||
erase company-related contents of any device or otherwise | ||
remotely limit all access to a company's secure systems; | ||
and | ||
(9) the Nationwide Multistate Licensing System and
| ||
Registry record of a loan originator that works from a | ||
remote location designates the principal place of business | ||
as the loan originator's registered location unless the | ||
loan originator elects another licensed branch office as a | ||
registered location.
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