Public Act 099-0113
 
HB2814 EnrolledLRB099 08624 MGM 28787 b

    AN ACT concerning regulation.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Residential Mortgage License Act of 1987 is
amended by changing Section 1-3 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
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 Mortgage 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 Mortgage 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.
    (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
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.
    (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 this amendatory Act of the 99th General
Assembly 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 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 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. 97-143, eff. 7-14-11; 98-492, eff. 8-16-13.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.