Sen. Kwame Raoul
Filed: 5/6/2009
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1 | AMENDMENT TO HOUSE BILL 4011
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2 | AMENDMENT NO. ______. Amend House Bill 4011 on page 1, line | ||||||
3 | 5, by replacing "1-2," with "1-2, 1-3,"; and | ||||||
4 | on page 1, line 6, by replacing "4-8.3, and" with "4-8.3, 7-1, | ||||||
5 | and"; and
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6 | on page 3, immediately below line 19, by inserting the | ||||||
7 | following:
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8 | "(205 ILCS 635/1-3) (from Ch. 17, par. 2321-3)
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9 | Sec. 1-3. Necessity for License; Scope of Act.
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10 | (a) No person, partnership, association, corporation or | ||||||
11 | other entity
shall engage in the business of brokering, | ||||||
12 | funding, originating, servicing
or purchasing of residential | ||||||
13 | mortgage loans without first obtaining a
license from the | ||||||
14 | Commissioner in accordance with the licensing procedure
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15 | provided in this Article I and such regulations as may be |
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1 | promulgated by
the Commissioner. The licensing provisions of | ||||||
2 | this Section shall not apply
to any entity engaged solely in | ||||||
3 | commercial mortgage lending or
to any person, partnership | ||||||
4 | association, corporation or other entity
exempted pursuant to | ||||||
5 | Section 1-4, subsection (d), of this Act or in accordance
with | ||||||
6 | regulations promulgated by the Commissioner hereunder. No | ||||||
7 | provision of this Act shall apply to an exempt person or entity | ||||||
8 | as defined in items (1) and (1.5) of subsection (d) of Section | ||||||
9 | 1-4 of this Act.
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10 | (b) No person, partnership, association, corporation, or | ||||||
11 | other entity
except a licensee under this Act or an entity | ||||||
12 | exempt from licensing
pursuant to Section 1-4, subsection (d), | ||||||
13 | of this Act shall do any business
under any name or title, or | ||||||
14 | circulate or use any advertising or make any
representation or | ||||||
15 | give any information to any person, which indicates or
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16 | reasonably implies activity within the scope
of this Act.
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17 | (c) The Commissioner may, through the Attorney General, | ||||||
18 | request the circuit
court of either Cook or Sangamon County to | ||||||
19 | issue an injunction to restrain
any person from violating or | ||||||
20 | continuing to violate any of the foregoing
provisions of this | ||||||
21 | Section.
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22 | (d) When the Commissioner has reasonable cause to believe | ||||||
23 | that any
entity which has not submitted an application for | ||||||
24 | licensure is conducting
any of the activities described in | ||||||
25 | subsection (a) hereof, the Commissioner
shall have the power to | ||||||
26 | examine all books and records of the entity and any
additional |
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1 | documentation necessary in order to determine whether such
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2 | entity should become licensed under this Act.
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3 | (d-1) The Commissioner may issue orders against any person | ||||||
4 | if the Commissioner has reasonable cause to believe that an | ||||||
5 | unsafe, unsound, or unlawful practice has occurred, is | ||||||
6 | occurring, or is about to occur, if any person has violated, is | ||||||
7 | violating, or is about to violate any law, rule, or written | ||||||
8 | agreement with the Commissioner, or for the purposes of | ||||||
9 | administering the provisions of this Act and any rule adopted | ||||||
10 | in accordance with this Act.
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11 | (e) Any person, partnership, association, corporation or | ||||||
12 | other entity
who violates any provision of this Section commits | ||||||
13 | a business offense and
shall be fined an amount not to exceed | ||||||
14 | $25,000.
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15 | (f) Each person, partnership, association, corporation or | ||||||
16 | other entity
conducting activities regulated by this Act shall | ||||||
17 | be issued one license.
Each office, place of business or | ||||||
18 | location at which a residential mortgage
licensee conducts any | ||||||
19 | part of his or her business must
be recorded with the | ||||||
20 | Commissioner pursuant to Section 2-8 of this Act.
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21 | (g) Licensees under this Act shall solicit, broker, fund, | ||||||
22 | originate,
service and purchase residential mortgage loans | ||||||
23 | only in conformity with the
provisions of this Act and such | ||||||
24 | rules and regulations as may be promulgated
by the | ||||||
25 | Commissioner.
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26 | (h) This Act applies to all entities doing business in |
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1 | Illinois as
residential mortgage bankers, as defined by "An Act | ||||||
2 | to provide for the
regulation of mortgage bankers", approved | ||||||
3 | September 15, 1977, as amended,
regardless of whether licensed | ||||||
4 | under that or any prior Act. Any existing
residential mortgage | ||||||
5 | lender or residential mortgage broker in Illinois
whether or | ||||||
6 | not previously licensed, must operate in accordance with this | ||||||
7 | Act.
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8 | (i) This Act is a successor Act to and a continuance of the | ||||||
9 | regulation
of residential mortgage bankers provided in, "An Act | ||||||
10 | to provide for the
regulation of mortgage bankers", approved | ||||||
11 | September 15, 1977, as amended.
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12 | Entities and persons subject to the predecessor Act shall | ||||||
13 | be subject to
this Act from and after its effective date.
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14 | (Source: P.A. 93-1018, eff. 1-1-05.)"; and
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15 | on page 6, by replacing lines 1 through 3 with the following: | ||||||
16 | "(1.5) Any employee of a person or entity mentioned in | ||||||
17 | item (1) of this subsection , when acting for such person or | ||||||
18 | entity, or any registered mortgage loan originator when | ||||||
19 | acting for an entity described in subsection (tt) of this | ||||||
20 | Section ."; and | ||||||
21 | on page 7, immediately below line 12, by inserting the | ||||||
22 | following: | ||||||
23 | " (7) A nonprofit organization that is recognized as tax | ||||||
24 | exempt under 26 U.S.C. 501(c)(3) whose primary activity is |
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1 | the construction, remodeling, or rehabilitation of homes | ||||||
2 | for sale to and or use by low-income families is exempt | ||||||
3 | from this Section provided that: | ||||||
4 | (A) the nonprofit organization makes no profit | ||||||
5 | mortgage loans to low-income families; and | ||||||
6 | (B) no fees accrue directly to the nonprofit | ||||||
7 | organization from those mortgage loans. "; and
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8 | on page 19, immediately below line 18, by inserting the | ||||||
9 | following: | ||||||
10 | " (vv) "Residential mortgage license" means a license | ||||||
11 | issued pursuant to Section 1-3, 2-2, or 2-6 of this Act. | ||||||
12 | (ww) "Mortgage loan originator license" means a license | ||||||
13 | issued pursuant to Section 7-1A, 7-3, or 7-6 of this Act. "; and
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14 | on page 48, line 12, by replacing "in duplicate" with " in | ||||||
15 | duplicate "; and | ||||||
16 | on page 48, line 16, after "Commissioner", by inserting " or on | ||||||
17 | the Nationwide Mortgage Licensing System and Registry "; and | ||||||
18 | on page 59, line 13, by replacing " brokering " with " brokerage "; | ||||||
19 | and | ||||||
20 | by replacing line 9 on page 60 through line 22 on page 62 with | ||||||
21 | the following:
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1 | "(205 ILCS 635/7-1)
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2 | Sec. 7-1. Registration required; rules and regulations. | ||||||
3 | Beginning 6 months
after the effective date of this amendatory | ||||||
4 | Act of the 93rd General Assembly,
it is unlawful for any | ||||||
5 | natural person to act or assume to act as a loan
originator, as | ||||||
6 | defined in subsection (hh) of Section 1-4, without being
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7 | registered with the Commissioner unless the natural person is | ||||||
8 | exempt under
items (1) and (1.5) of subsection (d) of Section | ||||||
9 | 1-4 of this Act. The
Commissioner shall promulgate
rules
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10 | prescribing the criteria for the registration and regulation of | ||||||
11 | loan
originators, including but not limited to, | ||||||
12 | qualifications, fees, examination,
education, supervision, and | ||||||
13 | enforcement. This Section shall not be effective on or after | ||||||
14 | (1) the operability date of January 1, 2011 or (2) the | ||||||
15 | operability date selected pursuant to Section 7-1A of this Act | ||||||
16 | for a mortgage loan originator license; provided, however, that | ||||||
17 | a violation of this Section committed before the operability | ||||||
18 | date remains subject to penalties authorized by this Act.
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19 | (Source: P.A. 93-561, eff. 1-1-04.)
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20 | (205 ILCS 635/7-1A new) | ||||||
21 | Sec. 7-1A. Mortgage loan originator license. | ||||||
22 | (a) It is unlawful for any individual to act or assume to | ||||||
23 | act as a mortgage loan originator, as defined in subsection | ||||||
24 | (jj) of Section 1-4 of this Act, without obtaining a license |
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1 | from the Director, unless the individual is exempt under | ||||||
2 | subsection (c) of this Section. Each licensed mortgage loan | ||||||
3 | originator must register with and maintain a valid unique | ||||||
4 | identifier issued by the Nationwide Mortgage Licensing System | ||||||
5 | and Registry. | ||||||
6 | (b) In order to facilitate an orderly transition to | ||||||
7 | licensing and minimize disruption in the mortgage marketplace, | ||||||
8 | the operability date for subsection (a) of this Section shall | ||||||
9 | be January 1, 2011, or any later date approved by the Secretary | ||||||
10 | of the U.S. Department of Housing and Urban Development, | ||||||
11 | pursuant to the authority granted under federal Public Law | ||||||
12 | 110-289, Section 1508(a), provided that for all individuals who | ||||||
13 | are loss mitigation specialists employed by servicers, the | ||||||
14 | operability date shall be July 31, 2011, or any later date | ||||||
15 | approved by the Secretary of the U.S. Department of Housing and | ||||||
16 | Urban Development pursuant to authority granted under Public | ||||||
17 | Law 110-289, Section 1508(a). | ||||||
18 | (c) The following, when engaged in the following | ||||||
19 | activities, are exempt from this Act: | ||||||
20 | (1) Registered mortgage loan originators, when acting | ||||||
21 | for an entity described in subsection (tt) of Section 1-4. | ||||||
22 | (2) Any individual who offers or negotiates terms of a | ||||||
23 | residential mortgage loan with or on behalf of an immediate | ||||||
24 | family member of the individual. | ||||||
25 | (3) Any individual who offers or negotiates terms of a | ||||||
26 | residential mortgage loan secured by a dwelling that served |
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1 | as the individual's residence. | ||||||
2 | (4) A licensed attorney who negotiates the terms of a | ||||||
3 | residential mortgage loan on behalf of a client as an | ||||||
4 | ancillary matter to the attorney's representation of the | ||||||
5 | client, unless the attorney is compensated by a lender, a | ||||||
6 | mortgage broker, or other mortgage loan originator or by | ||||||
7 | any agent of a lender, mortgage broker, or other mortgage | ||||||
8 | loan originator. | ||||||
9 | (d) A loan processor or underwriter who is an independent | ||||||
10 | contractor may not engage in the activities of a loan processor | ||||||
11 | or underwriter unless he or she obtains and maintains a license | ||||||
12 | under subsection (a) of this Section. Each independent | ||||||
13 | contractor loan processor or underwriter licensed as a mortgage | ||||||
14 | loan originator must have and maintain a valid unique | ||||||
15 | identifier issued by the Nationwide Mortgage Licensing System | ||||||
16 | and Registry. | ||||||
17 | (e) For the purposes of implementing an orderly and | ||||||
18 | efficient licensing process, the Director may establish | ||||||
19 | licensing rules or regulations and interim procedures for | ||||||
20 | licensing and acceptance of applications. For previously | ||||||
21 | registered or licensed individuals, the Director may establish | ||||||
22 | expedited review and licensing procedures. "; and | ||||||
23 | on page 66, line 18, by replacing " 7-11 " with " 7-12 ".
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