HB4028 96TH GENERAL ASSEMBLY

LRB096 04879 KTG 21758 b

96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB4028

Introduced 2/26/2009, by Rep. Daniel J. Burke

SYNOPSIS AS INTRODUCED:

See Index

Creates the Conveyance and Encumbrance of Manufactured Homes Act and amends the Mobile Home Local Services Tax Act, the Illinois Banking Act, the Illinois Savings and Loan Act of 1985, the Savings Bank Act, the Illinois Credit Union Act, the Residential Mortgage License Act of 1987, the Abandoned Mobile Home Act, the Illinois Vehicle Code, the Code of Civil Procedure, the Conveyances Act, the Residential Real Property Disclosure Act, the Mortgage Act, the Joint Tenancy Act, the Interest Act, the Motor Vehicle Retail Installment Sales Act, and the Retail Installment Sales Act. Establishes a statutory procedure for converting to real property manufactured homes that are affixed to real property and for the severance of manufactured homes from real property. Contains provisions regarding the definition of the term "manufactured home"; conditions that must be met to convey or voluntarily encumber a manufactured home as real property; filing and recording requirements for an affidavit of affixation and affidavit of severance; the effect of affixation and record notice on a perfected security interest in or lien on a manufactured home; notice requirements to the Secretary of State; the applicability of the Conveyance and Encumbrance of Manufactured Homes Act; filing requirements for the Secretary of State as to certificates of title and affidavits of affixation or severance; statutory requirements to properly surrender title to a manufactured home, surrender a Manufacture's Statement of Origin to a manufactured home, and to confirm conversion of a manufactured home as real property; and other matters. Effective July 1, 2010.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Conveyance and Encumbrance of Manufactured Homes Act.

Section 5. Findings and purpose.

(a) The General Assembly finds that there is a need to clarify the legal status of manufactured homes affixed or to be affixed to real property in the state.

(b) The purpose of this Act is to establish a clear statutory procedure for converting to real property manufactured homes that are affixed to such real property and for the severance of manufactured homes from real property.

Section 10. Manufactured home; permanently affixed to real property. For the purposes of this Act, "manufactured home" means a manufactured home as defined in subdivision (53) of Section 9-102 of the Uniform Commercial Code. For purposes of this Act, a manufactured home is "permanently affixed" if it is anchored to real property by attachment to a permanent foundation; constructed pursuant to applicable state and local building codes and manufacturer specifications as provided in 24 C.F.R. Part 3285; and connected to residential utilities (such as water, gas, electricity, or sewer or septic service). Nothwithstanding the foregoing, for the purposes of 11 USC 1322(b)(2), a manufactured home shall be deemed to be real property.

Section 15. Record Notice. To convey or voluntarily encumber a manufactured home as real property, the following conditions shall be met:

(1) the manufactured home shall be permanently affixed to real property;

(2) the ownership interests in the manufactured home and the real property to which the manufactured home is or shall be permanently affixed shall be identical, provided, however, that the owner of the manufactured home, if not the owner of the real property, is in possession of the real property pursuant to the terms of a lease in recordable form that has a term that continues for at least 20 years after the date of execution, and has the consent of the lessor of the real property;

(3) the person or persons having an ownership interest in the manufactured home shall execute and record with the recording officer of the county in which the real property is located, an affidavit of affixation as provided in Section 20 of this Act, and satisfy any other applicable requirements of this Act; and

(4) upon receipt of a certified copy of the affidavit of affixation pursuant to Section 30 of this Act, any person designated therein for filing with the Secretary of State shall file the certified copy of affidavit of affixation with the Secretary of State. Except that:

(A) in a case described in subsection (a)(4)(A)(i) of Section 20 of this Act, a certified copy of the affidavit of affixation and the original Manufacturer's Statement of Origin, each as recorded in the county in which the real property is located, shall be filed with the Secretary of State pursuant to Section 3-116.1 of the Illinois Vehicle Code;

(B) in a case described in subsection (a)(4)(B)(i) of Section 20 of this Act, a certified copy of the affidavit of affixation as recorded in the county in which the real property is located, and the original certificate of title shall be filed with the Secretary of State pursuant to Section 3-116.2 of the Illinois Vehicle Code; and

(C) in a case described in subsections (a)(4)(A)(ii), (a)(4)(B)(ii), or (a)(6) of Section 20 of this Act, a certified copy of the affidavit of affixation and an application for confirmation of conversion shall be filed with the Secretary of State pursuant to Section 3-116.3 of the Illinois Vehicle Code.

Section 20. Affidavit of affixation.

(a) An affidavit of affixation shall contain or be accompanied by:

(1) the name of the manufacturer, the make, the model name, the model year, the dimensions, the vehicle identification number or numbers of the manufactured home, and whether the manufactured home is new or used;

(2)(A) a statement that the party executing the affidavit is the owner of the real property described therein; or, (B) if not the owner of the real property, (i) a statement that the party executing the affidavit is in possession of the real property pursuant to the terms of a lease in recordable form that has a term that continues for at least 20 years after the date of execution of the affidavit, and (ii) the consent of the lessor of the real property endorsed upon or attached to the affidavit and acknowledged or proved in the manner as to entitle a conveyance to be recorded;

(3) the street address and the legal description of the real property to which the manufactured home is or shall be permanently affixed;

(4) as applicable:

(A) if the manufactured home is not covered by a certificate of title, a statement by the owner to that effect, and either:

(i) a statement by the owner of the manufactured home that the manufactured home is covered by a Manufacturer's Statement of Origin, the date the Manufacturer's Statement of Origin was issued, the vehicle identification number or numbers of the manufactured home, and a statement that annexed to the affidavit of affixation is the original Manufacturer's Statement of Origin for the manufactured home, duly endorsed to the owner of the manufactured home, and that the owner of the manufactured home shall surrender the Manufacturer's Statement of Origin; or

(ii) a statement that the owner of the manufactured home, after diligent search and inquiry, is unable to produce the original Manufacturer's Statement of Origin for the manufactured home and that the owner of the manufactured home shall apply to the Secretary of State for a confirmation of conversion of the manufactured home;

(B) if the manufactured home is covered by a certificate of title, either:

(i) a statement by the owner of the manufactured home that the manufactured home is covered by a certificate of title, the date the title was issued, the title number, and that the owner of the manufactured home shall surrender the title; or

(ii) a statement by the owner of the manufactured home that the manufactured home is covered by a certificate of title, but after diligent search and inquiry the owner is unable to produce the certificate of title for the manufactured home, and that the owner of the manufactured home shall apply to the Secretary of State for a confirmation of conversion of the manufactured home;

(5) a statement whether or not the manufactured home is subject to one or more security interests or liens, and:

(A) if the manufactured home is subject to one or more security interests or liens, the name and address of each party holding a security interest in or lien on the manufactured home, including but not limited to, each holder shown on any certificate of title issued by the Secretary of State, if any; the original principal amount secured by each security interest or lien; and a statement that the security interest or lien shall be released; or

(B) a statement that each security interest in or lien on the manufactured home, if any, has been released, together with due proof of each such release;

(6) if the manufactured home is covered by neither a Manufacturer's Statement of Origin nor a certificate of title, a statement by the owner of the manufactured home to that effect, and that the owner of the manufactured home shall apply to the Secretary of State for a confirmation of conversion of the manufactured home;

(7) a statement that the manufactured home is or shall be permanently affixed to the real property; and

(8) the name and address of a person designated for filing the certified copy of the affidavit of affixation with the Secretary of State, to whom the recording officer shall return the certified copy of the affidavit of affixation after it has been duly recorded in the real property records, as provided in Section 30 of this Act.

(b) An affidavit of affixation shall be in the form set forth in subsection (c) of this Section, duly acknowledged or proved in like manner as to entitle a conveyance to be recorded, and when so acknowledged or proved and upon payment of the lawful fees therefor, the recording officer shall immediately cause the affidavit of affixation and any attachments thereto to be duly recorded and indexed in the record of deeds.

(c) An affidavit of affixation shall be in the form set forth below:

The fee for recording and issuing a certified copy of an affidavit of affixation shall be $ _________.

Section 25. Disposition of liens. Neither the act of permanently affixing a manufactured home to real property, nor the recording of the affidavit of affixation shall impair the rights of any holder of a security interest in or lien on a manufactured home that was perfected as provided in Section 3-202 of the Illinois Vehicle Code, unless and until an application to (i) surrender the title, as provided in Section 3-116.2 of the Illinois Vehicle Code, and (ii) release the security interest or lien, as provided in Section 3-205 of the Illinois Vehicle Code, has been duly filed with and accepted by the Secretary of State. Upon the filing of the release, such perfected security interest or lien is terminated. The recording of an affidavit of affixation does not change the character of any security interest or lien noted on a certificate of title, and no recording tax shall be imposed at the time an affidavit of affixation is recorded upon any security interest in or lien on a manufactured home perfected under Section 3-202 of the Illinois Vehicle Code.

Section 30. Notice to Secretary of State. Upon payment of the fees provided by law and recordation of the affidavit of affixation, the recording officer shall endorse the affidavit as "recorded in land records", setting forth thereon the indexing information for the affidavit of affixation; and the recording officer shall forthwith forward a certified copy of the affidavit of affixation and all attachments thereto to the person designated therein for filing with the Secretary of State. Upon receipt of a certified copy of the affidavit of affixation by the person designated therein for filing with the Secretary of State, that person shall forthwith deliver for filing to the Secretary of State the certified copy of the affidavit of affixation and other documents as provided in subsection (4) of Section 15 of this Act.

Section 35. Effect of recorded affidavit of affixation. A manufactured home shall be deemed to be real property when all of the following events have occurred:

(a) the manufactured home is permanently affixed to land as provided in Section 10 of this Act;

(b) an affidavit of affixation conforming to the requirements of Section 20 of this Act has been recorded;

(c) a certified copy of the affidavit of affixation has been delivered for filing to the Secretary of State as provided in Section 30 of this Act; and

(d) the requirements of Section 3-116.1, 3-116.2, or 3-116.3 of the Illinois Vehicle Code, as applicable, have been satisfied.

Section 40. Conveyance and encumbrance as real property. Upon the satisfaction of the requirements of Section 35 of this Act and, as applicable, the requirements of Section 3-116.1, 3-116.2, or 3-116.3 of the Illinois Vehicle Code, the manufactured home shall be deemed to be real property; any mortgage, deed of trust, lien or security interest which can attach to land and buildings erected thereon or fixtures affixed thereto shall attach as of the date of its recording in the same manner as if the manufactured home were built from ordinary building materials on site; title to the manufactured home shall be transferred by deed or other form of conveyance that is effective to transfer an interest in real property, together with the land to which the structure has been affixed; and the manufactured home shall be deemed to be real property and shall be governed by the laws applicable to real property.

Section 45. Manufactured home that remains personal property or a fixture. Except as provided in Sections 20, 30, 35, and 40 of this Act, an affidavit of affixation is not necessary or effective to convey or encumber a manufactured home or to change the character of a manufactured home to real property. Every conveyance of land upon which is located a manufactured home for which no affidavit of affixation has been recorded or for which an affidavit of severance has been recorded, shall contain a recital that such conveyance does not affect the title to the manufactured home and that the transfer or encumbrance thereof can only be made pursuant to the provisions of the Illinois Vehicle Code. Any agreement by any party to the transaction whereby the requirements of this Section are waived shall be void as contrary to public policy.

Section 50. Applicability. Nothing in this Act shall impair any rights existing under the law prior to the effective date of this Act of any one claiming an interest in a manufactured home.

Section 55. Affidavit of severance.

(a) If and when a manufactured home for which an affidavit of affixation has been recorded is detached or severed from the real property to which it is affixed, the person or persons having an interest in the real property shall record an affidavit of severance in the land records of the county where the affidavit of affixation for the manufactured home is recorded. The affidavit of severance shall contain or be accompanied by:

(1) the name, residence, and mailing address of the owner of the manufactured home;

(2) a description of the manufactured home including the name of the manufacturer, the make, the model name, the model year, the dimensions, the vehicle identification number or numbers of the manufactured home, and whether it is new or used;

(3) the book number, page number, and date of recordation of the affidavit of affixation;

(4) a statement of either (A) any facts or information known to the party executing the affidavit that could reasonably affect the validity of the title of the manufactured home or the existence or non-existence of a security interest in or lien on it, or (B) that no such facts or information are known to such party;

(5) a sworn declaration by an attorney at law duly admitted to practice in the courts of the State of Illinois, or an agent of a title insurance company duly licensed to issue policies of title insurance in the State of Illinois, that the manufactured home is free and clear of all security interests, liens, and encumbrances; and (i) any facts or information known to him or her that could reasonably affect the validity of the title of the manufactured home or the existence or non-existence of a security interest in or lien on it, or (ii) that no such facts or information are known to him or her; and

(6) the name and address of the person designated for filing the certified copy of the affidavit of severance with the Secretary of State, to whom the recording officer shall return the certified copy of the affidavit of severance after it has been duly recorded in the real property records, as provided in subsection (d) of this Section.

(b) The affidavit of severance shall be in the form set forth in subsection (c) of this Section, duly acknowledged or proved in like manner as to entitle a conveyance to be recorded, and when so acknowledged or proved and upon payment of the lawful fees therefor, such recording officer shall immediately cause the affidavit and any attachments thereto to be duly recorded and indexed in the record of deeds.

(c) An affidavit of severance shall be in the form set forth below:

Recording Fee. The fee for recording an affidavit of severance shall be $ _________.

(d) Upon payment of the fees provided by law and recordation of the affidavit of severance, the recording officer shall endorse the affidavit as "recorded in land records," setting forth thereon the indexing information for the affidavit of severance, and the recording officer shall forthwith forward a certified copy of the affidavit of severance to the person designated therein for filing with the Secretary of State. Upon receipt of a certified copy of the affidavit of severance by the person designated therein for filing with the Secretary of State, that person shall deliver for filing to the Secretary of State the certified copy of the affidavit of severance and the other documents provided in subsection (a) of this Section.

Section 60. Documents in trust.

(a) Manufacturer's statement of origin. The holder of a Manufacturer's Statement of Origin to a manufactured home may deliver it to any person to facilitate conveying or encumbering the home. Any person receiving the Manufacturer's Statement of Origin, so delivered, holds it in trust for the person delivering it.

(b) Lien release. The holder of a security interest in a manufactured home may deliver lien release documents to any person to facilitate conveying or encumbering the home. Any person receiving the lien release documents, so delivered, holds the documents in trust for the lienholder.

Section 65. The Mobile Home Local Services Tax Act is amended by changing Section 1 as follows:

(35 ILCS 515/1) (from Ch. 120, par. 1201)

Sec. 1. As used in this Act, "mobile home" means a factory assembled structure designed for permanent habitation and so constructed as to permit its transport on wheels, temporarily or permanently attached to its frame, from the place of its construction to the location, or subsequent locations, and placement on a temporary foundation, at which it is intended to be a permanent habitation, and situated so as to permit the occupancy thereof as a dwelling place for one or more persons, and includes a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code, provided that any such structure resting in whole on a permanent foundation, with wheels, tongue and hitch removed at the time of registration provided for in Section 4 of this Act, shall not be construed as a "mobile home", but shall be assessed and taxed as real property as defined by Section 1-130 of the Property Tax Code. A manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is real property as defined in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act, shall not be construed as a "mobile home", but shall be assessed and taxed as real property as defined by Section 1-130 of the Property Tax Code. Mobile homes owned by a corporation or partnership and on which personal property taxes are paid as required under the Revenue Act of 1939 shall not be subject to this tax. Mobile homes located on a dealer's lot for resale purposes or as an office shall not be subject to this tax.

(Source: P.A. 88-670, eff. 12-2-94.)

Section 70. The Illinois Banking Act is amended by changing Sections 3, 5a, 5d, and 6.1 as follows:

(205 ILCS 5/3) (from Ch. 17, par. 309)

Sec. 3. Formation and primary powers. It shall be lawful to form banks, as herein provided, for the purpose of discount and deposit, buying and selling exchange and doing a general banking business, excepting the issuing of bills to circulate as money; and such banks shall have the power to loan money on personal and real estate security, and to accept and execute trusts upon obtaining a certificate of authority pursuant to the "Corporate Fiduciary Act", and shall be subject to all of the provisions of this Act. For purposes of this Section, "real estate" includes a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is real property as defined in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act.

(Source: P.A. 85-1402.)

(205 ILCS 5/5a) (from Ch. 17, par. 312)

Sec. 5a. Reverse mortgage loans. Notwithstanding any other provision of this Act, a bank may engage in making "reverse mortgage" loans.

For purposes of this Section, a "reverse mortgage" loan shall be a loan extended on the basis of existing equity in homestead property. A bank, in making a "reverse mortgage" loan, may add deferred interest to principal or otherwise provide for the charging of interest or premium on the deferred interest.

The loans shall be repaid upon sale of the property or upon the death of the owner or, if the property is in joint tenancy, upon the death of the last surviving joint tenant who had an interest in the property at the time the loan was initiated.

"Homestead" property, for purposes of this Section, means the domicile and contiguous real estate owned and occupied by the mortgagor, and includes a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is used as the domicile and is real property as defined in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act.

The Commissioner of Banks and Real Estate shall prescribe rules governing this Section and Section 1-6a of the Illinois Savings and Loan Act of 1985.

(Source: P.A. 88-643, eff. 1-1-95; 89-508, eff. 7-3-96.)

(205 ILCS 5/5d) (from Ch. 17, par. 312.3)

Sec. 5d. Notwithstanding any other provision of this Act, a bank may engage in making revolving credit loans secured by mortgages or deeds of trust on real property or by security assignments of beneficial interests in land trusts.

For purposes of this Section, "revolving credit", has the meaning defined in Section 4.1 of "An Act in relation to the rate of interest and other charges in connection with sales on credit and the lending of money", approved May 24, 1879, as amended.

Any mortgage or deed of trust given to secure a revolving credit loan may, and when so expressed therein shall, secure not only the existing indebtedness, but also such future advances, whether such advances are obligatory or to be made at the option of the lender, or otherwise, as are made within twenty years from the date thereof, to the same extent as if such future advances were made on the date of the execution of such mortgage or deed of trust, although there may be no advance made at the time of execution of such mortgage or other instrument, and although there may be no indebtedness outstanding at the time any advance is made. The lien of such mortgage or deed of trust, as to third persons without actual notice thereof, shall be valid as to all such indebtedness and future advances from the time said mortgage or deed of trust is filed for record in the office of the Recorder of Deeds or the Registrar of Titles of the county where the real property described therein is located. The total amount of indebtedness that may be so secured may increase or decrease from time to time, but the total unpaid balance so secured at any one time shall not exceed a maximum principal amount which must be specified in such mortgage or deed of trust, plus interest thereon, and any disbursements made for the payment of taxes, special assessments, or insurance on said real property, with interest on such disbursements.

Any such mortgage or deed of trust shall be valid and have priority over all subsequent liens and encumbrances, including statutory liens, except taxes and assessments levied on said real property.

For purposes of this Section, "real property" includes a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is real property as defined in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act.

(Source: P.A. 83-1539; 83-1380.)

(205 ILCS 5/6.1) (from Ch. 17, par. 313.1)

Sec. 6.1. Non-recourse reverse mortgage loans.

(a) It is the intent of this amendatory Act of 1991 that homeowners at least 62 years of age be permitted to meet their financial needs by accessing the equity in their homes through a reverse mortgage. The General Assembly recognizes that many restrictions and requirements that exist to govern traditional mortgage transactions are inapplicable in the context of reverse mortgages. In order to foster reverse mortgage transactions and better serve the citizens of this State, this Section authorizes the making of reverse mortgages, and expressly relieves reverse mortgage lenders and borrowers from compliance with inappropriate requirements.

As used in this Section, "borrower" means any homeowner who is, or whose spouse is, at least 62 years of age.

As used in this Section, "real property" includes a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is real property as defined in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act.

As used in this Section, "reverse mortgage" means a non-recourse loan, secured by real property, that complies with all of the following:

(1) Provides cash advances to a borrower based on the equity in a borrower's owner-occupied principal residence, provided that it is a residence designed to be occupied by not more than 4 families.

(2) Requires no payment of principal or interest until the entire loan becomes due and payable.

(b) Reverse mortgage loans shall be subject only to all of the following provisions:

(1) Payment, in whole or in part, shall be permitted without penalty at any time during the term of the mortgage.

(2) A reverse mortgage may provide for an interest rate that is fixed or adjustable and may provide for interest that is contingent on appreciation in the value of the property.

(3) If a reverse mortgage provides for periodic advances to a borrower, the advances may not be reduced in amount or number based on any adjustment in the interest rate.

(4) A reverse mortgage may be subject to any additional terms and conditions imposed by a lender that are required under the provisions of the federal Housing and Community Development Act of 1987 to enable the lender to obtain federal government insurance on the mortgage if the loans are to be insured under that Act.

(c) The repayment obligation under a reverse mortgage is subject to all of the following:

(1) Temporary absences from the home not exceeding 60 consecutive days shall not cause the mortgage to become due and payable.

(2) Temporary absences from the home exceeding 60 days, but not exceeding one year shall not cause the mortgage to become due and payable, provided that the borrower has taken action that secures the home in a manner satisfactory to the lender.

(3) The lender must disclose any interest or other fees to be charged during the period that commences on the date the mortgage becomes due and payable and ends when repayment in full is made in accordance with applicable State and federal laws, rules, and regulations.

(d) A reverse mortgage shall become due and payable upon the occurrence of any of the following events:

(1) The real property securing the loan is sold.

(2) All borrowers cease to occupy the home as a principal residence.

(3) A fixed maturity date agreed to by the lender and the borrower is reached.

(4) An event that is specified in the loan documents and that jeopardizes the lender's security occurs.

(e) No reverse mortgage commitment may be made by a lender unless the loan applicant attests, in writing, that the applicant has received from the lender, at the time of initial inquiry, a statement prepared by the Department on Aging regarding the advisability and availability of independent information and counseling services on reverse mortgages.

(Source: P.A. 87-488.)

Section 75. The Illinois Savings and Loan Act of 1985 is amended by changing Sections 1-10.30 and 5-2 as follows:

(205 ILCS 105/1-10.30) (from Ch. 17, par. 3301-10.30)

Sec. 1-10.30. "Real property": the interests, benefits, and rights inherent in the ownership of the physical real estate. It is the rights with which the ownership of real estate is endowed. Real property includes a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is real property as defined in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act. For purposes of this Act, the term "Real Estate" is synonymous with "Real Property".

(Source: P.A. 84-543.)

(205 ILCS 105/5-2) (from Ch. 17, par. 3305-2)

Sec. 5-2. Investment in loans. An association may loan funds to members as follows:

(a) On the security of withdrawable capital accounts, but no such loan shall exceed the withdrawal value of the pledged account;

(b) On the security of real estate:

(1) Of a value, determined in accordance with Section 5-12 of this Act, sufficient to provide good and ample security for the loan;

(2) With a fee simple title or a leasehold title of not less duration than 10 years beyond the maturity of the loan;

(3) With the title established by such evidence of title as is consistent with sound lending practices in the locality;

(4) With the security interest in such real estate evidenced by an appropriate written instrument and the loan evidenced by a note, bond or similar written instrument. A loan on the security of the whole of the beneficial interest in a land trust satisfies the requirements of this paragraph if the title to the land is held by a corporate trustee and if the real estate held in the land trust meets the other requirements of this subsection; and

(5) With a mortgage loan not to exceed 40 years;

(c) For the purpose of repair, improvement, rehabilitation, furnishing or equipment of real estate or any other purpose;

(d) For the purpose of financing or refinancing an existing ownership interest in certificates of stock, certificates of beneficial interest or other evidence of an ownership interest in, and a proprietary lease from, a corporation, trust or partnership formed for the purpose of the cooperative ownership of real estate, secured by the assignment or transfer of such certificates or other evidence of ownership of the borrower;

(e) Through the purchase of loans which at the time of purchase the association could make in accordance with this Section and the by-laws;

(f) Through the purchase of installment contracts for the sale of real estate, and title thereto which is subject to such contracts, but in each instance only if the association at the time of purchase could make a mortgage loan of the same amount and for the same length of time on the security of such real estate;

(g) Through loans guaranteed or insured, wholly or in part by the United States or any of its instrumentalities, and without regard to the limits in amount and terms otherwise imposed by this Article;

(h) Through secured or unsecured loans for business, corporate, personal, family, or household purposes, or for secured or unsecured loans for agricultural or commercial purposes to the same extent that such agricultural or commercial loans are authorized by federal law for any savings and loan association organized under federal law and authorized to do business in this State, except that loans to service corporations shall not be subject to the limitations of this paragraph;

(i) For the purpose of financing a manufactured home mobile home financing subject, however, to the regulation of the Commissioner. As used in this Section, "manufactured home" means a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code;

(j) Through loans to its members secured by the cash surrender value of any life insurance policy or any collateral which would be a legal investment if made by such association pursuant to the terms of this Act; and

(k) Any provision of this Act to the contrary notwithstanding, any association may make any loan to its members or investment which such association could make if it were incorporated and operating as an association organized under the laws of the United States.

(Source: P.A. 86-137.)

Section 80. The Savings Bank Act is amended by changing Sections 6002 and 6008 as follows:

(205 ILCS 205/6002) (from Ch. 17, par. 7306-2)

Sec. 6002. Investment in loans.

(a) Subject to the regulations of the Commissioner, a savings bank may loan funds as follows:

(1) On the security of deposit accounts, but no such loan shall exceed the withdrawal value of the pledged account.

(2) On the security of real estate:

(A) of a value, determined in accordance with this Act, sufficient to provide good and ample security for the loan;

(B) with a fee simple title or a leasehold title;

(C) with the title established by evidence of title as is consistent with sound lending practices in the locality;

(D) with the security interest in the real estate evidenced by an appropriate written instrument and the loan evidenced by a note, bond, or similar written instrument; a loan on the security of the whole of the beneficial interest in a land trust satisfies the requirements of this paragraph if the title to the land is held by a corporate trustee and if the real estate held in the land trust meets the other requirements of this subsection;

(E) with a mortgage loan not to exceed 40 years.

(3) For the purpose of repair, improvement, rehabilitation, furnishing, or equipment of real estate.

(4) For the purpose of financing or refinancing an existing ownership interest in certificates of stock, certificates of beneficial interest, other evidence of an ownership interest in, or a proprietary lease from a corporation, trust, or partnership formed for the purpose of the cooperative ownership of real estate, secured by the assignment or transfer of certificates or other evidence of ownership of the borrower.

(5) Through the purchase of loans that, at the time of purchase, the savings bank could make in accordance with this Section and the bylaws.

(6) Through the purchase of installment contracts for the sale of real estate and title thereto that is subject to the contracts, but in each instance only if the savings bank, at the time of purchase, could make a mortgage loan of the same amount and for the same length of time on the security of the real estate.

(7) Through loans guaranteed or insured, wholly or in part, by the United States or any of its instrumentalities.

(8) Subject to regulations adopted by the Commissioner, through secured or unsecured loans for business, corporate, commercial, or agricultural purposes; provided that the total of all loans granted under this paragraph shall not exceed 15% of the savings bank's total assets unless a greater amount is authorized in writing by the Commissioner.

(9) For the purpose of financing a manufactured home mobile home financing subject, however, to the regulation of the Commissioner. As used in this Section, "manufactured home" means a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code.

(10) Through loans secured by the cash surrender value of any life insurance policy or any collateral that would be a legal investment under the terms of this Act if made by the savings bank.

(11) Any provision of this Act or any other law, except for paragraph (18) of Section 6003, to the contrary notwithstanding, but subject to the Financial Institutions Insurance Sales Law and subject to the Commissioner's regulations, any savings bank may make any loan or investment or engage in any activity that it could make or engage in if it were organized under State law as a savings and loan association or under federal law as a federal savings and loan association or federal savings bank.

(12) A savings bank may issue letters of credit or other similar arrangements only as provided for by regulation of the Commissioner with regard to aggregate amounts permitted, take out commitments for stand-by letters of credit, underlying documentation and underwriting, legal limitations on loans of the savings bank, control and subsidiary records, and other procedures deemed necessary by the Commissioner.

(13) For the purpose of automobile financing, subject to the regulation of the Commissioner.

(14) For the purpose of financing primary, secondary, undergraduate, or postgraduate education.

(15) Through revolving lines of credit on the security of a first or junior lien on the borrower's personal residence, based primarily on the borrower's equity, the proceeds of which may be used for any purpose; those loans being commonly referred to as home equity loans.

(16) As secured or unsecured credit to cover the payment of checks, drafts, or other funds transfer orders in excess of the available balance of an account on which they are drawn, subject to the regulations of the Commissioner.

(b) For purposes of this Section, "real estate" includes a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is real property as defined in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act.

(Source: P.A. 90-301, eff. 8-1-97; 91-97, eff. 7-9-99.)

(205 ILCS 205/6008) (from Ch. 17, par. 7306-8)

Sec. 6008. Purchase of real estate at forced sale. A savings bank may purchase at any sheriff's or other judicial sale, either public or private, any real estate upon which the savings bank has any mortgage, lien or other encumbrance, or in which the savings bank has any other interest. The savings bank thereafter may repair, insure, improve, sell, convey, lease, preserve, mortgage, exchange, or otherwise dispose of real estate so acquired in the best interests of the savings bank. For purposes of this Section, "real estate" includes a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is real property as defined in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act.

(Source: P.A. 86-1213.)

Section 85. The Illinois Credit Union Act is amended by changing Sections 46 and 46.1 as follows:

(205 ILCS 305/46) (from Ch. 17, par. 4447)

Sec. 46. Loans and interest rate.

(1) A credit union may make loans to its members for such purpose and upon such security and terms, including rates of interest, as the Credit Committee, credit manager, or loan officer approves. Notwithstanding the provisions of any other law in connection with extensions of credit, a credit union may elect to contract for and receive interest and fees and other charges for extensions of credit subject only to the provisions of this Act and rules promulgated under this Act, except that extensions of credit secured by residential real estate shall be subject to the laws applicable thereto. The rates of interest to be charged on loans to members shall be set by the Board of Directors of each individual credit union in accordance with Section 30 of this Act and such rates may be less than, but may not exceed, the maximum rate set forth in this Section. A borrower may repay his loan prior to maturity, in whole or in part, without penalty. The credit contract may provide for the payment by the member and receipt by the credit union of all costs and disbursements, including reasonable attorney's fees and collection agency charges, incurred by the credit union to collect or enforce the debt in the event of a delinquency by the member, or in the event of a breach of any obligation of the member under the credit contract. A contingency or hourly arrangement established under an agreement entered into by a credit union with an attorney or collection agency to collect a loan of a member in default shall be presumed prima facie reasonable.

(2) Credit unions may make loans based upon the security of any interest or equity in real estate, subject to rules and regulations promulgated by the Director. In any contract or loan which is secured by a mortgage, deed of trust, or conveyance in the nature of a mortgage, on residential real estate, the interest which is computed, calculated, charged, or collected pursuant to such contract or loan, or pursuant to any regulation or rule promulgated pursuant to this Act, may not be computed, calculated, charged or collected for any period of time occurring after the date on which the total indebtedness, with the exception of late payment penalties, is paid in full.

For purposes of this subsection (2) of this Section 46, a prepayment shall mean the payment of the total indebtedness, with the exception of late payment penalties if incurred or charged, on any date before the date specified in the contract or loan agreement on which the total indebtedness shall be paid in full, or before the date on which all payments, if timely made, shall have been made. In the event of a prepayment of the indebtedness which is made on a date after the date on which interest on the indebtedness was last computed, calculated, charged, or collected but before the next date on which interest on the indebtedness was to be calculated, computed, charged, or collected, the lender may calculate, charge and collect interest on the indebtedness for the period which elapsed between the date on which the prepayment is made and the date on which interest on the indebtedness was last computed, calculated, charged or collected at a rate equal to 1/360 of the annual rate for each day which so elapsed, which rate shall be applied to the indebtedness outstanding as of the date of prepayment. The lender shall refund to the borrower any interest charged or collected which exceeds that which the lender may charge or collect pursuant to the preceding sentence. The provisions of this amendatory Act of 1985 shall apply only to contracts or loans entered into on or after the effective date of this amendatory Act.

(3) Notwithstanding any other provision of this Act, a credit union authorized under this Act to make loans secured by an interest or equity in real estate may engage in making "reverse mortgage" loans to persons for the purpose of making home improvements or repairs, paying insurance premiums or paying real estate taxes on the homestead properties of such persons. If made, such loans shall be made on such terms and conditions as the credit union shall determine and as shall be consistent with the provisions of this Section and such rules and regulations as the Director shall promulgate hereunder. For purposes of this Section, a "reverse mortgage" loan shall be a loan extended on the basis of existing equity in homestead property and secured by a mortgage on such property. Such loans shall be repaid upon the sale of the property or upon the death of the owner or, if the property is in joint tenancy, upon the death of the last surviving joint tenant who had such an interest in the property at the time the loan was initiated, provided, however, that the credit union and its member may by mutual agreement, establish other repayment terms. A credit union, in making a "reverse mortgage" loan, may add deferred interest to principal or otherwise provide for the charging of interest or premiums on such deferred interest. "Homestead" property, for purposes of this Section, means the domicile and contiguous real estate owned and occupied by the mortgagor. The Director shall promulgate rules and regulations under this Section; provided that such rules and regulations need not be promulgated jointly with any other administrative agency of this State.

(4) Notwithstanding any other provisions of this Act, a credit union authorized under this Act to make loans secured by an interest or equity in real property may engage in making revolving credit loans secured by mortgages or deeds of trust on such real property or by security assignments of beneficial interests in land trusts.

For purposes of this Section, "revolving credit" has the meaning defined in Section 4.1 of the Interest Act.

Any mortgage or deed of trust given to secure a revolving credit loan may, and when so expressed therein shall, secure not only the existing indebtedness but also such future advances, whether such advances are obligatory or to be made at the option of the lender, or otherwise, as are made within twenty years from the date thereof, to the same extent as if such future advances were made on the date of the execution of such mortgage or deed of trust, although there may be no advance made at the time of execution of such mortgage or other instrument, and although there may be no indebtedness outstanding at the time any advance is made. The lien of such mortgage or deed of trust, as to third persons without actual notice thereof, shall be valid as to all such indebtedness and future advances form the time said mortgage or deed of trust is filed for record in the office of the Recorder of Deeds or the Registrar of Titles of the county where the real property described therein is located. The total amount of indebtedness that may be so secured may increase or decrease from time to time, but the total unpaid balance so secured at any one time shall not exceed a maximum principal amount which must be specified in such mortgage or deed of trust, plus interest thereon, and any disbursements made for the payment of taxes, special assessments, or insurance on said real property, with interest on such disbursements.

Any such mortgage or deed of trust shall be valid and have priority over all subsequent liens and encumbrances, including statutory liens, except taxes and assessments levied on said real property.

(4.1) For purposes of this Section, "real estate" and "real property" include a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is real property as defined in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act.

(5) Compliance with federal or Illinois preemptive laws or regulations governing loans made by a credit union chartered under this Act shall constitute compliance with this Act.

(Source: P.A. 95-98, eff. 8-13-07.)

(205 ILCS 305/46.1) (from Ch. 17, par. 4447.1)

Sec. 46.1. Non-recourse reverse mortgage loans. Any credit union authorized under this Act to make loans secured by an interest or equity in real estate may make non-recourse reverse mortgage loans as provided in Section 6.1 of the Illinois Banking Act.

For purposes of this Section, "real estate" includes a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is real property as defined in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act.

(Source: P.A. 87-488.)

Section 90. The Residential Mortgage License Act of 1987 is amended by changing Section 1-4 as follows:

(205 ILCS 635/1-4) (from Ch. 17, par. 2321-4)

Sec. 1-4. Definitions.

(a) "Residential real property" or "residential real estate" shall mean real property located in this State improved by a one-to-four family dwelling used or occupied, wholly or partly, as the home or residence of one or more persons and may refer, subject to regulations of the Commissioner, to unimproved real property upon which those kinds of dwellings are to be constructed. The term includes a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is real property as defined in Section 40 of the Conveyance and Encumbrance of Manufactured Homes 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 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 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) any pension trust, bank trust, or bank trust company; (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; (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.

(2) Any person or entity that does not originate mortgage loans in the ordinary course of business making or acquiring residential mortgage loans with his or her or its own funds for his or her or its own investment without intent to make, acquire, or resell more than 10 residential mortgage loans in any one calendar year.

(3) Any person employed by a licensee to assist in the performance of the activities regulated by this Act who is compensated in any manner by only one licensee.

(4) Any person licensed pursuant to the Real Estate License Act of 2000, who engages only in the taking of applications and credit and appraisal information to forward to a licensee or an exempt entity under this Act and who is compensated by either a licensee or an exempt entity under this Act, but is not compensated by either the buyer (applicant) or the seller.

(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 compensation for those activities, subject to the Commissioner's regulations with regard to the nature and amount of compensation.

(6) A person who prepares supporting documentation for a residential mortgage loan application taken by a licensee and performs ministerial functions pursuant to specific instructions of the licensee who neither requires nor permits the preparer to exercise his or her discretion or judgment; provided that this activity is engaged in pursuant to a binding, written agreement between the licensee and the preparer that:

(A) holds the licensee fully accountable for the preparer's action; and

(B) otherwise meets the requirements of this Section and this Act, does not undermine the purposes of this Act, and is approved by the Commissioner.

(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 a loan to or for the benefit of any natural person made primarily for personal, family, or household use, primarily secured by either a mortgage on residential real property or certificates of stock or other evidence of ownership interests in and proprietary leases from, corporations, partnerships, or limited liability companies formed for the purpose of cooperative ownership of residential real property, all located in Illinois.

(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 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 or a person authorized by the Commissioner, the Office of Banks and Real Estate Act, or this Act to act in the Commissioner's stead.

(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 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) and (o) 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.

(r) "Full service office" shall mean office 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 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.

(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) "Residential Mortgage Board" shall mean the Residential Mortgage Board created in Section 1-5 of this Act.

(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.

The Commissioner may define by rule and regulation any terms used in this Act for the efficient and clear administration of this Act.

(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) "Loan originator" means any natural person who, for compensation or in the expectation of compensation, either directly or indirectly makes, offers to make, solicits, places, or negotiates a residential mortgage loan.

(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.

(Source: P.A. 93-561, eff. 1-1-04; 93-1018, eff. 1-1-05.)

Section 95. The Abandoned Mobile Home Act is amended by changing Section 10 as follows:

(210 ILCS 117/10)

Sec. 10. Definitions.

"Mobile home" means a structure designed for permanent habitation and constructed to permit its transport on wheels, temporarily or permanently attached to its frame, from its place of construction to a location where it is intended to be a permanent habitation and includes a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code. "Mobile home" does not include a structure that is served by individual utilities and that rests on a permanent foundation with its wheels, tongue, and hitch permanently removed, nor a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is real property as defined in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act.

"Abandoned mobile home" means a mobile home that has no owner currently residing in the mobile home or authorized tenant of the owner currently residing in the mobile home to the best knowledge of the municipality; has had its electricity, natural gas, sewer, and water payments declared delinquent by the utility companies that are providing such services; and for which the Mobile Home Privilege Tax, imposed under the Mobile Home Local Services Tax Act, is delinquent for at least 3 months.

"Municipality" means any city, village, incorporated town, or its duly authorized agent. If an abandoned mobile home is located in an unincorporated area, the county where the mobile home is located shall have all powers granted to a municipality under this Act.

(Source: P.A. 88-516.)

Section 100. The Illinois Vehicle Code is amended by changing Sections 3-100, 3-102, 3-103, 3-104, 3-106, 3-107, 3-110, 3-116, 3-202, 3-205, 3-207, and 3-208 and by adding Sections 1-145.002, 3-116.1, 3-116.2, 3-116.3, and 3-116.4 as follows:

(625 ILCS 5/1-145.002 new)

Sec. 1-145.002. Mobile home or manufactured home.

A "mobile home" or "manufactured home" means a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code.

(625 ILCS 5/3-100) (from Ch. 95 1/2, par. 3-100)

Sec. 3-100. Definitions. For the purposes of this Chapter, the following words shall have the meanings ascribed to them:

"Electronic" includes electrical, digital, magnetic, optical, electromagnetic, or any other form of technology that entails capabilities similar to these technologies.

"Electronic record" means a record generated, communicated, received, or stored by electronic means for use in an information system or for transmission from one information system to another.

"Electronic signature" means a signature in electronic form attached to or logically associated with an electronic record.

"Vehicle" means a vehicle as defined in the Illinois Vehicle Code. Unless otherwise specified, "vehicle" also means a manufactured home as defined in Section 1-145.002 of the Illinois Vehicle Code.

"Owner" means a person who holds legal document of ownership of a vehicle, limited to a certificate of origin, certificate of title, salvage certificate, or junking certificate. However, in the event a vehicle is the subject of an agreement for the conditional sale or lease thereof with the right of purchase upon performance of the conditions stated in the agreement and with an immediate right of possession vested in the conditional vendee or lessee, or in the event a mortgagor of such vehicle is entitled to possession, then such conditional vendee or lessee or mortgagor shall be deemed the owner for the purpose of this Chapter, except as provided under paragraph (c) of Section 3-118.

"Record" means information that is inscribed, stored, or otherwise fixed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

"Signature" or "signed" includes any symbol executed or adopted, or any security procedure employed or adopted, using electronic means or otherwise, by or on behalf of a person with intent to authenticate a record.

(Source: P.A. 91-79, eff. 1-1-00; 91-357, eff. 7-29-99; 91-772, eff. 1-1-01.)

(625 ILCS 5/3-102) (from Ch. 95 1/2, par. 3-102)

Sec. 3-102. Exclusions.

No certificate of title need be obtained for:

1. A vehicle owned by the State of Illinois; or a vehicle owned by the United States unless it is registered in this State;

2. A vehicle owned by a manufacturer or dealer and held for sale, even though incidentally moved on the highway or used for purposes of testing or demonstration, provided a dealer reassignment area is still available on the manufacturer's certificate of origin or the Illinois title; or a vehicle used by a manufacturer solely for testing;

3. A vehicle owned by a non-resident of this State and not required by law to be registered in this State;

4. A motor vehicle regularly engaged in the interstate transportation of persons or property for which a currently effective certificate of title has been issued in another State;

5. A vehicle moved solely by animal power;

6. An implement of husbandry;

7. Special mobile equipment;

8. An apportionable trailer or an apportionable semitrailer registered in the State prior to April 1, 1998; .

9. A manufactured home for which an affidavit of affixation has been recorded pursuant to Section 15 of the Conveyance and Encumbrance of Manufactured Homes Act, unless an affidavit of severance has been recorded for the same manufactured home pursuant to Section 55 of the Conveyance and Encumbrance of Manufactured Homes Act.

(Source: P.A. 91-441, eff. 1-1-00.)

(625 ILCS 5/3-103) (from Ch. 95 1/2, par. 3-103)

Sec. 3-103. Optional certificate of title.

(a) The owner of an implement of husbandry or special mobile equipment may apply for and obtain a certificate of title on it. All of the provisions of this chapter, except part (e) of Section 3-104, are applicable to a certificate of title so issued, except that a person who receives a transfer of an interest in the vehicle without knowledge of the certificate of title is not prejudiced by reason of the existence of the certificate, and the perfection of a security interest under this act is not effective until the lienholder has complied with the provisions of applicable law which otherwise relate to the perfection of security interests in personal property.

An application for an optional certificate of title must be accompanied by either an exemption determination from the Department of Revenue showing that no tax imposed under the "Use Tax Act" or the "Retailers' Occupation Tax Act" is owed by anyone with respect to that vehicle or by a receipt from the Department of Revenue showing that any tax so imposed has been paid. No optional certificate of title shall be issued in the absence of such a receipt or exemption determination.

If the proof of payment or of nonliability is, after the issuance of the optional certificate of title, found to be invalid, the Secretary of State shall revoke the optional certificate of title and require that it be returned to him.

(b) The owner of a manufactured home that is permanently affixed to real estate and for which a certificate of title has not previously been issued and surrendered for cancellation, may apply for a certificate of title which shall be issued for the sole purpose of (i) surrendering such certificate of title for cancellation in accordance with Section 3-116.2 of this Code or (ii) satisfying the requirements of subsection (e)(4) of Section 9-334 of the Uniform Commercial Code. The Secretary of State shall issue a certificate of title, in accordance with this Chapter, upon satisfaction of the application requirements of this Code.

(Source: P.A. 78-1165.)

(625 ILCS 5/3-104) (from Ch. 95 1/2, par. 3-104)

Sec. 3-104. Application for certificate of title.

(a) The application for a certificate of title for a vehicle in this State must be made by the owner to the Secretary of State on the form prescribed and must contain:

1. The name, Illinois residence and mail address of the owner;

2. A description of the vehicle including, so far as the following data exists: Its make, year-model, identifying number, type of body, whether new or used, as to house trailers as defined in Section 1-128 of this Code, and as to manufactured homes as defined in Section 1-145.002 of this Code, the square footage of the house trailer based upon the outside dimensions of the house trailer excluding the length of the tongue and hitch, and, as to vehicles of the second division, whether for-hire, not-for-hire, or both for-hire and not-for-hire;

3. The date of purchase by applicant and, if applicable, the name and address of the person from whom the vehicle was acquired and the names and addresses of any lienholders in the order of their priority and signatures of owners;

4. The current odometer reading at the time of transfer and that the stated odometer reading is one of the following: actual mileage, not the actual mileage or mileage is in excess of its mechanical limits; and

5. Any further information the Secretary of State reasonably requires to identify the vehicle and to enable him to determine whether the owner is entitled to a certificate of title and the existence or nonexistence of security interests in the vehicle.

(a-5) The Secretary of State shall designate on the prescribed application form a space where the owner of a vehicle may designate a beneficiary, to whom ownership of the vehicle shall pass in the event of the owner's death.

(b) If the application refers to a vehicle purchased from a dealer, it must also be signed by the dealer as well as the owner, and the dealer must promptly mail or deliver the application and required documents to the Secretary of State.

(c) If the application refers to a vehicle last previously registered in another State or country, the application must contain or be accompanied by:

1. Any certified document of ownership so recognized and issued by the other State or country and acceptable to the Secretary of State, and

2. Any other information and documents the Secretary of State reasonably requires to establish the ownership of the vehicle and the existence or nonexistence of security interests in it.

(d) If the application refers to a new vehicle it must be accompanied by the Manufacturer's Statement of Origin, or other documents as required and acceptable by the Secretary of State, with such assignments as may be necessary to show title in the applicant.

(e) If an application refers to a vehicle rebuilt from a vehicle previously salvaged, that application shall comply with the provisions set forth in Sections 3-302 through 3-304 of this Code.

(f) An application for a certificate of title for any vehicle, whether purchased in Illinois or outside Illinois, and even if previously registered in another State, must be accompanied by either an exemption determination from the Department of Revenue showing that no tax imposed pursuant to the Use Tax Act or the vehicle use tax imposed by Section 3-1001 of the Illinois Vehicle Code is owed by anyone with respect to that vehicle, or a receipt from the Department of Revenue showing that any tax so imposed has been paid. An application for a certificate of title for any vehicle purchased outside Illinois, even if previously registered in another state, must be accompanied by either an exemption determination from the Department of Revenue showing that no tax imposed pursuant to the Municipal Use Tax Act or the County Use Tax Act is owed by anyone with respect to that vehicle, or a receipt from the Department of Revenue showing that any tax so imposed has been paid. In the absence of such a receipt for payment or determination of exemption from the Department, no certificate of title shall be issued to the applicant.

If the proof of payment of the tax or of nonliability therefor is, after the issuance of the certificate of title and display certificate of title, found to be invalid, the Secretary of State shall revoke the certificate and require that the certificate of title and, when applicable, the display certificate of title be returned to him.

(g) If the application refers to a vehicle not manufactured in accordance with federal safety and emission standards, the application must be accompanied by all documents required by federal governmental agencies to meet their standards before a vehicle is allowed to be issued title and registration.

(h) If the application refers to a vehicle sold at public sale by a sheriff, it must be accompanied by the required fee and a bill of sale issued and signed by a sheriff. The bill of sale must identify the new owner's name and address, the year model, make and vehicle identification number of the vehicle, court order document number authorizing such sale, if applicable, and the name and address of any lienholders in order of priority, if applicable.

(i) If the application refers to a vehicle for which a court of law determined the ownership, it must be accompanied with a certified copy of such court order and the required fee. The court order must indicate the new owner's name and address, the complete description of the vehicle, if known, the name and address of the lienholder, if any, and must be signed and dated by the judge issuing such order.

(j) If the application refers to a vehicle sold at public auction pursuant to the Labor and Storage Lien (Small Amount) Act, it must be accompanied by an affidavit or affirmation furnished by the Secretary of State along with the documents described in the affidavit or affirmation and the required fee.

(k) The holder of a Manufacturer's Statement of Origin to a manufactured home may deliver it to any person to facilitate conveying or encumbering the manufactured home. Any person receiving any such Manufacturer's Statement of Origin, so delivered, holds it in trust for the person delivering it.

(Source: P.A. 95-784, eff. 1-1-09.)

(625 ILCS 5/3-106) (from Ch. 95 1/2, par. 3-106)

Sec. 3-106. Certificate of title - Issuance - Records. (a) The Secretary of State shall file each application received and, when satisfied as to its genuineness and regularity, and that no tax imposed by the "Use Tax Act" or the vehicle use tax, as imposed by Section 3-1001 of "The Illinois Vehicle Code", or pursuant to the "Municipal Use Tax Act" or pursuant to the "County Use Tax Act" is owed as evidenced by the receipt for payment or determination of exemption from the Department of Revenue provided for in Section 3-104 of this Act, and that the applicant is entitled to the issuance of a certificate of title, shall issue a certificate of title of the vehicle.

(b) The Secretary of State shall maintain a record of all certificates of title issued by him under a distinctive title number assigned to the vehicle; and, in the discretion of the Secretary of State, in any other method determined.

(c) The Secretary of State shall not issue a certificate of title to a manufactured home for which there has been recorded an affidavit of affixation pursuant to Section 15 of the Conveyance and Encumbrance of Manufactured Homes Act unless, with respect to the same manufactured home, there has been recorded an affidavit of severance pursuant to Section 55 the Conveyance and Encumbrance of Manufactured Homes Act.

(d) When satisfied as to its genuineness and regularity, the Secretary of State shall file, upon receipt, each affidavit of affixation and affidavit of severance relating to a manufactured home that is delivered in accordance with the Conveyance and Encumbrance of Manufactured Homes Act.

(e) The Secretary of State shall maintain a record of each affidavit of affixation and each affidavit of severance filed in accordance with subsection (d) of this Section. The record shall state the name of the owner of the related manufactured home, the county of recordation, the date of recordation, and the book and page number of each record of deeds in which there has been recorded an affidavit of affixation or affidavit of severance pursuant to the Conveyance and Encumbrance of Manufactured Homes Act, and any other data the Secretary of State prescribes.

(f) When satisfied as to its genuineness and regularity, the Secretary of State shall file, upon receipt, each application for surrender of the Manufacturer's Statement of Origin relating to a manufactured home that is delivered in accordance with Section 3-116.1 of this Code.

(g) When satisfied as to its genuineness and regularity, the Secretary of State shall file, upon receipt, each application for surrender of the certificate of title relating to a manufactured home that is delivered in accordance with Section 3-116.2 of this Code.

(h) When satisfied as to its genuineness and regularity, the Secretary of State shall file, upon receipt, each application for confirmation of conversion relating to a manufactured home that is delivered in accordance with Section 3-116.3 of this Code.

(i) The Secretary of State shall maintain a record of each Manufacturer's Statement of Origin accepted for surrender as provided in Section 3-116.1 of this Code. The record shall state the name of each owner of the manufactured home, the date the Manufacturer's Statement of Origin was accepted for surrender, the county of recordation, the date of recordation, and the book and page number of each record of deeds in which there has been recorded an affidavit of affixation pursuant to the Conveyance and Encumbrance of Manufactured Homes Act, and any other data the Secretary of State prescribes.

(j) The Secretary of State shall maintain a record of each manufactured home certificate of title accepted for surrender as provided in Section 3-116.2 of this Code. The record shall state the name of each owner of the manufactured home, the date the certificate of title was accepted for surrender, the county of recordation, the date of recordation, and the book and page number of each record of deeds in which there has been recorded an affidavit of affixation pursuant to the Conveyance and Encumbrance of Manufactured Homes Act, and any other data the Secretary of State prescribes.

(k) The Secretary of State shall maintain a record of each application for confirmation of conversion accepted as provided in Section 3-116.3 of this Code. The record shall state the name of each owner of the manufactured home, the county of recordation, the date of recordation, and the book and page number of each record of deeds in which there has been recorded an affidavit of affixation pursuant to the Conveyance and Encumbrance of Manufactured Homes Act, and any other data the Secretary of State prescribes.

(Source: P.A. 86-444.)

(625 ILCS 5/3-107) (from Ch. 95 1/2, par. 3-107)

Sec. 3-107. Contents and effect.

(a) Each certificate of title issued by the Secretary of State shall contain:

1. the date issued;

2. the name and address of the owner;

3. the names and addresses of any lienholders, in the order of priority as shown on the application or, if the application is based on a certificate of title, as shown on the certificate;

4. the title number assigned to the vehicle;

5. a description of the vehicle including, so far as the following data exists: its make, year-model, identifying number, type of body, whether new or used, as to house trailers as defined in Section 1-128 of this Code, and as to manufactured homes as defined in Section 1-145.002 of this Code, the square footage of the vehicle based upon the outside dimensions of the house trailer excluding the length of the tongue and hitch, and, if a new vehicle, the date of the first sale of the vehicle for use;

6. an odometer certification as provided for in this Code; and

7. any other data the Secretary of State prescribes.

(b) The certificate of title shall contain forms for assignment and warranty of title by the owner, and for assignment and warranty of title by a dealer, and may contain forms for applications for a certificate of title by a transferee, the naming of a lienholder and the assignment or release of the security interest of a lienholder.

(b-5) The Secretary of State shall designate on a certificate of title a space where the owner of a vehicle may designate a beneficiary, to whom ownership of the vehicle shall pass in the event of the owner's death.

(c) A certificate of title issued by the Secretary of State is prima facie evidence of the facts appearing on it.

(d) A certificate of title for a vehicle is not subject to garnishment, attachment, execution or other judicial process, but this subsection does not prevent a lawful levy upon the vehicle.

(e) Any certificate of title issued by the Secretary of State is subject to a lien in favor of the State of Illinois for any fees or taxes required to be paid under this Act and as have not been paid, as provided for in this Code.

(f) Notwithstanding any other provision of law, a certificate of title issued by the Secretary of State to a manufactured home is prima facie evidence of the facts appearing on it, regardless that the manufactured home became affixed, at any time and in any manner, to real property.

(Source: P.A. 95-784, eff. 1-1-09.)

(625 ILCS 5/3-110) (from Ch. 95 1/2, par. 3-110)

Sec. 3-110. Refusing certificate of title.

The Secretary of State shall refuse issuance of a certificate of title if any required fee is not paid or if he has reasonable grounds to believe that:

(a) The applicant is not the owner of the vehicle;

(b) The application contains a false or fraudulent statement; or

(c) The applicant fails to furnish required information or documents or any additional information the Secretary of State reasonably requires;

(d) The applicant has not paid to the Secretary of State any fees or taxes due under this Act and have not been paid upon reasonable notice and demand.

(e) Except as provided in Section 3-116.2 of this Code, the Secretary of State shall not refuse to issue a certificate of title to a manufactured home because it, at any time and in any manner, became affixed to real property.

(Source: P.A. 77-641.)

(625 ILCS 5/3-116) (from Ch. 95 1/2, par. 3-116)

Sec. 3-116. When Secretary of State to issue a certificate of title.

(a) The Secretary of State, upon receipt of a properly assigned certificate of title, with an application for a certificate of title, the required fee and any other documents required by law, shall issue a new certificate of title in the name of the transferee as owner and mail it to the first lienholder named in it or, if none, to the owner or owner's designee.

(b) The Secretary of State, upon receipt of an application for a new certificate of title by a transferee other than by voluntary transfer, with proof of the transfer, the required fee and any other documents required by law, shall issue a new certificate of title in the name of the transferee as owner.

(c) Any person, firm or corporation, who shall knowingly possess, buy, sell, exchange or give away, or offer to buy, sell, exchange or give away the certificate of title to any motor vehicle which is a junk or salvage, or who shall fail to surrender the certificate of title to the Secretary of State as required under the provisions of this Section and Section 3-117.2, shall be guilty of Class 3 felony.

(d) The Secretary of State shall file and retain for four (4) years a record of every surrendered certificate of title or proof of ownership accepted by the Secretary of State, the file to be maintained so as to permit the tracing of title of the vehicle designated therein. This subsection (d) does not apply to manufactured homes.

(e) The Secretary of State, upon receipt of an application for corrected certificate of title, with the original title, the required fee and any other required documents, shall issue a corrected certificate of title in the name of the owner and mail it to the first lienholder named in it or, if none, to the owner or owner's designee.

(f) The Secretary of State, upon receipt of a certified copy of a court order awarding ownership to an applicant along with an application for a certificate of title and the required fee, shall issue a certificate of title to the applicant.

(Source: P.A. 90-212, eff. 1-1-98.)

(625 ILCS 5/3-116.1 new)

Sec. 3-116.1. Surrender of Manufacturer's Statement of Origin to a manufactured home.

(a) The owner or owners of a manufactured home that is covered by a Manufacturer's Statement of Origin, and that is permanently affixed to real property or which the owner intends to permanently affix to real property as defined in Section 10 of the Conveyance and Encumbrance of Manufactured Homes Act, may surrender the Manufacturer's Statement of Origin to the Secretary of State by filing with the Secretary of State an application for surrender of the Manufacturer's Statement of Origin, containing or accompanied by:

(1) the name, residence, and mailing address of the owner;

(2) a description of the manufactured home including the name of the manufacturer, the make, the model name, the model year, the dimensions, the vehicle identification number of the manufactured home, whether it is new or used, and any other information the Secretary of State requires;

(3) the date of purchase by the owner of the manufactured home, the name and address of the person from whom the home was acquired, and the names and addresses of any security interest holders and lienholders in the order of their apparent priority;

(4) a statement signed by the owner, stating either (i) any facts or information known to the owner that could reasonably affect the validity of the title to the manufactured home or the existence or non-existence of a security interest in or lien on it; or (ii) that no such facts or information are known to the owner;

(5) a certified copy of the affidavit of affixation with the original Manufacturer's Statement of Origin in accordance with Section 30 of the Conveyance and Encumbrance of Manufactured Homes Act;

(6) the name and mailing address of each person wishing written acknowledgment of surrender from the Secretary of State; and

(7) any other information and documents the Secretary of State reasonably requires to identify the owner of the manufactured home and to enable him or her to determine whether the owner satisfied the requirements of Section 35 of the Conveyance and Encumbrance of Manufactured Homes Act and is entitled to surrender the Manufacturer's Statement of Origin, and the existence or non-existence of security interests in or liens on the manufactured home.

(b) When satisfied as to the genuineness and regularity of the surrender of a manufactured home's Manufacturer's Statement of Origin, and upon satisfaction of the requirements of subsection (a) of this Section, the Secretary of State shall (i) cancel the Manufacturer's Statement of Origin and update his or her records pursuant to Section 3-106 of this Code and (ii) provide written acknowledgment of compliance with the provisions of this Section to each person identified on the application for surrender of the Manufacturer's Statement of Origin pursuant to subsection (a)(7) of this Section.

(c) Upon satisfaction of the requirements of this Section, a manufactured home shall be conveyed and encumbered as provided in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act. If the application to surrender a Manufacturer's Statement of Origin is delivered to the Secretary of State within 60 days of recording the related affidavit of affixation with the recording officer in the county in which the real property to which the manufactured home is or shall be affixed and the application is thereafter accepted by the Secretary of State, the requirements of this Section shall be deemed satisfied as of the date the affidavit of affixation is recorded.

(d) Upon written request, the Secretary of State shall provide written acknowledgment of compliance with the provisions of this Section.

(625 ILCS 5/3-116.2 new)

Sec. 3-116.2. Surrender of title to a manufactured home.

(a) The owner or owners of a manufactured home that is covered by a certificate of title and that is permanently affixed to real property or which the owner intends to permanently affix to real property as defined in Section 10 of the Conveyance and Encumbrance of Manufactured Homes Act, may surrender the manufactured home's certificate of title to the Secretary of State by filing with the Secretary of State an application for surrender of title, containing or accompanied by:

(1) the name, residence, and mailing address of the owner;

(2) a description of the manufactured home including the name of the manufacturer, the make, the model name, the model year, the dimensions, the vehicle identification number or numbers of the manufactured home, whether it is new or used, and any other information the Secretary of State requires;

(3) the date of purchase by the owner of the manufactured home, the name and address of the person from whom the home was acquired, and the names and addresses of any security interest holders and lienholders in the order of their apparent priority;

(4) a statement signed by the owner, stating either, (i) any facts or information known to the owner that could reasonably affect the validity of the title to the manufactured home or the existence or non-existence of a security interest in or lien on it; or (ii) that no such facts or information are known to the owner;

(5) a certified copy of the affidavit of affixation as provided by Section 15 of the Conveyance and Encumbrance of Manufactured Homes Act;

(6) the original certificate of title;

(7) the name and mailing address of each person wishing written acknowledgment of surrender from the Secretary of State; and

(8) any other information and documents the Secretary of State reasonably requires to identify the owner of the manufactured home and to enable him or her to determine whether the owner satisfied the requirements of Section 35 of the Conveyance and Encumbrance of Manufactured Homes Act and is entitled to surrender the certificate of title and the existence or non-existence of security interests in or liens on the manufactured home.

(b) The Secretary of State shall not accept for surrender a certificate of title to a manufactured home unless and until all security interests or liens perfected pursuant to Sections 3-106 and 3-202 of this Code have been released;

(c) When satisfied as to the genuineness and regularity of the surrender of a manufactured home's certificate of title, and upon satisfaction of the requirements of subsections (a) and (b) of this Section, the Secretary of State shall (i) cancel the certificate of title and update his or her records in accordance with the provisions of Section 3-106 of this Code and (ii) provide written acknowledgment of compliance with the provisions of this Section to each person identified on the application for surrender of title pursuant to subsection (a)(7) of this Section.

(d) Upon satisfaction of the requirements of this Section, a manufactured home shall be conveyed and encumbered as provided in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act. If the application to surrender a certificate of title is delivered to the Secretary of State within 60 days of recording the related affidavit of affixation with the recording officer in the county in which the real property to which the manufactured home is or shall be affixed, and the application is thereafter accepted by the Secretary of State, the requirements of this Section shall be deemed satisfied as of the date the affidavit of affixation is recorded.

(e) Upon written request, the Secretary of State shall provide written acknowledgment of compliance with the provisions of this Section.

(625 ILCS 5/3-116.3 new)

Sec. 3-116.3. Confirmation of conversion of a manufactured home to real property.

(a) The owner or owners of a manufactured home that is not covered by a Manufacturer's Statement of Origin or a certificate of title, or that is covered by a Manufacturer's Statement of Origin or a certificate of title which the owner of the manufactured home is unable to produce after diligent search and inquiry, and that is permanently affixed to real property or which the owner intends to permanently affix to real property as defined in Section 10 of the Conveyance and Encumbrance of Manufactured Homes Act, may apply to the Secretary of State by filing with the Secretary of State an application for confirmation of conversion, containing or accompanied by:

(1) the name, residence, and mailing address of the owner;

(2) a description of the manufactured home including the name of the manufacturer, the make, the model name, the model year, the dimensions, the vehicle identification number of the manufactured home, whether it is new or used, and any other information the Secretary of State requires;

(3) the date of purchase by the owner of the manufactured home, the name and address of the person from whom the home was acquired, and the names and addresses of any security interest holders and lienholders in the order of their apparent priority;

(4) a statement signed by the owner, stating either (i) any facts or information known to the owner that could reasonably affect the validity of the title to the manufactured home or the existence or non-existence of a security interest in or lien on it; or (ii) that no such facts or information are known to the owner;

(5) a certified copy of the affidavit of affixation as provided in accordance with Section 30 of the Conveyance and Encumbrance of Manufactured Homes Act;

(6) a sworn declaration by an attorney at law duly admitted to practice in the courts of the State of Illinois, or an agent of a title insurance company duly licensed to issue policies of title insurance in the State of Illinois, that the manufactured home is free and clear of all security interests, liens, and encumbrances, and (i) any facts or information known to him or her that could reasonably affect the validity of the title of the manufactured home or the existence or non-existence of any security interest in or lien on it; or (ii) that no such facts or information are known to him or her;

(7) the name and mailing address of each person wishing written acknowledgment of surrender from the Secretary of State; and

(8) any other information and documents the Secretary of State reasonably requires to identify the owner of the manufactured home and to enable him or her to determine whether the owner satisfied the requirements of Section 35 of the Conveyance and Encumbrance of Manufactured Homes Act, and the existence or non-existence of security interests in or liens on the manufactured home.

(b) When satisfied as to the genuineness and regularity of the application for confirmation of conversion of a manufactured home, and upon satisfaction of the requirements of subsection (a) of this Section, the Secretary of State shall (i) update his or her records in accordance with the provisions of Section 3-106 of this Code and (ii) provide written acknowledgment of compliance with the provisions of this Section to each person identified on the application for confirmation of conversion pursuant to subsection (a)(7) of this Section.

(c) Upon satisfaction of the requirements of this Section, a manufactured home shall be conveyed and encumbered as provided in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act. If the application for confirmation of conversion of a manufactured home is delivered to the Secretary of State within 60 days of recording the related affidavit of affixation with the recording officer in the county in which the real property to which the manufactured home is or shall be affixed, and the application is thereafter accepted by the Secretary of State, the requirements of this Section shall be deemed satisfied as of the date the affidavit of affixation is recorded.

(d) Upon written request, the Secretary of State shall provide written acknowledgment of compliance with the provisions of this Section.

(625 ILCS 5/3-116.4 new)

Sec. 3-116.4. Application for a certificate of title to a severed manufactured home.

(a) Notwithstanding any other provision of law, where a manufactured home has been permanently affixed to real property, and an affidavit of affixation has been recorded as part of the real property records in the county in which the manufactured home is located pursuant to Section 15 of the Conveyance and Encumbrance of Manufactured Homes Act, and where the manufactured home subsequently is detached or severed from the real property, the owner or owners of the manufactured home may apply for a new certificate of title by filing with the Secretary of State an application for a certificate of title to a manufactured home, containing or accompanied by:

(1) the name, residence, and mailing address of the owner;

(2) a description of the manufactured home including the name of the manufacturer, the make, the model name, the model year, the dimensions, the vehicle identification number or numbers of the manufactured home, whether it is new or used, and any other information the Secretary of State requires;

(3) a statement signed by the applicant, stating either: (i) any facts or information known to the applicant that could reasonably affect the validity of the title of the manufactured home or the existence or non-existence of any security interest in or lien on it; or (ii) that no such facts or information are known to the applicant;

(4) a certified copy of the affidavit of severance provided in accordance with Section 55 of the Conveyance and Encumbrance of Manufactured Homes Act.

(5) a sworn declaration by an attorney at law duly admitted to practice in the courts of the State of Illinois, or an agent of a title insurance company duly licensed to issue policies of title insurance in the State of Illinois, that the manufactured home is free and clear of all security interests, liens, and encumbrances, and (i) any facts or information known to him or her that could reasonably affect the validity of the title of the manufactured home or the existence or non-existence of any security interest in or lien on it; or (ii) that no such facts or information are known to him or her; and

(6) any other information and documents the Secretary of State reasonably requires to identify the manufactured home and to enable him or her to determine whether the owner is entitled to a certificate of title, and the existence or non-existence of security interests in or liens on the manufactured home.

(b) When satisfied as to its genuineness and regularity the application for a certificate of title to a manufactured home, and upon satisfaction of the requirements of subsection (a) of this Section, the Secretary of State shall issue a new certificate of title and update his or her records in accordance with the provisions of Section 3-106 of this Code.

(c) Immediately upon satisfaction of the requirements of this Section and thereafter, a manufactured home shall be conveyed and encumbered as personal property.

(625 ILCS 5/3-202) (from Ch. 95 1/2, par. 3-202)

Sec. 3-202. Perfection of security interest.

(a) Unless excepted by Section 3-201, a security interest in a vehicle of a type for which a certificate of title is required is not valid against subsequent transferees or lienholders of the vehicle unless perfected as provided in this Act. A purchase money security interest in a manufactured home is perfected against the rights of judicial lien creditors and execution creditors on and after the date such purchase money security interest attaches.

(b) A security interest is perfected by the delivery to the Secretary of State of the existing certificate of title, if any, an application for a certificate of title containing the name and address of the lienholder and the required fee. The security interest is perfected as of the time of its creation if the delivery to the Secretary of State is completed within 30 days after the creation of the security interest or receipt by the new lienholder of the existing certificate of title from a prior lienholder or licensed dealer, otherwise as of the time of the delivery.

(c) If a vehicle is subject to a security interest when brought into this State, the validity of the security interest is determined by the law of the jurisdiction where the vehicle was when the security interest attached, subject to the following:

1. If the parties understood at the time the security interest attached that the vehicle would be kept in this State and it was brought into this State within 30 days thereafter for purposes other than transportation through this State, the validity of the security interest in this State is determined by the law of this State.

2. If the security interest was perfected under the law of the jurisdiction where the vehicle was when the security interest attached, the following rules apply:

(A) If the name of the lienholder is shown on an existing certificate of title issued by that jurisdiction, his security interest continues perfected in this State.

(B) If the name of the lienholder is not shown on an existing certificate of title issued by that jurisdiction, a security interest may be perfected by the lienholder delivering to the Secretary of State the prescribed notice and by payment of the required fee. Such security interest is perfected as of the time of delivery of the prescribed notice and payment of the required fee.

3. If the security interest was not perfected under the law of the jurisdiction where the vehicle was when the security interest attached, it may be perfected in this State; in that case perfection dates from the time of perfection in this State.

4. A security interest may be perfected under paragraph 3 of this subsection either as provided in subsection (b) or by the lienholder delivering to the Secretary of State a notice of security interest in the form the Secretary of State prescribes and the required fee.

(d) Except as otherwise provided in the Conveyance and Encumbrance of Manufactured Homes Act and Sections 3-116.1, 3-116.2, and 3-207 of this Code, after a certificate of title has been issued for a manufactured home and as long as the manufactured home is subject to any security interest perfected pursuant to this Section, the Secretary of State shall not file an affidavit of affixation, nor cancel the Manufacturer's Statement of Origin, nor revoke the certificate of title, nor issue a certificate of title under Section 3-106 of this Code; and, in any event, the validity and priority of any security interest perfected pursuant to this Section shall continue, notwithstanding the provision of any other law.

(Source: P.A. 95-284, eff. 1-1-08.)

(625 ILCS 5/3-205) (from Ch. 95 1/2, par. 3-205)

Sec. 3-205. Release of security interest.

(a) Within 21 days after receiving payment to satisfy a security interest in a vehicle for which the certificate of title is in the possession of the lienholder, he shall execute a release of his security interest, and mail or deliver the certificate and release to the next lienholder named therein, or, if none, to the owner or any person who delivers to the lienholder an authorization from the owner to receive the certificate. If the payment is in the form of cash, a cashier's check, or a certified check, the number of days is reduced to 10 business days. If the owner desires a new certificate reflecting no lien, the certificate and release from the lienholder may be submitted to the Secretary of State, along with the prescribed application and required fee, for issuance of that new certificate.

(b) Within 21 days after receiving payment to satisfy a security interest in a vehicle for which the certificate of title is in the possession of a prior lienholder, the lienholder whose security interest is satisfied shall execute a release and deliver the release to the owner or any person who delivers to the lienholder an authorization from the owner to receive it. If the payment is in the form of cash, a cashier's check, or a certified check, the number of days is reduced to 10 business days. The lienholder in possession of the certificate of title may either deliver the certificate to the owner, or the person authorized by him, for delivery to the Secretary of State, or, upon receipt of the release, may mail or may deliver the certificate and release, along with prescribed application and require fee, to the Secretary of State, who shall issue a new certificate.

(c) In addition to any other penalty, a lienholder who fails to execute a release of his or her security interest or who fails to mail or deliver the certificate and release within the time limit provided in subsection (a) or (b) is liable to the person or entity that was supposed to receive the release or certificate for $150 plus reasonable attorney fees and court costs. An action under this Section may be brought in small claims court or in any other appropriate court.

(d) The holder of a security interest in or a lien on a manufactured home may deliver lien release documents to any person to facilitate conveying or encumbering the manufactured home. Any person receiving the lien release documents, so delivered, holds the documents in trust for the security interest holder or the lienholder.

(Source: P.A. 93-621, eff. 12-15-03.)

(625 ILCS 5/3-207) (from Ch. 95 1/2, par. 3-207)

Sec. 3-207. Exclusiveness of procedure.

The method provided in this act of perfecting and giving notice of security interests subject to this act is exclusive. Security interests subject to this act are hereby exempted from the provisions of law which otherwise require or relate to the recording or filing of instruments creating or evidencing security interests in vehicles including chattel mortgages and conditional sale agreements, provided, however, that upon recording an affidavit of affixation for a manufactured home that is or will be permanently affixed pursuant to Section 10 of the Conveyance and Encumbrance of Manufactured Homes Act, and satisfaction, as applicable, of the requirements of Sections 3-116.1, 3-116.2, or 3-116.3 of this Code, any perfection or termination of a security interest with respect to such permanently affixed property shall be governed by the Property Chapter.

(Source: P.A. 76-1586.)

(625 ILCS 5/3-208) (from Ch. 95 1/2, par. 3-208)

Sec. 3-208. Suspension or revocation of certificates.

(a) (1) The Secretary of State may suspend or revoke a certificate of title, upon notice and reasonable opportunity to be heard in accordance with Section 2-118, when authorized by any other provision of law or if he finds:

1. The certificate of title was fraudulently procured or erroneously issued, or

2. The vehicle has been scrapped, dismantled or destroyed.

(2) Except as provided in Section 3-116.2 of this Code, the Secretary of State shall not suspend or revoke a certificate of title to a manufactured home because it, at any time and in any manner, became affixed to real property.

(b) Suspension or revocation of a certificate of title does not, in itself, affect the validity of a security interest noted on it.

(c) When the Secretary of State suspends or revokes a certificate of title, the owner or person in possession of it shall, immediately upon receiving notice of the suspension or revocation, mail or deliver the certificate to the Secretary of State.

(d) The Secretary of State may seize and impound any certificate of title which has been suspended or revoked.

(Source: P.A. 76-1586.)

Section 105. The Code of Civil Procedure is amended by changing Section 15-1213 as follows:

(735 ILCS 5/15-1213) (from Ch. 110, par. 15-1213)

Sec. 15-1213. Real Estate. "Real estate" means land or any estate or interest in, over or under land (including minerals, air rights, structures, fixtures and other things which by custom, usage or law pass with a conveyance of land though not described or mentioned in the contract of sale or instrument of conveyance). "Mortgaged real estate" means the real estate which is the subject of a mortgage. "Real Estate" includes a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is real property as defined in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act.

(Source: P.A. 84-1462.)

Section 110. The Conveyances Act is amended by changing Section 38 as follows:

(765 ILCS 5/38) (from Ch. 30, par. 37)

Sec. 38. The term "real estate," as used in this act, shall be construed as co-extensive in meaning with "lands, tenements and hereditaments," and as embracing all chattels real. "Real estate" and "real property" include a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is real property as defined in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act. This act shall not be construed so as to embrace last wills, except as herein expressly provided.

(Source: P.A. 84-551.)

Section 115. The Residential Real Property Disclosure Act is amended by changing Section 5 as follows:

(765 ILCS 77/5)

Sec. 5. Definitions. As used in this Act, unless the context otherwise requires the following terms have the meaning given in this Section.

"Residential real property" means real property improved with not less than one nor more than 4 residential dwelling units; units in residential cooperatives; or, condominium units, including the limited common elements allocated to the exclusive use thereof that form an integral part of the condominium unit. The term includes a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is real property as defined in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act.

"Seller" means every person or entity who is an owner, beneficiary of a trust, contract purchaser or lessee of a ground lease, who has an interest (legal or equitable) in residential real property. However, "seller" shall not include any person who has both (i) never occupied the residential real property and (ii) never had the management responsibility for the residential real property nor delegated such responsibility for the residential real property to another person or entity.

"Prospective buyer" means any person or entity negotiating or offering to become an owner or lessee of residential real property by means of a transfer for value to which this Act applies.

(Source: P.A. 90-383, eff. 1-1-98.)

Section 120. The Mortgage Act is amended by adding Section 13.1 as follows:

(765 ILCS 905/13.1 new)

Sec. 13.1. As used in this Act:

"Real estate" and "real property" include a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is real property as defined in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act.

Section 125. The Joint Tenancy Act is amended by adding Section 5 as follows:

(765 ILCS 1005/5 new)

Sec. 5. As used in this Act:

"Real estate" and "real property" include a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is real property as defined in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act.

Section 130. The Interest Act is amended by changing Sections 4, 4.2, and 4a as follows:

(815 ILCS 205/4) (from Ch. 17, par. 6404)

Sec. 4. General interest rate.

(1) Except as otherwise provided in Section 4.05, in all written contracts it shall be lawful for the parties to stipulate or agree that 9% per annum, or any less sum of interest, shall be taken and paid upon every $100 of money loaned or in any manner due and owing from any person to any other person or corporation in this state, and after that rate for a greater or less sum, or for a longer or shorter time, except as herein provided.

The maximum rate of interest that may lawfully be contracted for is determined by the law applicable thereto at the time the contract is made. Any provision in any contract, whether made before or after July 1, 1969, which provides for or purports to authorize, contingent upon a change in the Illinois law after the contract is made, any rate of interest greater than the maximum lawful rate at the time the contract is made, is void.

It is lawful for a state bank or a branch of an out-of-state bank, as those terms are defined in Section 2 of the Illinois Banking Act, to receive or to contract to receive and collect interest and charges at any rate or rates agreed upon by the bank or branch and the borrower. It is lawful for a savings bank chartered under the Savings Bank Act or a savings association chartered under the Illinois Savings and Loan Act of 1985 to receive or contract to receive and collect interest and charges at any rate agreed upon by the savings bank or savings association and the borrower.

It is lawful to receive or to contract to receive and collect interest and charges as authorized by this Act and as authorized by the Consumer Installment Loan Act and by the "Consumer Finance Act", approved July 10, 1935, as now or hereafter amended, or by the Payday Loan Reform Act. It is lawful to charge, contract for, and receive any rate or amount of interest or compensation with respect to the following transactions:

(a) Any loan made to a corporation;

(b) Advances of money, repayable on demand, to an amount not less than $5,000, which are made upon warehouse receipts, bills of lading, certificates of stock, certificates of deposit, bills of exchange, bonds or other negotiable instruments pledged as collateral security for such repayment, if evidenced by a writing;

(c) Any credit transaction between a merchandise wholesaler and retailer; any business loan to a business association or copartnership or to a person owning and operating a business as sole proprietor or to any persons owning and operating a business as joint venturers, joint tenants or tenants in common, or to any limited partnership, or to any trustee owning and operating a business or whose beneficiaries own and operate a business, except that any loan which is secured (1) by an assignment of an individual obligor's salary, wages, commissions or other compensation for services, or (2) by his household furniture or other goods used for his personal, family or household purposes shall be deemed not to be a loan within the meaning of this subsection; and provided further that a loan which otherwise qualifies as a business loan within the meaning of this subsection shall not be deemed as not so qualifying because of the inclusion, with other security consisting of business assets of any such obligor, of real estate occupied by an individual obligor solely as his residence. The term "business" shall be deemed to mean a commercial, agricultural or industrial enterprise which is carried on for the purpose of investment or profit, but shall not be deemed to mean the ownership or maintenance of real estate occupied by an individual obligor solely as his residence;

(d) Any loan made in accordance with the provisions of Subchapter I of Chapter 13 of Title 12 of the United States Code, which is designated as "Housing Renovation and Modernization";

(e) Any mortgage loan insured or upon which a commitment to insure has been issued under the provisions of the National Housing Act, Chapter 13 of Title 12 of the United States Code;

(f) Any mortgage loan guaranteed or upon which a commitment to guaranty has been issued under the provisions of the Veterans' Benefits Act, Subchapter II of Chapter 37 of Title 38 of the United States Code;

(g) Interest charged by a broker or dealer registered under the Securities Exchange Act of 1934, as amended, or registered under the Illinois Securities Law of 1953, approved July 13, 1953, as now or hereafter amended, on a debit balance in an account for a customer if such debit balance is payable at will without penalty and is secured by securities as defined in Uniform Commercial Code-Investment Securities;

(h) Any loan made by a participating bank as part of any loan guarantee program which provides for loans and for the refinancing of such loans to medical students, interns and residents and which are guaranteed by the American Medical Association Education and Research Foundation;

(i) Any loan made, guaranteed, or insured in accordance with the provisions of the Housing Act of 1949, Subchapter III of Chapter 8A of Title 42 of the United States Code and the Consolidated Farm and Rural Development Act, Subchapters I, II, and III of Chapter 50 of Title 7 of the United States Code;

(j) Any loan by an employee pension benefit plan, as defined in Section 3 (2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C.A. Sec. 1002), to an individual participating in such plan, provided that such loan satisfies the prohibited transaction exemption requirements of Section 408 (b) (1) (29 U.S.C.A. Sec. 1108 (b) (1)) or Section 2003 (a) (26 U.S.C.A. Sec. 4975 (d) (1)) of the Employee Retirement Income Security Act of 1974;

(k) Written contracts, agreements or bonds for deed providing for installment purchase of real estate, including a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is real property as defined in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act;

(1) Loans secured by a mortgage on real estate, including a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is real property as defined in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act;

(m) Loans made by a sole proprietorship, partnership, or corporation to an employee or to a person who has been offered employment by such sole proprietorship, partnership, or corporation made for the sole purpose of transferring an employee or person who has been offered employment to another office maintained and operated by the same sole proprietorship, partnership, or corporation;

(n) Loans to or for the benefit of students made by an institution of higher education.

(2) Except for loans described in subparagraph (a), (c), (d), (e), (f) or (i) of subsection (1) of this Section, and except to the extent permitted by the applicable statute for loans made pursuant to Section 4a or pursuant to the Consumer Installment Loan Act:

(a) Whenever the rate of interest exceeds 8% per annum on any written contract, agreement or bond for deed providing for the installment purchase of residential real estate, or on any loan secured by a mortgage on residential real estate, it shall be unlawful to provide for a prepayment penalty or other charge for prepayment.

(b) No agreement, note or other instrument evidencing a loan secured by a mortgage on residential real estate, or written contract, agreement or bond for deed providing for the installment purchase of residential real estate, may provide for any change in the contract rate of interest during the term thereof. However, if the Congress of the United States or any federal agency authorizes any class of lender to enter, within limitations, into mortgage contracts or written contracts, agreements or bonds for deed in which the rate of interest may be changed during the term of the contract, any person, firm, corporation or other entity not otherwise prohibited from entering into mortgage contracts or written contracts, agreements or bonds for deed in Illinois may enter into mortgage contracts or written contracts, agreements or bonds for deed in which the rate of interest may be changed during the term of the contract, within the same limitations.

(3) In any contract or loan which is secured by a mortgage, deed of trust, or conveyance in the nature of a mortgage, on residential real estate, the interest which is computed, calculated, charged, or collected pursuant to such contract or loan, or pursuant to any regulation or rule promulgated pursuant to this Act, may not be computed, calculated, charged or collected for any period of time occurring after the date on which the total indebtedness, with the exception of late payment penalties, is paid in full.

For purposes of this Section, a prepayment shall mean the payment of the total indebtedness, with the exception of late payment penalties if incurred or charged, on any date before the date specified in the contract or loan agreement on which the total indebtedness shall be paid in full, or before the date on which all payments, if timely made, shall have been made. In the event of a prepayment of the indebtedness which is made on a date after the date on which interest on the indebtedness was last computed, calculated, charged, or collected but before the next date on which interest on the indebtedness was to be calculated, computed, charged, or collected, the lender may calculate, charge and collect interest on the indebtedness for the period which elapsed between the date on which the prepayment is made and the date on which interest on the indebtedness was last computed, calculated, charged or collected at a rate equal to 1/360 of the annual rate for each day which so elapsed, which rate shall be applied to the indebtedness outstanding as of the date of prepayment. The lender shall refund to the borrower any interest charged or collected which exceeds that which the lender may charge or collect pursuant to the preceding sentence. The provisions of this amendatory Act of 1985 shall apply only to contracts or loans entered into on or after the effective date of this amendatory Act, but shall not apply to contracts or loans entered into on or after that date that are subject to Section 4a of this Act, the Consumer Installment Loan Act, the Payday Loan Reform Act, or the Retail Installment Sales Act, or that provide for the refund of precomputed interest on prepayment in the manner provided by such Act.

For purposes of this Section, "real estate" and "real property" include a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is real property as defined in Section 40 the Conveyance and Encumbrance of Manufactured Homes Act.

(Source: P.A. 94-13, eff. 12-6-05; 94-635, eff. 8-22-05; 95-331, eff. 8-21-07.)

(815 ILCS 205/4.2) (from Ch. 17, par. 6407)

Sec. 4.2. Revolving credit; billing statements; disclosures. On a revolving credit which complies with subparagraphs (a), (b), (c), (d) and (e) of this Section 4.2, it is lawful for any bank that has its main office or, after May 31, 1997, a branch in this State, a state or federal savings and loan association with its main office in this State, a state or federal credit union with its main office in this State, or a lender licensed under the Consumer Finance Act, the Consumer Installment Loan Act or the Sales Finance Agency Act, as such Acts are now and hereafter amended, to receive or contract to receive and collect interest in any amount or at any rate agreed upon by the parties to the revolving credit arrangement. It is lawful for any other lender to receive or contract to receive and collect interest in an amount not in excess of 1 1/2% per month of either the average daily unpaid balance of the principal of the debt during the billing cycle, or of the unpaid balance of the debt on approximately the same day of the billing cycle. If a lender under a revolving credit arrangement notifies the debtor at least 30 days in advance of any lawful increase in the amount or rate of interest to be charged under the revolving credit arrangement, and the debtor, after the effective date of such notice, incurs new debt pursuant to the revolving credit arrangement, the increased interest amount or rate may be applied only to any such new debt incurred under the revolving credit arrangement. For purposes of determining the balances to which the increased interest rate applies, all payments and other credits may be deemed to be applied to the balance existing prior to the change in rate until that balance is paid in full. The face amount of the drafts, items, orders for the payment of money, evidences of debt, or similar written instruments received by the lender in connection with the revolving credit, less the amounts applicable to principal from time to time paid thereon by the debtor, are the unpaid balance of the debt upon which the interest is computed. If the billing cycle is not monthly, the maximum interest rate for the billing cycle is the percentage which bears the same relation to the monthly percentage provided for in the preceding sentence as the number of days in the billing cycle bears to 30. For the purposes of the foregoing computation, a "month" is deemed to be any time of 30 consecutive days. In addition to the interest charge provided for, it is lawful to receive, contract for or collect a charge not exceeding 25 cents for each transaction in which a loan or advance is made under the revolving credit or in lieu of this additional charge an annual fee for the privilege of receiving and using the revolving credit in an amount not exceeding $20. In addition, with respect to revolving credit secured by an interest in real estate, including a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is real property as defined in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act, it is also lawful to receive, contract for or collect fees lawfully paid to any public officer or agency to record, file or release the security, and costs and disbursements actually incurred for any title insurance, title examination, abstract of title, survey, appraisal, escrow fees, and fees paid to a trustee in connection with a trust deed.

(a) At or before the date a bill or statement is first rendered to the debtor under a revolving credit arrangement, the lender must mail or deliver to the debtor a written description of the conditions under which a charge for interest may be made and the method, including the rate, of computing these interest charges. The rate of interest must be expressed as an annual percentage rate.

(b) If during any billing cycle any debit or credit entry is made to a debtor's revolving credit account, and if at the end of that billing cycle there is an unpaid balance owing to the lender from the debtor, the lender must give to the debtor the following information within a reasonable time after the end of the billing cycle:

(i) the unpaid balance at the beginning of the billing cycle;

(ii) the date and amount of all loans or advances made during the billing cycle, which information may be supplied by enclosing a copy of the drafts, items, orders for the payment of money, evidences of debt or similar written instruments presented to the lender during the billing cycle;

(iii) the payments by the debtor to the lender and any other credits to the debtor during the billing cycle;

(iv) the amount of interest and other charges, if any, charged to the debtor's account during the billing cycle;

(v) the amount which must be currently paid by the debtor and the date on which that amount must be paid in order to avoid delinquency;

(vi) the total amount remaining unpaid at the end of the billing cycle and the right of the debtor to prepay that amount in full without penalty; and

(vii) information required by (iv), (v) and (vi) must be set forth in type of equal size and equal conspicuousness.

(c) The revolving credit arrangement may provide for the payment by the debtor and receipt by the lender of all costs and disbursements, including reasonable attorney's fees, incurred by the lender in legal proceedings to collect or enforce the debt in the event of delinquency by the debtor or in the event of a breach of any obligation of the debtor under the arrangement.

(d) The lender under a revolving credit arrangement may provide credit life insurance or credit accident and health insurance, or both, with respect to the debtor and may charge the debtor therefor. Credit life insurance and credit accident and health insurance, and any charge therefor made to the debtor, shall comply with Article IX 1/2 of the Illinois Insurance Code, as now or hereafter amended, and all lawful requirements of the Director of Insurance related thereto. This insurance is in force with respect to each loan or advance made under a revolving credit arrangement as soon as the loan or advance is made. The purchase of this insurance from an agent, broker or insurer specified by the lender may not be a condition precedent to the revolving credit arrangement or to the making of any loan or advance thereunder.

(e) Whenever interest is contracted for or received under this Section, no amount in addition to the charges authorized by this Act may be directly or indirectly charged, contracted for or received whether as interest, service charges, costs of investigations or enforcements or otherwise.

(f) The lender under a revolving credit arrangement must compute at year end the total amount charged to the debtor's account during the year, including service charges, finance charges, late charges and any other charges authorized by this Act, and upon request must furnish such information to the debtor within 30 days after the end of the year, or if the account has been terminated during such year, may give such requested information within 30 days after such termination. The lender shall annually inform the debtor of his right to obtain such information.

(g) A lender who complies with the federal Truth in Lending Act, amendments thereto, and any regulations issued or which may be issued thereunder, shall be deemed to be in compliance with the provisions of subparagraphs (a) and (b) of this Section.

(h) Anything in this Section 4.2 to the contrary notwithstanding, if the Congress of the United States or any federal agency authorizes any class of lenders to enter, within limitations, into a revolving credit arrangement secured by a mortgage or deed of trust on residential real property, any person, firm, corporation or other entity, not otherwise prohibited by the Congress of the United States or any federal agency from entering into revolving credit arrangements secured by a mortgage or deed of trust on residential real property, may enter into such arrangements within the same limitations.

(Source: P.A. 89-208, eff. 9-29-95.)

(815 ILCS 205/4a) (from Ch. 17, par. 6410)

Sec. 4a. Installment loan rate.

(a) On money loaned to or in any manner owing from any person, whether secured or unsecured, except where the money loaned or in any manner owing is directly or indirectly for the purchase price of real estate or an interest therein and is secured by a lien on or retention of title to that real estate or interest therein, to an amount not more than $25,000 (excluding interest) which is evidenced by a written instrument providing for the payment thereof in 2 or more periodic installments over a period of not more than 181 months from the date of the execution of the written instrument, it is lawful to receive or to contract to receive and collect either:

(i) interest in an amount equivalent to interest computed at a rate not exceeding 9% per year on the entire principal amount of the money loaned or in any manner owing for the period from the date of the making of the loan or the incurring of the obligation for the amount owing evidenced by the written instrument until the date of the maturity of the last installment thereof, and to add that amount to the principal, except that there shall be no limit on the rate of interest which may be received or contracted to be received and collected by (1) any bank that has its main office or, after May 31, 1997, a branch in this State; (2) a savings and loan association chartered under the Illinois Savings and Loan Act of 1985, a savings bank chartered under the Savings Bank Act, or a federal savings and loan association established under the laws of the United States and having its main office in this State; or (3) any lender licensed under either the Consumer Finance Act or the Consumer Installment Loan Act, but in any case in which interest is received, contracted for or collected on the basis of this clause (i), the debtor may satisfy in full at any time before maturity the debt evidenced by the written instrument, and in so satisfying must receive a refund credit against the total amount of interest added to the principal computed in the manner provided under Section 15(f)(3) of the Consumer Installment Loan Act for refunds or credits of applicable interest on payment in full of precomputed loans before the final installment due date; or

(ii) interest accrued on the principal balance from time to time remaining unpaid, from the date of making of the loan or the incurring of the obligation to the date of the payment of the debt in full, at a rate not exceeding the annual percentage rate equivalent of the rate permitted to be charged under clause (i) above, but in any such case the debtor may, provided that the debtor shall have paid in full all interest and other charges accrued to the date of such prepayment, prepay the principal balance in full or in part at any time, and interest shall, upon any such prepayment, cease to accrue on the principal amount which has been prepaid.

(b) Whenever the principal amount of an installment loan is $300 or more and the repayment period is 6 months or more, a minimum charge of $15 may be collected instead of interest, but only one minimum charge may be collected from the same person during one year. When the principal amount of the loan (excluding interest) is $800 or less, the lender or creditor may contract for and receive a service charge not to exceed $5 in addition to interest; and that service charge may be collected when the loan is made, but only one service charge may be contracted for, received, or collected from the same person during one year.

(c) Credit life insurance and credit accident and health insurance, and any charge therefor which is deducted from the loan or paid by the obligor, must comply with Article IX 1/2 of the Illinois Insurance Code and all lawful requirements of the Director of Insurance related thereto. When there are 2 or more obligors on the loan contract, only one charge for credit life insurance and credit accident and health insurance may be made and only one of the obligors may be required to be insured. Insurance obtained from, by or through the lender or creditor must be in effect when the loan is transacted. The purchase of that insurance from an agent, broker or insurer specified by the lender or creditor may not be a condition precedent to the granting of the loan.

(d) The lender or creditor may require the obligor to provide property insurance on security other than household goods, furniture and personal effects. The amount and term of the insurance must be reasonable in relation to the amount and term of the loan contract and the type and value of the security, and the insurance must be procured in accordance with the insurance laws of this State. The purchase of that insurance from an agent, broker or insurer specified by the lender or creditor may not be a condition precedent to the granting of the loan.

(e) The lender or creditor may, if the contract provides, collect a delinquency and collection charge on each installment in default for a period of not less than 10 days in an amount not exceeding 5% of the installment on installments in excess of $200 or $10 on installments of $200 or less, but only one delinquency and collection charge may be collected on any installment regardless of the period during which it remains in default. In addition, the contract may provide for the payment by the borrower or debtor of attorney's fees incurred by the lender or creditor. The lender or creditor may enforce such a provision to the extent of the reasonable attorney's fees incurred by him in the collection or enforcement of the contract or obligation. Whenever interest is contracted for or received under this Section, no amount in addition to the charges authorized by this Section may be directly or indirectly charged, contracted for or received, except lawful fees paid to a public officer or agency to record, file or release security, and except costs and disbursements including reasonable attorney's fees, incurred in legal proceedings to collect a loan or to realize on a security after default. This Section does not prohibit the receipt of any commission, dividend or other benefit by the creditor or an employee, affiliate or associate of the creditor from the insurance authorized by this Section.

(f) When interest is contracted for or received under this Section, the lender must disclose the following items to the obligor in a written statement before the loan is consummated:

(1) the amount and date of the loan contract;

(2) the amount of loan credit using the term "amount financed";

(3) every deduction from the amount financed or payment made by the obligor for insurance and the type of insurance for which each deduction or payment was made;

(4) every other deduction from the loan or payment made by the obligor in connection with obtaining the loan;

(5) the date on which the finance charge begins to accrue if different from the date of the transaction;

(6) the total amount of the loan charge for the scheduled term of the loan contract with a description of each amount included using the term "finance charge";

(7) the finance charge expressed as an annual percentage rate using the term "annual percentage rate". "Annual percentage rate" means the nominal annual percentage rate of finance charge determined in accordance with the actuarial method of computation with an accuracy at least to the nearest 1/4 of 1%; or at the option of the lender by application of the United States rule so that it may be disclosed with an accuracy at least to the nearest 1/4 of 1%;

(8) the number, amount and due dates or periods of payments scheduled to repay the loan and the sum of such payments using the term "total of payments";

(9) the amount, or method of computing the amount of any default, delinquency or similar charges payable in the event of late payments;

(10) the right of the obligor to prepay the loan and the fact that such prepayment will reduce the charge for the loan;

(11) a description or identification of the type of any security interest held or to be retained or acquired by the lender in connection with the loan and a clear identification of the property to which the security interest relates. If after-acquired property will be subject to the security interest, or if other or future indebtedness is or may be secured by any such property, this fact shall be clearly set forth in conjunction with the description or identification of the type of security interest held, retained or acquired;

(12) a description of any penalty charge that may be imposed by the lender for prepayment of the principal of the obligation with an explanation of the method of computation of such penalty and the conditions under which it may be imposed;

(13) unless the contract provides for the accrual and payment of the finance charge on the balance of the amount financed from time to time remaining unpaid, an identification of the method of computing any unearned portion of the finance charge in the event of prepayment of the loan.

The terms "finance charge" and "annual percentage rate" shall be printed more conspicuously than other terminology required by this Section.

(g) At the time disclosures are made, the lender shall deliver to the obligor a duplicate of the instrument or statement by which the required disclosures are made and on which the lender and obligor are identified and their addresses stated. All of the disclosures shall be made clearly, conspicuously and in meaningful sequence and made together on either:

(i) the note or other instrument evidencing the obligation on the same side of the page and above or adjacent to the place for the obligor's signature; however, where a creditor elects to combine disclosures with the contract, security agreement, and evidence of a transaction in a single document, the disclosures required under this Section shall be made on the face of the document, on the reverse side, or on both sides, provided that the amount of the finance charge and the annual percentage rate shall appear on the face of the document, and, if the reverse side is used, the printing on both sides of the document shall be equally clear and conspicuous, both sides shall contain the statement, "NOTICE: See other side for important information", and the place for the customer's signature shall be provided following the full content of the document; or

(ii) one side of a separate statement which identifies the transaction.

The amount of the finance charge shall be determined as the sum of all charges, payable directly or indirectly by the obligor and imposed directly or indirectly by the lender as an incident to or as a condition to the extension of credit, whether paid or payable by the obligor, any other person on behalf of the obligor, to the lender or to a third party, including any of the following types of charges:

(1) Interest, time price differential, and any amount payable under a discount or other system of additional charges.

(2) Service, transaction, activity, or carrying charge.

(3) Loan fee, points, finder's fee, or similar charge.

(4) Fee for an appraisal, investigation, or credit report.

(5) Charges or premiums for credit life, accident, health, or loss of income insurance, written in connection with any credit transaction unless (a) the insurance coverage is not required by the lender and this fact is clearly and conspicuously disclosed in writing to the obligor; and (b) any obligor desiring such insurance coverage gives specific dated and separately signed affirmative written indication of such desire after receiving written disclosure to him of the cost of such insurance.

(6) Charges or premiums for insurance, written in connection with any credit transaction, against loss of or damage to property or against liability arising out of the ownership or use of property, unless a clear, conspicuous, and specific statement in writing is furnished by the lender to the obligor setting forth the cost of the insurance if obtained from or through the lender and stating that the obligor may choose the person through which the insurance is to be obtained.

(7) Premium or other charges for any other guarantee or insurance protecting the lender against the obligor's default or other credit loss.

(8) Any charge imposed by a lender upon another lender for purchasing or accepting an obligation of an obligor if the obligor is required to pay any part of that charge in cash, as an addition to the obligation, or as a deduction from the proceeds of the obligation.

A late payment, delinquency, default, reinstatement or other such charge is not a finance charge if imposed for actual unanticipated late payment, delinquency, default or other occurrence.

(h) Advertising for loans transacted under this Section may not be false, misleading, or deceptive. That advertising, if it states a rate or amount of interest, must state that rate as an annual percentage rate of interest charged. In addition, if charges other than for interest are made in connection with those loans, those charges must be separately stated. No advertising may indicate or imply that the rates or charges for loans are in any way "recommended", "approved", "set" or "established" by the State government or by this Act.

(i) A lender or creditor who complies with the federal Truth in Lending Act, amendments thereto, and any regulations issued or which may be issued thereunder, shall be deemed to be in compliance with the provisions of subsections (f), (g) and (h) of this Section.

(j) For purposes of this Section "real estate" includes a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is real property as defined in Section 40 of the Conveyance and Encumbrance of Manufactured Homes Act.

(Source: P.A. 92-483, eff. 8-23-01.)

Section 135. The Motor Vehicle Retail Installment Sales Act is amended by changing Section 2.1 as follows:

(815 ILCS 375/2.1) (from Ch. 121 1/2, par. 562.1)

Sec. 2.1.

"Motor vehicle" means a motor vehicle as defined in The Illinois Vehicle Code but does not include bicycles, motorcycles, motor scooters, snowmobiles, trailers, and farm equipment, and a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code.

(Source: P.A. 77-1167.)

Section 140. The Retail Installment Sales Act is amended by changing Section 2.1 as follows:

(815 ILCS 405/2.1) (from Ch. 121 1/2, par. 502.1)

Sec. 2.1. "Goods" means all goods used or purchased primarily for personal, family, or household purposes. "Goods" includes goods purchased primarily for agricultural purposes only for the purposes of the credit disclosure requirements of this Act. "Goods" includes merchandise certificates or coupons issued by a retail seller to be used in their face amount in the purchase of goods or services sold by such a seller but does not include money or other things in action. It also includes goods which are furnished or used, at the time of sale or subsequently, in the modernization, rehabilitation, repair, alteration, improvement, or construction of real estate so as to become a part of that real estate whether or not severable therefrom. "Goods" includes a manufactured home as defined in paragraph (53) of Section 9-102 of the Uniform Commercial Code that is not real property as defined in Section 40 of the Conveyance and Encumberance of Manufactured Homes Act. "Goods" does not include a motor vehicle as defined in The Illinois Vehicle Code, but does include bicycles, motorcycles, motor scooters, snowmobiles and trailers when purchased primarily for personal, family or household purposes. "Goods" does not include goods used or purchased primarily for business or commercial purposes.

(Source: P.A. 77-1166.)

Section 999. Effective date. This Act takes effect July 1, 2010.