Rep. Patricia R. Bellock

Filed: 3/19/2015

 

 


 

 


 
09900HB3369ham001LRB099 10087 MGM 32653 a

1
AMENDMENT TO HOUSE BILL 3369

2    AMENDMENT NO. ______. Amend House Bill 3369 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Residential Mortgage License Act of 1987 is
5amended by changing Sections 2-1, 2-2, 2-6, 4-5, and 4-8 as
6follows:
 
7    (205 ILCS 635/2-1)  (from Ch. 17, par. 2322-1)
8    Sec. 2-1. Licensee Name.
9    (a) No person, partnership, association, corporation,
10limited liability company, or other entity engaged in the
11business regulated by this Act shall operate such business
12under a name other than the real names of the entity and
13individuals conducting such business. Such business may in
14addition operate under , an assumed corporate name pursuant to
15the Business Corporation Act of 1983, an assumed limited
16liability company name pursuant to the Limited Liability

 

 

09900HB3369ham001- 2 -LRB099 10087 MGM 32653 a

1Company Act, or an assumed business name pursuant to the
2Assumed Business Name Act.
3    (b) A knowing violation of this Section constitutes an
4unlawful practice within the meaning of this Act, and in
5addition to the administrative relief available under this Act,
6may be prosecuted for the commission of a Class A misdemeanor.
7A person who is convicted of a second or subsequent violation
8of this Section is guilty of a Class 4 felony.
9(Source: P.A. 89-355, eff. 8-17-95.)
 
10    (205 ILCS 635/2-2)
11    Sec. 2-2. Application process; investigation; fee.
12    (a) The Secretary shall issue a license upon completion of
13all of the following:
14        (1) The filing of an application for license with the
15    Director or the Nationwide Mortgage Licensing System and
16    Registry as approved by the Director.
17        (2) The filing with the Secretary of a listing of
18    judgments entered against, and bankruptcy petitions by,
19    the license applicant for the preceding 10 years.
20        (3) The payment, in certified funds, of investigation
21    and application fees, the total of which shall be in an
22    amount equal to $2,700 annually. To comply with the common
23    renewal date and requirements of the Nationwide Mortgage
24    Licensing System and Registry, the term of initial licenses
25    may be extended or shortened with applicable fees prorated

 

 

09900HB3369ham001- 3 -LRB099 10087 MGM 32653 a

1    or combined accordingly.
2        (4) Except for a broker applying to renew a license,
3    the filing of an audited balance sheet including all
4    footnotes prepared by a certified public accountant in
5    accordance with generally accepted accounting principles
6    and generally accepted auditing standards which evidences
7    that the applicant meets the net worth requirements of
8    Section 3-5. Notwithstanding the requirements of this
9    subsection, an applicant that is a subsidiary may submit
10    audited consolidated financial statements of its parent,
11    intermediary parent, or ultimate parent as long as the
12    consolidated statements are supported by consolidating
13    statements which include the applicant's financial
14    statement. If the consolidating statements are unaudited,
15    the applicant's chief financial officer shall attest to the
16    applicant's financial statements disclosed in the
17    consolidating statements.
18        (5) The filing of proof satisfactory to the
19    Commissioner that the applicant, the members thereof if the
20    applicant is a partnership or association, the members or
21    managers thereof that retain any authority or
22    responsibility under the operating agreement if the
23    applicant is a limited liability company, or the officers
24    thereof if the applicant is a corporation have 3 years
25    experience preceding application in real estate finance.
26    Instead of this requirement, the applicant and the

 

 

09900HB3369ham001- 4 -LRB099 10087 MGM 32653 a

1    applicant's officers or members, as applicable, may
2    satisfactorily complete a program of education in real
3    estate finance and fair lending, as approved by the
4    Commissioner, prior to receiving the initial license. The
5    Commissioner shall promulgate rules regarding proof of
6    experience requirements and educational requirements and
7    the satisfactory completion of those requirements. The
8    Commissioner may establish by rule a list of duly licensed
9    professionals and others who may be exempt from this
10    requirement.
11        (6) An investigation of the averments required by
12    Section 2-4, which investigation must allow the
13    Commissioner to issue positive findings stating that the
14    financial responsibility, experience, character, and
15    general fitness of the license applicant and of the members
16    thereof if the license applicant is a partnership or
17    association, of the officers and directors thereof if the
18    license applicant is a corporation, and of the managers and
19    members that retain any authority or responsibility under
20    the operating agreement if the license applicant is a
21    limited liability company are such as to command the
22    confidence of the community and to warrant belief that the
23    business will be operated honestly, fairly and efficiently
24    within the purpose of this Act. If the Commissioner shall
25    not so find, he or she shall not issue such license, and he
26    or she shall notify the license applicant of the denial.

 

 

09900HB3369ham001- 5 -LRB099 10087 MGM 32653 a

1    The Commissioner may impose conditions on a license if the
2Commissioner determines that the conditions are necessary or
3appropriate. These conditions shall be imposed in writing and
4shall continue in effect for the period prescribed by the
5Commissioner.
6    (b) All licenses shall be issued to the license applicant.
7    Upon receipt of such license, a residential mortgage
8licensee shall be authorized to engage in the business
9regulated by this Act. Such license shall remain in full force
10and effect until it expires without renewal, is surrendered by
11the licensee or revoked or suspended as hereinafter provided.
12(Source: P.A. 97-891, eff. 8-3-12; 98-1081, eff. 1-1-15.)
 
13    (205 ILCS 635/2-6)
14    Sec. 2-6. License issuance and renewal; fee.
15    (a) Licenses Beginning July 1, 2003, licenses shall be
16renewed every year using on the anniversary of the date of
17issuance of the original license, or the common renewal date of
18the Nationwide Mortgage Licensing System and Registry as
19adopted by the Director. To comply with the common renewal date
20of the Nationwide Mortgage Licensing System and Registry, the
21term of existing licenses may be extended or shortened with
22applicable fees prorated accordingly. Properly completed
23renewal application forms and filing fees may must be received
24by the Secretary 60 days prior to the license expiration
25renewal date, but, to be deemed timely, the completed renewal

 

 

09900HB3369ham001- 6 -LRB099 10087 MGM 32653 a

1application forms and filing fees must be received by the
2Secretary no later than 30 days prior to the license expiration
3date.
4    (b) It shall be the responsibility of each licensee to
5accomplish renewal of its license; failure of the licensee to
6receive renewal forms absent a request sent by certified mail
7for such forms will not waive said responsibility. Failure by a
8licensee to submit a properly completed renewal application
9form and fees in a timely fashion, absent a written extension
10from the Secretary, will result in the license becoming
11inactive. in the assessment of additional fees, as follows:
12        (1) A fee of $567.50 will be assessed to the licensee
13    30 days after the proper renewal date and $1,135 each month
14    thereafter, until the license is either renewed or expires
15    pursuant to Section 2-6, subsections (c) and (d), of this
16    Act.
17        (2) Such fee will be assessed without prior notice to
18    the licensee, but will be assessed only in cases wherein
19    the Secretary has in his or her possession documentation of
20    the licensee's continuing activity for which the unrenewed
21    license was issued.
22    (c) A license which is not renewed by the date required in
23this Section shall automatically become inactive. No activity
24regulated by this Act shall be conducted by the licensee when a
25license becomes inactive. The Commissioner may require the
26licensee to provide a plan for the disposition of any

 

 

09900HB3369ham001- 7 -LRB099 10087 MGM 32653 a

1residential mortgage loans not closed or funded when the
2license becomes inactive. The Commissioner may allow a licensee
3with an inactive license to conduct activities regulated by
4this Act for the sole purpose of assisting borrowers in the
5closing or funding of loans for which the loan application was
6taken from a borrower while the license was active. An inactive
7license may be reactivated by the Commissioner upon payment of
8the renewal fee, and payment of a reactivation fee equal to the
9renewal fee.
10    (d) (Blank) A license which is not renewed within one year
11of becoming inactive shall expire.
12    (e) A licensee ceasing an activity or activities regulated
13by this Act and desiring to no longer be licensed shall so
14inform the Commissioner in writing and, at the same time,
15convey any the license issued and all other symbols or indicia
16of licensure. The licensee shall include a plan for the
17withdrawal from regulated business, including a timetable for
18the disposition of the business, and comply with the surrender
19guidelines or requirements of the Director. Upon receipt of
20such written notice, the Commissioner shall post the
21cancellation or issue a certified statement canceling the
22license.
23(Source: P.A. 95-1047, eff. 4-6-09; 96-112, eff. 7-31-09;
2496-1000, eff. 7-2-10.)
 
25    (205 ILCS 635/4-5)  (from Ch. 17, par. 2324-5)

 

 

09900HB3369ham001- 8 -LRB099 10087 MGM 32653 a

1    Sec. 4-5. Suspension, revocation of licenses; fines.
2    (a) Upon written notice to a licensee, the Commissioner may
3suspend or revoke any license issued pursuant to this Act if he
4or she shall make a finding of one or more of the following in
5the notice that:
6        (1) Through separate acts or an act or a course of
7    conduct, the licensee has violated any provisions of this
8    Act, any rule or regulation promulgated by the Commissioner
9    or of any other law, rule or regulation of this State or
10    the United States.
11        (2) Any fact or condition exists which, if it had
12    existed at the time of the original application for such
13    license would have warranted the Commissioner in refusing
14    originally to issue such license.
15        (3) If a licensee is other than an individual, any
16    ultimate equitable owner, officer, director, or member of
17    the licensed partnership, association, corporation, or
18    other entity has so acted or failed to act as would be
19    cause for suspending or revoking a license to that party as
20    an individual.
21    (b) No license shall be suspended or revoked, except as
22provided in this Section, nor shall any licensee be fined
23without notice of his or her right to a hearing as provided in
24Section 4-12 of this Act.
25    (c) The Commissioner, on good cause shown that an emergency
26exists, may suspend any license for a period not exceeding 180

 

 

09900HB3369ham001- 9 -LRB099 10087 MGM 32653 a

1days, pending investigation. Upon a showing that a licensee has
2failed to meet the experience or educational requirements of
3Section 2-2 or the requirements of subsection (g) of Section
43-2, the Commissioner shall suspend, prior to hearing as
5provided in Section 4-12, the license until those requirements
6have been met.
7    (d) The provisions of subsection (e) of Section 2-6 of this
8Act shall not affect a licensee's civil or criminal liability
9for acts committed prior to surrender of a license.
10    (e) No revocation, suspension or surrender of any license
11shall impair or affect the obligation of any pre-existing
12lawful contract between the licensee and any person.
13    (f) Every license issued under this Act shall remain in
14force and effect until the same shall have expired without
15renewal, have been surrendered, revoked or suspended in
16accordance with the provisions of this Act, but the
17Commissioner shall have authority to reinstate a suspended
18license or to issue a new license to a licensee whose license
19shall have been revoked if no fact or condition then exists
20which would have warranted the Commissioner in refusing
21originally to issue such license under this Act.
22    (g) Whenever the Commissioner shall revoke or suspend a
23license issued pursuant to this Act or fine a licensee under
24this Act, he or she shall forthwith execute a written order to
25that effect. The Commissioner shall publish notice of such
26order in the Illinois Register and post notice of the order on

 

 

09900HB3369ham001- 10 -LRB099 10087 MGM 32653 a

1an agency Internet site maintained by the Commissioner or on
2the Nationwide Mortgage Licensing System and Registry and shall
3forthwith serve a copy of such order upon the licensee. Any
4such order may be reviewed in the manner provided by Section
54-12 of this Act.
6    (h) When the Commissioner finds any person in violation of
7the grounds set forth in subsection (i), he or she may enter an
8order imposing one or more of the following penalties:
9        (1) Revocation of license;
10        (2) Suspension of a license subject to reinstatement
11    upon satisfying all reasonable conditions the Commissioner
12    may specify;
13        (3) Placement of the licensee or applicant on probation
14    for a period of time and subject to all reasonable
15    conditions as the Commissioner may specify;
16        (4) Issuance of a reprimand;
17        (5) Imposition of a fine not to exceed $25,000 for each
18    count of separate offense, provided that a fine may be
19    imposed not to exceed $75,000 for each separate count of
20    offense of paragraph (2) of subsection (i) of this Section;
21    and
22        (6) Denial of a license.
23    (i) The following acts shall constitute grounds for which
24the disciplinary actions specified in subsection (h) above may
25be taken:
26        (1) Being convicted or found guilty, regardless of

 

 

09900HB3369ham001- 11 -LRB099 10087 MGM 32653 a

1    pendency of an appeal, of a crime in any jurisdiction which
2    involves fraud, dishonest dealing, or any other act of
3    moral turpitude;
4        (2) Fraud, misrepresentation, deceit or negligence in
5    any mortgage financing transaction;
6        (3) A material or intentional misstatement of fact on
7    an initial or renewal application;
8        (4) Failure to follow the Commissioner's regulations
9    with respect to placement of funds in escrow accounts;
10        (5) Insolvency or filing under any provision of the
11    Bankruptcy Code as a debtor;
12        (6) Failure to account or deliver to any person any
13    property such as any money, fund, deposit, check, draft,
14    mortgage, or other document or thing of value, which has
15    come into his or her hands and which is not his or her
16    property or which he or she is not in law or equity
17    entitled to retain, under the circumstances and at the time
18    which has been agreed upon or is required by law or, in the
19    absence of a fixed time, upon demand of the person entitled
20    to such accounting and delivery;
21        (7) Failure to disburse funds in accordance with
22    agreements;
23        (8) Any misuse, misapplication, or misappropriation of
24    trust funds or escrow funds;
25        (9) Having a license, or the equivalent, to practice
26    any profession or occupation revoked, suspended, or

 

 

09900HB3369ham001- 12 -LRB099 10087 MGM 32653 a

1    otherwise acted against, including the denial of licensure
2    by a licensing authority of this State or another state,
3    territory or country for fraud, dishonest dealing or any
4    other act of moral turpitude;
5        (10) Failure to issue a satisfaction of mortgage when
6    the residential mortgage has been executed and proceeds
7    were not disbursed to the benefit of the mortgagor and when
8    the mortgagor has fully paid licensee's costs and
9    commission;
10        (11) Failure to comply with any order of the
11    Commissioner or rule made or issued under the provisions of
12    this Act;
13        (12) Engaging in activities regulated by this Act
14    without a current, active license unless specifically
15    exempted by this Act;
16        (13) Failure to pay in a timely manner any fee, charge
17    or fine under this Act;
18        (14) Failure to maintain, preserve, and keep available
19    for examination, all books, accounts or other documents
20    required by the provisions of this Act and the rules of the
21    Commissioner;
22        (15) Refusing, obstructing, evading, or unreasonably
23    delaying an investigation, information request, or
24    examination authorized under this Act, or refusing,
25    obstructing, evading, or unreasonably delaying compliance
26    with the Director's subpoena or subpoena duces tecum;

 

 

09900HB3369ham001- 13 -LRB099 10087 MGM 32653 a

1        (16) A pattern of substantially underestimating the
2    maximum closing costs;
3        (17) Failure to comply with or violation of any
4    provision of this Act;
5        (18) Failure to comply with or violation of any
6    provision of Article 3 of the Residential Real Property
7    Disclosure Act.
8    (j) A licensee shall be subject to the disciplinary actions
9specified in this Act for violations of subsection (i) by any
10officer, director, shareholder, joint venture, partner,
11ultimate equitable owner, or employee of the licensee.
12    (k) Such licensee shall be subject to suspension or
13revocation for unauthorized employee actions only if there is a
14pattern of repeated violations by employees or the licensee has
15knowledge of the violations, or there is substantial harm to a
16consumer.
17    (l) Procedure for surrender of license:
18        (1) The Commissioner may, after 10 days notice by
19    certified mail to the licensee at the address set forth on
20    the license, stating the contemplated action and in general
21    the grounds therefor and the date, time and place of a
22    hearing thereon, and after providing the licensee with a
23    reasonable opportunity to be heard prior to such action,
24    fine such licensee an amount not exceeding $25,000 per
25    violation, or revoke or suspend any license issued
26    hereunder if he or she finds that:

 

 

09900HB3369ham001- 14 -LRB099 10087 MGM 32653 a

1            (i) The licensee has failed to comply with any
2        provision of this Act or any order, decision, finding,
3        rule, regulation or direction of the Commissioner
4        lawfully made pursuant to the authority of this Act; or
5            (ii) Any fact or condition exists which, if it had
6        existed at the time of the original application for the
7        license, clearly would have warranted the Commissioner
8        in refusing to issue the license.
9        (2) Any licensee may submit application to surrender a
10    license, but upon the Director approving the surrender, it
11    shall not affect the licensee's civil or criminal liability
12    for acts committed prior to surrender or entitle the
13    licensee to a return of any part of the license fee.
14(Source: P.A. 96-112, eff. 7-31-09; 97-891, eff. 8-3-12.)
 
15    (205 ILCS 635/4-8)  (from Ch. 17, par. 2324-8)
16    Sec. 4-8. Delinquency Default rate; examination.
17    (a) The Commissioner shall obtain from the U.S. Department
18of Housing and Urban Development on a semi-annual basis that
19Department's loan delinquency data default claim rates for
20endorsements issued by that Department.
21    (b) The Commissioner shall conduct as part of an
22examination of each licensee a review of the licensee's loan
23delinquency data having a default rate equal to or greater than
245%.
25    This subsection shall not be construed as a limitation of

 

 

09900HB3369ham001- 15 -LRB099 10087 MGM 32653 a

1the Commissioner's examination authority under Section 4-2 of
2this Act or as otherwise provided in this Act. The Commissioner
3may require a licensee to provide loan delinquency default data
4as the Commissioner deems necessary for the proper enforcement
5of the Act.
6    (c) The purpose of the examination under subsection (b)
7shall be to determine whether the loan delinquency data default
8rate of the licensee has resulted from practices which deviate
9from sound and accepted mortgage underwriting practices,
10including but not limited to credit fraud, appraisal fraud and
11property inspection fraud. For the purpose of conducting this
12examination, the Commissioner may accept materials prepared
13for the U.S. Department of Housing and Urban Development. At
14the conclusion of the examination, the Commissioner shall make
15his or her findings available to the Residential Mortgage
16Board.
17    (d) The Commissioner, at his or her discretion, may hold
18public hearings, or at the direction of the Residential
19Mortgage Board, shall hold public hearings. Such testimony
20shall be by a homeowner or mortgagor or his agent, whose
21residential interest is affected by the activities of the
22residential mortgage licensee subject to such hearing. At such
23public hearing, a witness may present testimony on his or her
24behalf concerning only his or her home, or home mortgage or a
25witness may authorize a third party to appear on his or her
26behalf. The testimony shall be restricted to information and

 

 

09900HB3369ham001- 16 -LRB099 10087 MGM 32653 a

1comments related to a specific residence or specific
2residential mortgage application or applications for a
3residential mortgage or residential loan transaction. The
4testimony must be preceded by either a letter of complaint or a
5completed consumer complaint form prescribed by the
6Commissioner.
7    (e) The Commissioner shall, at the conclusion of the public
8hearings, release his or her findings and shall also make
9public any action taken with respect to the licensee. The
10Commissioner shall also give full consideration to the findings
11of this examination whenever reapplication is made by the
12licensee for a new license under this Act.
13    (f) A licensee that is examined pursuant to subsection (b)
14shall submit to the Commissioner a plan which shall be designed
15to reduce that licensee's loan delinquencies default rate to a
16figure that is less than 5%. The plan shall be implemented by
17the licensee as approved by the Commissioner. A licensee that
18is examined pursuant to subsection (b) shall report monthly,
19for a one year period, one, 2, and 3 month loan delinquencies
20defaults.
21    (g) Whenever the Commissioner finds that a licensee's loan
22delinquencies default rate on insured mortgages is unusually
23high within a particular geographic area, he or she shall
24require that licensee to submit such information as is
25necessary to determine whether that licensee's practices have
26constituted credit fraud, appraisal fraud or property

 

 

09900HB3369ham001- 17 -LRB099 10087 MGM 32653 a

1inspection fraud. The Commissioner shall promulgate such rules
2as are necessary to determine whether any licensee's loan
3delinquencies are default rate is unusually high within a
4particular area.
5(Source: P.A. 89-355, eff. 1-1-96; 89-626, eff. 8-9-96; 90-301,
6eff. 8-1-97.)".