100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB0527

 

Introduced , by Rep. Margo McDermed

 

SYNOPSIS AS INTRODUCED:
 
205 ILCS 635/1-3  from Ch. 17, par. 2321-3
205 ILCS 635/1-4

    Amends the Residential Mortgage License Act of 1987. Provides that an entity engaged solely in independent loan processing or underwriting is exempted from certain licensing requirements. Provides that those entities engaged solely in independent loan processing or underwriting shall submit an annual application for registration as an exempt entity with the Department of Financial and Professional Regulation through the Nationwide Mortgage Licensing System and Registry and comply with specific requirements. Adds those entities to the definition of "exempt person or entity". Excludes independent loan processing or underwriting from the definition of "soliciting, processing, placing, or negotiating a residential mortgage loan", "loan brokering", "brokering", or "brokerage services". Excludes independent loan processing or underwriting from the definition of "originating". Defines "independent loan processing or underwriting". Effective immediately.


LRB100 06709 SMS 16750 b

 

 

A BILL FOR

 

HB0527LRB100 06709 SMS 16750 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Residential Mortgage License Act of 1987 is
5amended by changing Sections 1-3 and 1-4 as follows:
 
6    (205 ILCS 635/1-3)  (from Ch. 17, par. 2321-3)
7    Sec. 1-3. Necessity for license; scope of Act.
8    (a) No person, partnership, association, corporation or
9other entity shall engage in the business of brokering,
10funding, originating, servicing or purchasing of residential
11mortgage loans without first obtaining a license from the
12Secretary in accordance with the licensing procedure provided
13in this Article I and such regulations as may be promulgated by
14the Secretary. The licensing provisions of this Section shall
15not apply to any entity engaged solely in commercial mortgage
16lending, any entity engaged solely in independent loan
17processing or underwriting, or to any person, partnership,
18association, corporation, or other entity exempted pursuant to
19Section 1-4, subsection (d), of this Act or in accordance with
20regulations promulgated by the Secretary hereunder. No
21provision of this Act shall apply to an exempt person or entity
22as defined in items (1) and (1.5) of subsection (d) of Section
231-4 of this Act. Notwithstanding anything to the contrary in

 

 

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1the preceding sentence, an individual acting as a mortgage loan
2originator who is not employed by and acting for an entity
3described in item (1) of subsection (tt) of Section 1-4 of this
4Act shall be subject to the mortgage loan originator licensing
5requirements of Article VII of this Act.
6    Effective January 1, 2011, no provision of this Act shall
7apply to an exempt person or entity as defined in item (1.8) of
8subsection (d) of Section 1-4 of this Act. Notwithstanding
9anything to the contrary in the preceding sentence, an
10individual acting as a mortgage loan originator who is not
11employed by and acting for an entity described in item (1) of
12subsection (tt) of Section 1-4 of this Act shall be subject to
13the mortgage loan originator licensing requirements of Article
14VII of this Act, and provided that an individual acting as a
15mortgage loan originator under item (1.8) of subsection (d) of
16Section 1-4 of this Act shall be further subject to a
17determination by the U.S. Department of Housing and Urban
18Development through final rulemaking or other authorized
19agency determination under the federal Secure and Fair
20Enforcement for Mortgage Licensing Act of 2008.
21    (a-1) A person who is exempt from licensure pursuant to
22paragraph (ii) of item (1) of subsection (d) of Section 1-4 of
23this Act as a federally chartered savings bank that is
24registered with the Nationwide Mortgage Licensing System and
25Registry may apply to the Secretary for an exempt company
26registration for the purpose of sponsoring one or more

 

 

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1individuals subject to the mortgage loan originator licensing
2requirements of Article VII of this Act. Registration with the
3Division of Banking of the Department shall not affect the
4exempt status of the applicant.
5        (1) A mortgage loan originator eligible for licensure
6    under this subsection shall (A) be covered under an
7    exclusive written contract with, and originate residential
8    mortgage loans solely on behalf of, that exempt person; and
9    (B) hold a current, valid insurance producer license under
10    Article XXXI of the Illinois Insurance Code.
11        (2) An exempt person shall: (A) fulfill any reporting
12    requirements required by the Nationwide Mortgage Licensing
13    System and Registry or the Secretary; (B) provide a blanket
14    surety bond pursuant to Section 7-12 of this Act covering
15    the activities of all its sponsored mortgage loan
16    originators; (C) reasonably supervise the activities of
17    all its sponsored mortgage loan originators; (D) comply
18    with all rules and orders (including the averments
19    contained in Section 2-4 of this Act as applicable to a
20    non-licensed exempt entity provided for in this Section)
21    that the Secretary deems necessary to ensure compliance
22    with the federal SAFE Act; and (E) pay an annual
23    registration fee established by the Director.
24        (3) The Secretary may deny an exempt company
25    registration to an exempt person or fine, suspend, or
26    revoke an exempt company registration if the Secretary

 

 

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1    finds one of the following:
2            (A) that the exempt person is not a person of
3        honesty, truthfulness, or good character;
4            (B) that the exempt person violated any applicable
5        law, rule, or order;
6            (C) that the exempt person refused or failed to
7        furnish, within a reasonable time, any information or
8        make any report that may be required by the Secretary;
9            (D) that the exempt person had a final judgment
10        entered against him or her in a civil action on grounds
11        of fraud, deceit, or misrepresentation, and the
12        conduct on which the judgment is based indicates that
13        it would be contrary to the interest of the public to
14        permit the exempt person to manage a loan originator;
15            (E) that the exempt person had an order entered
16        against him or her involving fraud, deceit, or
17        misrepresentation by an administrative agency of this
18        State, the federal government, or any other state or
19        territory of the United States, and the facts relating
20        to the order indicate that it would be contrary to the
21        interest of the public to permit the exempt person to
22        manage a loan originator;
23            (F) that the exempt person made a material
24        misstatement or suppressed or withheld information on
25        the application for an exempt company registration or
26        any document required to be filed with the Secretary;

 

 

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1        or
2            (G) that the exempt person violated Section 4-5 of
3        this Act.
4    (a-2) An entity engaged solely in independent loan
5processing or underwriting shall submit an annual application
6for registration as an exempt entity with the Department
7through the Nationwide Mortgage Licensing System and Registry
8and shall comply with the requirements of the federal Secure
9and Fair Enforcement for Mortgage Licensing Act of 2008, 12 CFR
10Part 1008, and those requirements as established by the
11Director under this Act, including, but not limited to, having
12fidelity commercial crime insurance in the amount of $50,000.
13    (b) No person, partnership, association, corporation, or
14other entity except a licensee under this Act or an entity
15exempt from licensing pursuant to Section 1-4, subsection (d),
16of this Act shall do any business under any name or title, or
17circulate or use any advertising or make any representation or
18give any information to any person, which indicates or
19reasonably implies activity within the scope of this Act.
20    (c) The Secretary may, through the Attorney General,
21request the circuit court of either Cook or Sangamon County to
22issue an injunction to restrain any person from violating or
23continuing to violate any of the foregoing provisions of this
24Section.
25    (d) When the Secretary has reasonable cause to believe that
26any entity which has not submitted an application for licensure

 

 

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1is conducting any of the activities described in subsection (a)
2hereof, the Secretary shall have the power to examine all books
3and records of the entity and any additional documentation
4necessary in order to determine whether such entity should
5become licensed under this Act.
6    (d-1) The Secretary may issue orders against any person if
7the Secretary has reasonable cause to believe that an unsafe,
8unsound, or unlawful practice has occurred, is occurring, or is
9about to occur, if any person has violated, is violating, or is
10about to violate any law, rule, or written agreement with the
11Secretary, or for the purposes of administering the provisions
12of this Act and any rule adopted in accordance with this Act.
13    (e) Any person, partnership, association, corporation or
14other entity who violates any provision of this Section commits
15a business offense and shall be fined an amount not to exceed
16$25,000. A mortgage loan brokered, funded, originated,
17serviced, or purchased by a party who is not licensed under
18this Section shall not be held to be invalid solely on the
19basis of a violation under this Section. The changes made to
20this Section by this amendatory Act of the 99th General
21Assembly are declarative of existing law.
22    (f) Each person, partnership, association, corporation or
23other entity conducting activities regulated by this Act shall
24be issued one license. Each office, place of business or
25location at which a residential mortgage licensee conducts any
26part of his or her business must be recorded with the Secretary

 

 

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1pursuant to Section 2-8 of this Act.
2    (g) Licensees under this Act shall solicit, broker, fund,
3originate, service and purchase residential mortgage loans
4only in conformity with the provisions of this Act and such
5rules and regulations as may be promulgated by the Secretary.
6    (h) This Act applies to all entities doing business in
7Illinois as residential mortgage bankers, as defined by "An Act
8to provide for the regulation of mortgage bankers", approved
9September 15, 1977, as amended, regardless of whether licensed
10under that or any prior Act. Any existing residential mortgage
11lender or residential mortgage broker in Illinois whether or
12not previously licensed, must operate in accordance with this
13Act.
14    (i) This Act is a successor Act to and a continuance of the
15regulation of residential mortgage bankers provided in, "An Act
16to provide for the regulation of mortgage bankers", approved
17September 15, 1977, as amended.
18    Entities and persons subject to the predecessor Act shall
19be subject to this Act from and after its effective date.
20(Source: P.A. 98-492, eff. 8-16-13; 99-113, eff. 7-23-15.)
 
21    (205 ILCS 635/1-4)
22    Sec. 1-4. Definitions. The following words and phrases have
23the meanings given to them in this Section:
24        (a) "Residential real property" or "residential real
25    estate" shall mean any real property located in Illinois,

 

 

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1    upon which is constructed or intended to be constructed a
2    dwelling. Those terms include a manufactured home as
3    defined in subdivision (53) of Section 9-102 of the Uniform
4    Commercial Code which is real property as defined in
5    Section 5-35 of the Conveyance and Encumbrance of
6    Manufactured Homes as Real Property and Severance Act.
7        (b) "Making a residential mortgage loan" or "funding a
8    residential mortgage loan" shall mean for compensation or
9    gain, either directly or indirectly, advancing funds or
10    making a commitment to advance funds to a loan applicant
11    for a residential mortgage loan.
12        (c) "Soliciting, processing, placing, or negotiating a
13    residential mortgage loan", with the exception of
14    independent loan processing or underwriting as contained
15    in Section 1-3, shall mean for compensation or gain, either
16    directly or indirectly, accepting or offering to accept an
17    application for a residential mortgage loan, assisting or
18    offering to assist in the processing of an application for
19    a residential mortgage loan on behalf of a borrower, or
20    negotiating or offering to negotiate the terms or
21    conditions of a residential mortgage loan with a lender on
22    behalf of a borrower including, but not limited to, the
23    submission of credit packages for the approval of lenders,
24    the preparation of residential mortgage loan closing
25    documents, including a closing in the name of a broker.
26        (d) "Exempt person or entity" shall mean the following:

 

 

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1            (1) (i) Any banking organization or foreign
2        banking corporation licensed by the Illinois
3        Commissioner of Banks and Real Estate or the United
4        States Comptroller of the Currency to transact
5        business in this State; (ii) any national bank,
6        federally chartered savings and loan association,
7        federal savings bank, federal credit union; (iii)
8        (blank); (iv) any bank, savings and loan association,
9        savings bank, or credit union organized under the laws
10        of this or any other state; (v) any Illinois Consumer
11        Installment Loan Act licensee; (vi) any insurance
12        company authorized to transact business in this State;
13        (vii) any entity engaged solely in commercial mortgage
14        lending or any entity engaged solely in independent
15        loan processing or underwriting; (viii) any service
16        corporation of a savings and loan association or
17        savings bank organized under the laws of this State or
18        the service corporation of a federally chartered
19        savings and loan association or savings bank having its
20        principal place of business in this State, other than a
21        service corporation licensed or entitled to
22        reciprocity under the Real Estate License Act of 2000;
23        or (ix) any first tier subsidiary of a bank, the
24        charter of which is issued under the Illinois Banking
25        Act by the Illinois Commissioner of Banks and Real
26        Estate, or the first tier subsidiary of a bank

 

 

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1        chartered by the United States Comptroller of the
2        Currency and that has its principal place of business
3        in this State, provided that the first tier subsidiary
4        is regularly examined by the Illinois Commissioner of
5        Banks and Real Estate or the Comptroller of the
6        Currency, or a consumer compliance examination is
7        regularly conducted by the Federal Reserve Board.
8            (1.5) Any employee of a person or entity mentioned
9        in item (1) of this subsection, when acting for such
10        person or entity, or any registered mortgage loan
11        originator when acting for an entity described in
12        subsection (tt) of this Section.
13            (1.8) Any person or entity that does not originate
14        mortgage loans in the ordinary course of business, but
15        makes or acquires residential mortgage loans with his
16        or her own funds for his or her or its own investment
17        without intent to make, acquire, or resell more than 3
18        residential mortgage loans in any one calendar year.
19            (2) (Blank).
20            (3) Any person employed by a licensee to assist in
21        the performance of the residential mortgage licensee's
22        activities regulated by this Act who is compensated in
23        any manner by only one licensee.
24            (4) (Blank).
25            (5) Any individual, corporation, partnership, or
26        other entity that originates, services, or brokers

 

 

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1        residential mortgage loans, as these activities are
2        defined in this Act, and who or which receives no
3        compensation for those activities, subject to the
4        Commissioner's regulations and the federal Secure and
5        Fair Enforcement for Mortgage Licensing Act of 2008 and
6        the rules promulgated under that Act with regard to the
7        nature and amount of compensation.
8            (6) (Blank).
9        (e) "Licensee" or "residential mortgage licensee"
10    shall mean a person, partnership, association,
11    corporation, or any other entity who or which is licensed
12    pursuant to this Act to engage in the activities regulated
13    by this Act.
14        (f) "Mortgage loan" "residential mortgage loan" or
15    "home mortgage loan" shall mean any loan primarily for
16    personal, family, or household use that is secured by a
17    mortgage, deed of trust, or other equivalent consensual
18    security interest on a dwelling as defined in Section
19    103(v) of the federal Truth in Lending Act, or residential
20    real estate upon which is constructed or intended to be
21    constructed a dwelling.
22        (g) "Lender" shall mean any person, partnership,
23    association, corporation, or any other entity who either
24    lends or invests money in residential mortgage loans.
25        (h) "Ultimate equitable owner" shall mean a person who,
26    directly or indirectly, owns or controls an ownership

 

 

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1    interest in a corporation, foreign corporation, alien
2    business organization, trust, or any other form of business
3    organization regardless of whether the person owns or
4    controls the ownership interest through one or more persons
5    or one or more proxies, powers of attorney, nominees,
6    corporations, associations, partnerships, trusts, joint
7    stock companies, or other entities or devices, or any
8    combination thereof.
9        (i) "Residential mortgage financing transaction" shall
10    mean the negotiation, acquisition, sale, or arrangement
11    for or the offer to negotiate, acquire, sell, or arrange
12    for, a residential mortgage loan or residential mortgage
13    loan commitment.
14        (j) "Personal residence address" shall mean a street
15    address and shall not include a post office box number.
16        (k) "Residential mortgage loan commitment" shall mean
17    a contract for residential mortgage loan financing.
18        (l) "Party to a residential mortgage financing
19    transaction" shall mean a borrower, lender, or loan broker
20    in a residential mortgage financing transaction.
21        (m) "Payments" shall mean payment of all or any of the
22    following: principal, interest and escrow reserves for
23    taxes, insurance and other related reserves, and
24    reimbursement for lender advances.
25        (n) "Commissioner" shall mean the Commissioner of
26    Banks and Real Estate, except that, beginning on April 6,

 

 

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1    2009 (the effective date of Public Act 95-1047), all
2    references in this Act to the Commissioner of Banks and
3    Real Estate are deemed, in appropriate contexts, to be
4    references to the Secretary of Financial and Professional
5    Regulation, or his or her designee, including the Director
6    of the Division of Banking of the Department of Financial
7    and Professional Regulation.
8        (n-1) "Director" shall mean the Director of the
9    Division of Banking of the Department of Financial and
10    Professional Regulation, except that, beginning on July
11    31, 2009 (the effective date of Public Act 96-112), all
12    references in this Act to the Director are deemed, in
13    appropriate contexts, to be the Secretary of Financial and
14    Professional Regulation, or his or her designee, including
15    the Director of the Division of Banking of the Department
16    of Financial and Professional Regulation.
17        (o) "Loan brokering", "brokering", or "brokerage
18    service" shall mean the act of helping to obtain from
19    another entity, for a borrower, a loan secured by
20    residential real estate situated in Illinois or assisting a
21    borrower in obtaining a loan secured by residential real
22    estate situated in Illinois in return for consideration to
23    be paid by either the borrower or the lender including, but
24    not limited to, contracting for the delivery of residential
25    mortgage loans to a third party lender and soliciting,
26    processing, placing, or negotiating residential mortgage

 

 

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1    loans, but does not include independent loan processing or
2    underwriting as defined in this Section.
3        (p) "Loan broker" or "broker" shall mean a person,
4    partnership, association, corporation, or limited
5    liability company, other than those persons, partnerships,
6    associations, corporations, or limited liability companies
7    exempted from licensing pursuant to Section 1-4,
8    subsection (d), of this Act, who performs the activities
9    described in subsections (c), (o), and (yy) of this
10    Section.
11        (q) "Servicing" shall mean the collection or
12    remittance for or the right or obligation to collect or
13    remit for any lender, noteowner, noteholder, or for a
14    licensee's own account, of payments, interests, principal,
15    and trust items such as hazard insurance and taxes on a
16    residential mortgage loan in accordance with the terms of
17    the residential mortgage loan; and includes loan payment
18    follow-up, delinquency loan follow-up, loan analysis and
19    any notifications to the borrower that are necessary to
20    enable the borrower to keep the loan current and in good
21    standing. "Servicing" includes management of third-party
22    entities acting on behalf of a residential mortgage
23    licensee for the collection of delinquent payments and the
24    use by such third-party entities of said licensee's
25    servicing records or information, including their use in
26    foreclosure.

 

 

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1        (r) "Full service office" shall mean an office,
2    provided by the licensee and not subleased from the
3    licensee's employees, and staff in Illinois reasonably
4    adequate to handle efficiently communications, questions,
5    and other matters relating to any application for, or an
6    existing home mortgage secured by residential real estate
7    situated in Illinois with respect to which the licensee is
8    brokering, funding originating, purchasing, or servicing.
9    The management and operation of each full service office
10    must include observance of good business practices such as
11    proper signage; adequate, organized, and accurate books
12    and records; ample phone lines, hours of business, staff
13    training and supervision, and provision for a mechanism to
14    resolve consumer inquiries, complaints, and problems. The
15    Commissioner shall issue regulations with regard to these
16    requirements and shall include an evaluation of compliance
17    with this Section in his or her periodic examination of
18    each licensee.
19        (s) "Purchasing" shall mean the purchase of
20    conventional or government-insured mortgage loans secured
21    by residential real estate situated in Illinois from either
22    the lender or from the secondary market.
23        (t) "Borrower" shall mean the person or persons who
24    seek the services of a loan broker, originator, or lender.
25        (u) "Originating" shall mean the issuing of
26    commitments for and funding of residential mortgage loans,

 

 

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1    but does not include independent loan processing or
2    underwriting as defined in this Section.
3        (v) "Loan brokerage agreement" shall mean a written
4    agreement in which a broker or loan broker agrees to do
5    either of the following:
6            (1) obtain a residential mortgage loan for the
7        borrower or assist the borrower in obtaining a
8        residential mortgage loan; or
9            (2) consider making a residential mortgage loan to
10        the borrower.
11        (w) "Advertisement" shall mean the attempt by
12    publication, dissemination, or circulation to induce,
13    directly or indirectly, any person to enter into a
14    residential mortgage loan agreement or residential
15    mortgage loan brokerage agreement relative to a mortgage
16    secured by residential real estate situated in Illinois.
17        (x) "Residential Mortgage Board" shall mean the
18    Residential Mortgage Board created in Section 1-5 of this
19    Act.
20        (y) "Government-insured mortgage loan" shall mean any
21    mortgage loan made on the security of residential real
22    estate insured by the Department of Housing and Urban
23    Development or Farmers Home Loan Administration, or
24    guaranteed by the Veterans Administration.
25        (z) "Annual audit" shall mean a certified audit of the
26    licensee's books and records and systems of internal

 

 

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1    control performed by a certified public accountant in
2    accordance with generally accepted accounting principles
3    and generally accepted auditing standards.
4        (aa) "Financial institution" shall mean a savings and
5    loan association, savings bank, credit union, or a bank
6    organized under the laws of Illinois or a savings and loan
7    association, savings bank, credit union or a bank organized
8    under the laws of the United States and headquartered in
9    Illinois.
10        (bb) "Escrow agent" shall mean a third party,
11    individual or entity charged with the fiduciary obligation
12    for holding escrow funds on a residential mortgage loan
13    pending final payout of those funds in accordance with the
14    terms of the residential mortgage loan.
15        (cc) "Net worth" shall have the meaning ascribed
16    thereto in Section 3-5 of this Act.
17        (dd) "Affiliate" shall mean:
18            (1) any entity that directly controls or is
19        controlled by the licensee and any other company that
20        is directly affecting activities regulated by this Act
21        that is controlled by the company that controls the
22        licensee;
23            (2) any entity:
24                (A) that is controlled, directly or
25            indirectly, by a trust or otherwise, by or for the
26            benefit of shareholders who beneficially or

 

 

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1            otherwise control, directly or indirectly, by
2            trust or otherwise, the licensee or any company
3            that controls the licensee; or
4                (B) a majority of the directors or trustees of
5            which constitute a majority of the persons holding
6            any such office with the licensee or any company
7            that controls the licensee;
8            (3) any company, including a real estate
9        investment trust, that is sponsored and advised on a
10        contractual basis by the licensee or any subsidiary or
11        affiliate of the licensee.
12        (ee) "First tier subsidiary" shall be defined by
13    regulation incorporating the comparable definitions used
14    by the Office of the Comptroller of the Currency and the
15    Illinois Commissioner of Banks and Real Estate.
16        (ff) "Gross delinquency rate" means the quotient
17    determined by dividing (1) the sum of (i) the number of
18    government-insured residential mortgage loans funded or
19    purchased by a licensee in the preceding calendar year that
20    are delinquent and (ii) the number of conventional
21    residential mortgage loans funded or purchased by the
22    licensee in the preceding calendar year that are delinquent
23    by (2) the sum of (i) the number of government-insured
24    residential mortgage loans funded or purchased by the
25    licensee in the preceding calendar year and (ii) the number
26    of conventional residential mortgage loans funded or

 

 

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1    purchased by the licensee in the preceding calendar year.
2        (gg) "Delinquency rate factor" means the factor set by
3    rule of the Commissioner that is multiplied by the average
4    gross delinquency rate of licensees, determined annually
5    for the immediately preceding calendar year, for the
6    purpose of determining which licensees shall be examined by
7    the Commissioner pursuant to subsection (b) of Section 4-8
8    of this Act.
9        (hh) "Loan originator" means any natural person who,
10    for compensation or in the expectation of compensation,
11    either directly or indirectly makes, offers to make,
12    solicits, places, or negotiates a residential mortgage
13    loan. This definition applies only to Section 7-1 of this
14    Act.
15        (ii) "Confidential supervisory information" means any
16    report of examination, visitation, or investigation
17    prepared by the Commissioner under this Act, any report of
18    examination visitation, or investigation prepared by the
19    state regulatory authority of another state that examines a
20    licensee, any document or record prepared or obtained in
21    connection with or relating to any examination,
22    visitation, or investigation, and any record prepared or
23    obtained by the Commissioner to the extent that the record
24    summarizes or contains information derived from any
25    report, document, or record described in this subsection.
26    "Confidential supervisory information" does not include

 

 

HB0527- 20 -LRB100 06709 SMS 16750 b

1    any information or record routinely prepared by a licensee
2    and maintained in the ordinary course of business or any
3    information or record that is required to be made publicly
4    available pursuant to State or federal law or rule.
5        (jj) "Mortgage loan originator" means an individual
6    who for compensation or gain or in the expectation of
7    compensation or gain:
8            (i) takes a residential mortgage loan application;
9        or
10            (ii) offers or negotiates terms of a residential
11        mortgage loan.
12        "Mortgage loan originator" includes an individual
13    engaged in loan modification activities as defined in
14    subsection (yy) of this Section. A mortgage loan originator
15    engaged in loan modification activities shall report those
16    activities to the Department of Financial and Professional
17    Regulation in the manner provided by the Department;
18    however, the Department shall not impose a fee for
19    reporting, nor require any additional qualifications to
20    engage in those activities beyond those provided pursuant
21    to this Act for mortgage loan originators.
22        "Mortgage loan originator" does not include an
23    individual engaged solely as a loan processor or
24    underwriter except as otherwise provided in subsection (d)
25    of Section 7-1A of this Act.
26        "Mortgage loan originator" does not include a person or

 

 

HB0527- 21 -LRB100 06709 SMS 16750 b

1    entity that only performs real estate brokerage activities
2    and is licensed in accordance with the Real Estate License
3    Act of 2000, unless the person or entity is compensated by
4    a lender, a mortgage broker, or other mortgage loan
5    originator, or by any agent of that lender, mortgage
6    broker, or other mortgage loan originator.
7        "Mortgage loan originator" does not include a person or
8    entity solely involved in extensions of credit relating to
9    timeshare plans, as that term is defined in Section
10    101(53D) of Title 11, United States Code.
11        (kk) "Depository institution" has the same meaning as
12    in Section 3 of the Federal Deposit Insurance Act, and
13    includes any credit union.
14        (ll) "Dwelling" means a residential structure or
15    mobile home which contains one to 4 family housing units,
16    or individual units of condominiums or cooperatives.
17        (mm) "Immediate family member" means a spouse, child,
18    sibling, parent, grandparent, or grandchild, and includes
19    step-parents, step-children, step-siblings, or adoptive
20    relationships.
21        (nn) "Individual" means a natural person.
22        (oo) "Loan processor or underwriter" means an
23    individual who performs clerical or support duties as an
24    employee at the direction of and subject to the supervision
25    and instruction of a person licensed, or exempt from
26    licensing, under this Act. "Clerical or support duties"

 

 

HB0527- 22 -LRB100 06709 SMS 16750 b

1    includes subsequent to the receipt of an application:
2            (i) the receipt, collection, distribution, and
3        analysis of information common for the processing or
4        underwriting of a residential mortgage loan; and
5            (ii) communicating with a consumer to obtain the
6        information necessary for the processing or
7        underwriting of a loan, to the extent that the
8        communication does not include offering or negotiating
9        loan rates or terms, or counseling consumers about
10        residential mortgage loan rates or terms. An
11        individual engaging solely in loan processor or
12        underwriter activities shall not represent to the
13        public, through advertising or other means of
14        communicating or providing information, including the
15        use of business cards, stationery, brochures, signs,
16        rate lists, or other promotional items, that the
17        individual can or will perform any of the activities of
18        a mortgage loan originator.
19        (pp) "Nationwide Mortgage Licensing System and
20    Registry" means a mortgage licensing system developed and
21    maintained by the Conference of State Bank Supervisors and
22    the American Association of Residential Mortgage
23    Regulators for the licensing and registration of licensed
24    mortgage loan originators.
25        (qq) "Nontraditional mortgage product" means any
26    mortgage product other than a 30-year fixed rate mortgage.

 

 

HB0527- 23 -LRB100 06709 SMS 16750 b

1        (rr) "Person" means a natural person, corporation,
2    company, limited liability company, partnership, or
3    association.
4        (ss) "Real estate brokerage activity" means any
5    activity that involves offering or providing real estate
6    brokerage services to the public, including:
7            (1) acting as a real estate agent or real estate
8        broker for a buyer, seller, lessor, or lessee of real
9        property;
10            (2) bringing together parties interested in the
11        sale, purchase, lease, rental, or exchange of real
12        property;
13            (3) negotiating, on behalf of any party, any
14        portion of a contract relating to the sale, purchase,
15        lease, rental, or exchange of real property, other than
16        in connection with providing financing with respect to
17        any such transaction;
18            (4) engaging in any activity for which a person
19        engaged in the activity is required to be registered or
20        licensed as a real estate agent or real estate broker
21        under any applicable law; or
22            (5) offering to engage in any activity, or act in
23        any capacity, described in this subsection (ss).
24        (tt) "Registered mortgage loan originator" means any
25    individual that:
26            (1) meets the definition of mortgage loan

 

 

HB0527- 24 -LRB100 06709 SMS 16750 b

1        originator and is an employee of:
2                (A) a depository institution;
3                (B) a subsidiary that is:
4                    (i) owned and controlled by a depository
5                institution; and
6                    (ii) regulated by a federal banking
7                agency; or
8                (C) an institution regulated by the Farm
9            Credit Administration; and
10            (2) is registered with, and maintains a unique
11        identifier through, the Nationwide Mortgage Licensing
12        System and Registry.
13        (uu) "Unique identifier" means a number or other
14    identifier assigned by protocols established by the
15    Nationwide Mortgage Licensing System and Registry.
16        (vv) "Residential mortgage license" means a license
17    issued pursuant to Section 1-3, 2-2, or 2-6 of this Act.
18        (ww) "Mortgage loan originator license" means a
19    license issued pursuant to Section 7-1A, 7-3, or 7-6 of
20    this Act.
21        (xx) "Secretary" means the Secretary of the Department
22    of Financial and Professional Regulation, or a person
23    authorized by the Secretary or by this Act to act in the
24    Secretary's stead.
25        (yy) "Loan modification" means, for compensation or
26    gain, either directly or indirectly offering or

 

 

HB0527- 25 -LRB100 06709 SMS 16750 b

1    negotiating on behalf of a borrower or homeowner to adjust
2    the terms of a residential mortgage loan in a manner not
3    provided for in the original or previously modified
4    mortgage loan.
5        (zz) "Short sale facilitation" means, for compensation
6    or gain, either directly or indirectly offering or
7    negotiating on behalf of a borrower or homeowner to
8    facilitate the sale of residential real estate subject to
9    one or more residential mortgage loans or debts
10    constituting liens on the property in which the proceeds
11    from selling the residential real estate will fall short of
12    the amount owed and the lien holders are contacted to agree
13    to release their lien on the residential real estate and
14    accept less than the full amount owed on the debt.
15        (aaa) "Independent loan processing or underwriting"
16    means the activity or activities of an entity engaged in
17    solely for the purpose of sponsoring a licensed mortgage
18    loan originator independent loan processor or a licensed
19    mortgage loan originator independent loan underwriter
20    pursuant to Section 7-1A of this Act.
21    The Commissioner may define by rule and regulation any
22terms used in this Act for the efficient and clear
23administration of this Act.
24(Source: P.A. 98-749, eff. 7-16-14; 98-1081, eff. 1-1-15;
2599-78, eff. 7-20-15.)
 
26    Section 99. Effective date. This Act takes effect upon

 

 

HB0527- 26 -LRB100 06709 SMS 16750 b

1becoming law.