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1 | AN ACT concerning regulation.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Residential Mortgage License Act of 1987 is | ||||||||||||||||||||||||||||||||
5 | amended by changing Sections 2-2, 2-4, 4-8.3, and 5-9 as | ||||||||||||||||||||||||||||||||
6 | follows:
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7 | (205 ILCS 635/2-2)
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8 | Sec. 2-2. Application process; investigation; fee.
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9 | (a) The Secretary shall issue a license upon completion of | ||||||||||||||||||||||||||||||||
10 | all of the
following:
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11 | (1) The filing of an application for license with the | ||||||||||||||||||||||||||||||||
12 | Director or the Nationwide Mortgage Licensing System and | ||||||||||||||||||||||||||||||||
13 | Registry as approved by the Director.
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14 | (2) The filing with the Secretary of a listing of | ||||||||||||||||||||||||||||||||
15 | judgments entered
against, and bankruptcy petitions by, | ||||||||||||||||||||||||||||||||
16 | the license applicant for the
preceding 10 years.
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17 | (3) The payment, in certified funds, of
investigation | ||||||||||||||||||||||||||||||||
18 | and application fees, the total of which shall be in an
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19 | amount equal to $2,700 annually.
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20 | (4) Except for a broker applying to renew a license, | ||||||||||||||||||||||||||||||||
21 | the filing of an
audited balance sheet including all | ||||||||||||||||||||||||||||||||
22 | footnotes prepared by a certified public
accountant in | ||||||||||||||||||||||||||||||||
23 | accordance with generally accepted accounting principles |
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1 | and
generally accepted auditing standards which evidences | ||||||
2 | that the applicant meets
the net worth requirements of | ||||||
3 | Section 3-5. Notwithstanding the requirements of this | ||||||
4 | subsection, an applicant that is a subsidiary may submit | ||||||
5 | audited consolidated financial statements of its parent, | ||||||
6 | intermediary parent, or ultimate parent as long as the | ||||||
7 | consolidated statements are supported by consolidating | ||||||
8 | statements which include the applicant's financial | ||||||
9 | statement. If the consolidating statements are unaudited, | ||||||
10 | the applicant's chief financial officer shall attest to the | ||||||
11 | applicant's financial statements disclosed in the | ||||||
12 | consolidating statements.
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13 | (5) The filing of proof satisfactory to the Secretary | ||||||
14 | Commissioner that the
applicant, the members thereof if the | ||||||
15 | applicant is a partnership or
association, the members or | ||||||
16 | managers thereof that retain any authority or
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17 | responsibility under the operating agreement if the | ||||||
18 | applicant is a limited
liability company, or the officers | ||||||
19 | thereof if the applicant
is a corporation have 3 years | ||||||
20 | experience preceding application
in real estate finance. | ||||||
21 | Instead of this requirement, the applicant and the
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22 | applicant's officers or members, as applicable, may
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23 | satisfactorily complete a program of education in real | ||||||
24 | estate finance and
fair lending, as
approved by the | ||||||
25 | Secretary Commissioner , prior to receiving the
initial | ||||||
26 | license.
The Secretary Commissioner shall adopt promulgate |
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1 | rules regarding proof of experience
requirements and | ||||||
2 | educational requirements and the satisfactory completion | ||||||
3 | of
those requirements. The Secretary Commissioner may | ||||||
4 | establish by rule a list of duly
licensed professionals and | ||||||
5 | others who may be exempt from this requirement.
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6 | (6) An investigation of the application averments | ||||||
7 | required by Section 2-4 , which
investigation must allow the | ||||||
8 | Secretary Commissioner to issue positive findings stating
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9 | that the financial responsibility, experience, character, | ||||||
10 | and general fitness
of the license applicant and of the | ||||||
11 | members thereof if the license applicant is
a partnership | ||||||
12 | or association, of the officers and directors thereof if | ||||||
13 | the
license applicant is a corporation, and of the managers | ||||||
14 | and members that retain
any authority or responsibility | ||||||
15 | under the operating agreement if the license
applicant is a | ||||||
16 | limited liability company are such as to command the | ||||||
17 | confidence
of the community and to warrant belief that the | ||||||
18 | business will be operated
honestly, fairly and efficiently | ||||||
19 | within the purpose of this Act. If the Secretary
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20 | Commissioner shall not so find, he or she shall not issue | ||||||
21 | such license, and he
or she shall notify the license | ||||||
22 | applicant of the denial. | ||||||
23 | The Secretary Commissioner may impose conditions on a | ||||||
24 | license if the Secretary Commissioner determines that the | ||||||
25 | conditions are necessary or appropriate. These conditions | ||||||
26 | shall be imposed in writing and shall continue in effect for |
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1 | the period prescribed by the Secretary Commissioner .
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2 | (b) All licenses shall be issued to the license applicant.
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3 | Upon receipt of such license, a residential mortgage | ||||||
4 | licensee shall be
authorized to engage in the business | ||||||
5 | regulated by this Act. Such license
shall remain in full force | ||||||
6 | and effect until it expires without renewal, is
surrendered by | ||||||
7 | the licensee or revoked or suspended as hereinafter provided.
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8 | (Source: P.A. 98-1081, eff. 1-1-15; 99-15, eff. 1-1-16 .)
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9 | (205 ILCS 635/2-4) (from Ch. 17, par. 2322-4)
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10 | Sec. 2-4. Prohibited acts and practices for licensees. | ||||||
11 | Averments of Licensee. It is a violation of this Act for a | ||||||
12 | licensee subject to this Act to Each application for license | ||||||
13 | shall be accompanied by the following averments stating
that | ||||||
14 | the applicant :
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15 | (a) fail to Will maintain at least one full service | ||||||
16 | office within the
State of Illinois if required to do so | ||||||
17 | pursuant to Section 3-4 of this Act;
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18 | (b) fail to Will maintain staff reasonably adequate to | ||||||
19 | meet the requirements of
Section 3-4 of this Act;
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20 | (c) fail to Will keep and maintain for 36 months the | ||||||
21 | same written records
as required by the federal Equal | ||||||
22 | Credit Opportunity Act, and any other
information required | ||||||
23 | by regulations of the Secretary Commissioner regarding any | ||||||
24 | home
mortgage in the course of the conduct of its | ||||||
25 | residential mortgage business;
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1 | (d) fail to Will file with the Secretary Commissioner | ||||||
2 | or Nationwide Mortgage Licensing System and Registry as | ||||||
3 | applicable, when due, any report or reports
which it is | ||||||
4 | required to file under any of the provisions of this Act;
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5 | (e) engage Will not engage , whether as principal or | ||||||
6 | agent, in the practice of
rejecting residential mortgage | ||||||
7 | applications without reasonable cause, or
varying terms or | ||||||
8 | application procedures without reasonable cause, for home
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9 | mortgages on real estate within any specific geographic | ||||||
10 | area from the terms
or procedures generally provided by the | ||||||
11 | licensee within other geographic
areas of the State;
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12 | (f) engage Will not engage in fraudulent home mortgage | ||||||
13 | underwriting practices;
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14 | (g) make Will not make payment, whether directly or | ||||||
15 | indirectly, of any kind
to any in house or fee appraiser of | ||||||
16 | any government or private money lending
agency with which | ||||||
17 | an application for a home mortgage has been filed for the
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18 | purpose of influencing the independent judgment of the | ||||||
19 | appraiser with respect
to the value of any real estate | ||||||
20 | which is to be covered by such home mortgage;
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21 | (h) fail to file Has filed tax returns (State and | ||||||
22 | Federal) for the past 3
years or filed with the Secretary | ||||||
23 | Commissioner an accountant's or attorney's
statement as to | ||||||
24 | why no return was filed;
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25 | (i) engage Will not engage in any discrimination or | ||||||
26 | redlining activities
prohibited by Section 3-8 of this Act;
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1 | (j) knowingly Will not knowingly make any false | ||||||
2 | promises likely to influence or
persuade, or pursue a | ||||||
3 | course of misrepresentation and false promises
through | ||||||
4 | agents, solicitors, advertising or otherwise;
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5 | (k) knowingly Will not knowingly misrepresent, | ||||||
6 | circumvent or conceal, through
whatever subterfuge or | ||||||
7 | device, any of the material particulars or the
nature | ||||||
8 | thereof, regarding a transaction to which it is a party to | ||||||
9 | the
injury of another party thereto;
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10 | (l) fail to Will disburse funds in accordance with its | ||||||
11 | agreements;
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12 | (m) commit Has not committed a crime against the law of | ||||||
13 | this State, any other
state or of the United States, | ||||||
14 | involving moral turpitude, fraudulent or
dishonest | ||||||
15 | dealing, and that no final judgment has been entered | ||||||
16 | against it in
a civil action upon grounds of fraud, | ||||||
17 | misrepresentation or deceit which has
not been previously | ||||||
18 | reported to the Secretary Commissioner ;
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19 | (n) fail to Will account or deliver to the owner upon | ||||||
20 | request any personal property such as
money, fund, deposit, | ||||||
21 | check, draft, mortgage, other document or thing of
value | ||||||
22 | which it is not in law or equity entitled to retain under | ||||||
23 | the
circumstances;
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24 | (o) engage Has not engaged in any conduct which would | ||||||
25 | be cause for denial of a
license;
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26 | (p) become Has not become insolvent;
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1 | (q) submit Has not submitted an application for a | ||||||
2 | license under this Act which
contains a material | ||||||
3 | misstatement;
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4 | (r) demonstrate Has not demonstrated by course of | ||||||
5 | conduct, negligence or incompetence
in performing any act | ||||||
6 | for which it is required to hold a license under this
Act;
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7 | (s) fail to Will advise the Secretary Commissioner in | ||||||
8 | writing, or the Nationwide Mortgage Licensing System and | ||||||
9 | Registry , as applicable, of any changes to the
information | ||||||
10 | submitted on the most recent application for license or | ||||||
11 | averments of record within 30
days of said change. The | ||||||
12 | written notice must be signed in the same form as
the | ||||||
13 | application for license being amended;
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14 | (t) fail to Will comply with the provisions of this | ||||||
15 | Act, or with any lawful
order, rule or regulation made or | ||||||
16 | issued under the provisions of this Act;
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17 | (u) fail to Will submit to periodic examination by the | ||||||
18 | Secretary Commissioner as required
by this Act;
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19 | (v) fail to Will advise the Secretary Commissioner in | ||||||
20 | writing of judgments entered
against, and bankruptcy | ||||||
21 | petitions by, the license applicant within 5
days of | ||||||
22 | occurrence;
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23 | (w) fail to Will advise the Secretary Commissioner in | ||||||
24 | writing within 30 days of any request made to a licensee | ||||||
25 | under this Act to repurchase a loan in a manner that | ||||||
26 | completely and clearly identifies to whom the request was |
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1 | made, the loans involved, and the reason therefor;
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2 | (x) fail to Will advise the Secretary Commissioner in | ||||||
3 | writing within 30 days of any request from any entity to | ||||||
4 | repurchase a loan in a manner that completely and clearly | ||||||
5 | identifies to whom the request was made, the loans | ||||||
6 | involved, and the reason for the request;
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7 | (y) fail to Will at all times act in a manner | ||||||
8 | consistent with subsections (a) and
(b) of Section 1-2 of | ||||||
9 | this Act;
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10 | (z) knowingly Will not knowingly hire or employ a loan | ||||||
11 | originator who is
not registered, or mortgage loan | ||||||
12 | originator who is not licensed , with the Secretary | ||||||
13 | Commissioner as required under Section 7-1 or Section 7-1A , | ||||||
14 | as applicable, of this Act;
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15 | (aa) charge Will not charge or collect advance payments | ||||||
16 | from borrowers or homeowners for engaging in loan | ||||||
17 | modification; or and | ||||||
18 | (bb) structure Will not structure activities or | ||||||
19 | contracts to evade provisions of this Act. | ||||||
20 | A licensee who fails to fulfill obligations of an averment, | ||||||
21 | to comply with this Section
averments made, or otherwise | ||||||
22 | violates any of the provisions of averments made under this
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23 | Section shall be subject to the penalties in Section 4-5 of | ||||||
24 | this Act.
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25 | (Source: P.A. 97-891, eff. 8-3-12; 98-1081, eff. 1-1-15 .)
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1 | (205 ILCS 635/4-8.3) | ||||||
2 | Sec. 4-8.3. Annual report of mortgage brokerage and | ||||||
3 | servicing activity . On or before March 1 of each year or the | ||||||
4 | date selected for Mortgage Call Reports under Section 4-9.1 of | ||||||
5 | this Act, each licensee shall file a report with the Secretary | ||||||
6 | Commissioner that discloses shall disclose such information as | ||||||
7 | the Secretary Commissioner requires. A licensee filing a | ||||||
8 | Mortgage Call Report is not required to file an annual report. | ||||||
9 | Exempt entities as defined in subsection (d) of Section 1-4 | ||||||
10 | shall not file the annual report of mortgage and servicing | ||||||
11 | activity required by this Section.
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12 | (Source: P.A. 96-112, eff. 7-31-09.) | ||||||
13 | (205 ILCS 635/5-9) | ||||||
14 | Sec. 5-9. Notice of change in loan terms. | ||||||
15 | (a) No licensee may fail to do either of the following: | ||||||
16 | (1) Provide timely notice to the borrower of any | ||||||
17 | material change in the terms of the residential mortgage | ||||||
18 | loan prior to the closing of the loan. For purposes of this | ||||||
19 | Section, a "material change means" any of the following: | ||||||
20 | (A) A change in the type of loan being offered, | ||||||
21 | such as a fixed or variable rate loan or a loan with a | ||||||
22 | balloon payment. | ||||||
23 | (B) A change in the term of the loan, as reflected | ||||||
24 | in the number of monthly payments due before a final | ||||||
25 | payment is scheduled to be made. |
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1 | (C) An increase in the interest rate of more than | ||||||
2 | 0.15%, or an equivalent
increase in the amount of | ||||||
3 | discount points charged. | ||||||
4 | (D) An increase in the regular monthly payment of | ||||||
5 | principal and interest of more than 5%. | ||||||
6 | (E) A change regarding the requirement or amount of | ||||||
7 | escrow of taxes or insurance. | ||||||
8 | (F) A change regarding the requirement or payment, | ||||||
9 | or both, of private mortgage insurance. | ||||||
10 | (2) Timely inform the borrower if any fees payable by | ||||||
11 | the borrower to the licensee increase by more than 10% or | ||||||
12 | $100, whichever is greater. | ||||||
13 | (b) The disclosures required by this Section shall be | ||||||
14 | deemed timely if the licensee provides the borrower with the | ||||||
15 | revised information not later than 3 days after learning of the | ||||||
16 | change or 24 hours before the residential mortgage loan is | ||||||
17 | closed, whichever is earlier. If the licensee discloses a | ||||||
18 | material change more than the 3 days after learning of the | ||||||
19 | change but still 24 hours before the residential mortgage loan | ||||||
20 | is closed, it will not be liable for penalties or forfeitures | ||||||
21 | if the licensee cures in time for the borrower to avoid any | ||||||
22 | damage. | ||||||
23 | (c) If an increase in the total amount of the fee to be | ||||||
24 | paid by the borrower to the broker is not disclosed in | ||||||
25 | accordance with this Section, the broker shall refund to the | ||||||
26 | borrower the amount by which the fee was increased. If the fee |
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1 | is financed into the residential mortgage loan, the broker | ||||||
2 | shall also refund to the borrower the interest charged to | ||||||
3 | finance the fee. | ||||||
4 | (d) The requirements of this Section do not apply to a | ||||||
5 | licensee providing a notice of change in loan terms pursuant to | ||||||
6 | the federal Consumer Financial Protection Bureau's Know Before | ||||||
7 | You Owe mortgage disclosure procedure pursuant to the federal | ||||||
8 | Truth in Lending Act and amendments promulgated under 12 CFR | ||||||
9 | 1026 and the federal Real Estate Settlement Procedures Act and | ||||||
10 | amendments promulgated under 12 CFR 1024. Licensees limited to | ||||||
11 | soliciting residential mortgage loan applications as approved | ||||||
12 | by the Director under Title 38, Section 1050.2115(c)(1) of the | ||||||
13 | Illinois Administrative Code are not required to provide the | ||||||
14 | disclosures under this Section as long as the solicitor does | ||||||
15 | not discuss the terms and conditions with the potential | ||||||
16 | borrower.
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17 | (Source: P.A. 95-691, eff. 6-1-08 .)
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18 | (205 ILCS 635/4-8 rep.)
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19 | Section 10. The Residential Mortgage License Act of 1987 is | ||||||
20 | amended by repealing Section 4-8.
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21 | Section 99. Effective date. This Act takes effect upon | ||||||
22 | becoming law.
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