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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 1-3 and 1-4 and by adding Section |
6 | | 3-11 as follows: |
7 | | (205 ILCS 635/1-3) (from Ch. 17, par. 2321-3) |
8 | | Sec. 1-3. Necessity for license; scope of Act. |
9 | | (a) No person, partnership, association, corporation or |
10 | | other entity
shall engage in the business of brokering, |
11 | | funding, originating, servicing
or purchasing of residential |
12 | | mortgage loans without first obtaining a
license from the |
13 | | Secretary in accordance with the licensing procedure
provided |
14 | | in this Article I and such regulations as may be promulgated by
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15 | | the Secretary. The licensing provisions of this Section shall |
16 | | not apply
to any entity engaged solely in commercial mortgage |
17 | | lending or
to any person, partnership association, corporation |
18 | | or other entity
exempted pursuant to Section 1-4, subsection |
19 | | (d), of this Act or in accordance
with regulations promulgated |
20 | | by the Secretary hereunder. No provision of this Act shall |
21 | | apply to an exempt person or entity as defined in items (1) and |
22 | | (1.5) of subsection (d) of Section 1-4 of this Act. |
23 | | Notwithstanding anything to the contrary in the preceding |
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1 | | sentence, an individual acting as a mortgage loan originator |
2 | | who is not employed by and acting for an entity described in |
3 | | item (1) of subsection (tt) of Section 1-4 of this Act shall be |
4 | | subject to the mortgage loan originator licensing requirements |
5 | | of Article VII of this Act. |
6 | | Effective January 1, 2011, no provision of this Act shall |
7 | | apply to an exempt person or entity as defined in item (1.8) of |
8 | | subsection (d) of Section 1-4 of this Act. Notwithstanding |
9 | | anything to the contrary in the preceding sentence, an |
10 | | individual acting as a mortgage loan originator who is not |
11 | | employed by and acting for an entity described in item (1) of |
12 | | subsection (tt) of Section 1-4 of this Act shall be subject to |
13 | | the mortgage loan originator licensing requirements of Article |
14 | | VII of this Act, and provided that an individual acting as a |
15 | | mortgage loan originator under item (1.8) of subsection (d) of |
16 | | Section 1-4 of this Act shall be further subject to a |
17 | | determination by the U.S. Department of Housing and Urban |
18 | | Development through final rulemaking or other authorized |
19 | | agency determination under the federal Secure and Fair |
20 | | Enforcement for Mortgage Licensing Act of 2008. |
21 | | (a-1) A person who is exempt from licensure pursuant to |
22 | | paragraph (ii) of item (1) of subsection (d) of Section 1-4 of |
23 | | this Act as a federally chartered savings bank that is |
24 | | registered with the Nationwide Multistate Licensing System and |
25 | | Registry may apply to the Secretary for an exempt company |
26 | | registration for the purpose of sponsoring one or more |
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1 | | individuals subject to the mortgage loan originator licensing |
2 | | requirements of Article VII of this Act. Registration with the |
3 | | Division of Banking of the Department shall not affect the |
4 | | exempt 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; |
9 | | and (B) hold a current, valid insurance producer license |
10 | | under Article XXXI of the Illinois Insurance Code. |
11 | | (2) An exempt person shall: (A) fulfill any reporting |
12 | | requirements required by the Nationwide Multistate |
13 | | Licensing System and Registry or the Secretary; (B) |
14 | | provide a blanket surety bond pursuant to Section 7-12 of |
15 | | this Act covering the activities of all its sponsored |
16 | | mortgage loan originators; (C) reasonably supervise the |
17 | | activities of all its sponsored mortgage loan originators; |
18 | | (D) comply with all rules and orders (including the |
19 | | averments contained in Section 2-4 of this Act as |
20 | | applicable to a non-licensed exempt entity provided for in |
21 | | this Section) that the Secretary deems necessary to ensure |
22 | | compliance with the federal SAFE Act; and (E) pay an |
23 | | annual 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-5) An entity that is exempt from licensure pursuant to |
5 | | item (7) of subsection (d) of Section 1-4 of this Act as an |
6 | | independent loan processing entity shall annually apply to the |
7 | | Secretary through the Nationwide Multistate Licensing System |
8 | | and Registry for an exempt company registration for the |
9 | | purpose of sponsoring one or more individuals subject to the |
10 | | mortgage loan originator licensing requirements of Article VII |
11 | | of this Act. A loan processor who performs clerical or support |
12 | | duties at the direction of and subject to the supervision and |
13 | | instruction of a licensed mortgage loan originator sponsored |
14 | | by an independent loan processing entity shall be exempt from |
15 | | his or her own licensing as a mortgage loan originator. An |
16 | | independent loan processing entity shall not be subject to |
17 | | examination by the Secretary. The Secretary may adopt rules to |
18 | | implement any provisions necessary for the administration of |
19 | | this subsection. |
20 | | (b) No person, partnership, association, corporation, or |
21 | | other entity
except a licensee under this Act or an entity |
22 | | exempt from licensing
pursuant to Section 1-4, subsection (d), |
23 | | of this Act shall do any business
under any name or title, or |
24 | | circulate or use any advertising or make any
representation or |
25 | | give any information to any person, which indicates or
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26 | | reasonably implies activity within the scope
of this Act. |
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1 | | (c) The Secretary may, through the Attorney General, |
2 | | request the circuit
court of either Cook or Sangamon County to |
3 | | issue an injunction to restrain
any person from violating or |
4 | | continuing to violate any of the foregoing
provisions of this |
5 | | Section. |
6 | | (d) When the Secretary has reasonable cause to believe |
7 | | that any
entity which has not submitted an application for |
8 | | licensure is conducting
any of the activities described in |
9 | | subsection (a) hereof, the Secretary
shall have the power to |
10 | | examine all books and records of the entity and any
additional |
11 | | documentation necessary in order to determine whether such
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12 | | entity should become licensed under this Act. |
13 | | (d-1) The Secretary may issue orders against any person if |
14 | | the Secretary has reasonable cause to believe that an unsafe, |
15 | | unsound, or unlawful practice has occurred, is occurring, or |
16 | | is about to occur, if any person has violated, is violating, or |
17 | | is about to violate any law, rule, or written agreement with |
18 | | the Secretary, or for the purposes of administering the |
19 | | provisions of this Act and any rule adopted in accordance with |
20 | | this Act.
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21 | | (e) Any person, partnership, association, corporation or |
22 | | other entity
who violates any provision of this Section |
23 | | commits a business offense and
shall be fined an amount not to |
24 | | exceed $25,000. A mortgage loan brokered, funded, originated, |
25 | | serviced, or purchased by a party who is not licensed under |
26 | | this Section shall not be held to be invalid solely on the |
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1 | | basis of a violation under this Section. The changes made to |
2 | | this Section by Public Act 99-113 are declarative of existing |
3 | | law. |
4 | | (f) Each person, partnership, association, corporation or |
5 | | other entity
conducting activities regulated by this Act shall |
6 | | be issued one license.
Each full service office , place of |
7 | | business or location at which a residential mortgage
licensee |
8 | | conducts any part of his or her business must
be recorded with |
9 | | the Secretary pursuant to Section 2-8 of this Act. |
10 | | (g) Licensees under this Act shall solicit, broker, fund, |
11 | | originate,
service and purchase residential mortgage loans |
12 | | only in conformity with the
provisions of this Act and such |
13 | | rules and regulations as may be promulgated
by the Secretary. |
14 | | (h) This Act applies to all entities doing business in |
15 | | Illinois as
residential mortgage bankers, as defined by "An |
16 | | Act to provide for the
regulation of mortgage bankers", |
17 | | approved September 15, 1977, as amended,
regardless of whether |
18 | | licensed under that or any prior Act. Any existing
residential |
19 | | mortgage lender or residential mortgage broker in Illinois
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20 | | whether or not previously licensed, must operate in accordance |
21 | | with this Act. |
22 | | (i) This Act is a successor Act to and a continuance of the |
23 | | regulation
of residential mortgage bankers provided in "An Act |
24 | | to provide for the
regulation of mortgage bankers", approved |
25 | | September 15, 1977, as amended. |
26 | | Entities and persons subject to the predecessor Act shall |
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1 | | be subject to
this Act from and after its effective date. |
2 | | (Source: P.A. 100-851, eff. 8-14-18; 100-1153, eff. 12-19-18; |
3 | | 101-81, eff. 7-12-19.) |
4 | | (205 ILCS 635/1-4) |
5 | | Sec. 1-4. Definitions. The following words and phrases |
6 | | have the meanings given to them in this Section: |
7 | | (a) "Residential real property" or "residential real |
8 | | estate" shall mean any real property located in Illinois, |
9 | | upon which is constructed or intended to be constructed a |
10 | | dwelling. Those terms include a manufactured home as |
11 | | defined in subdivision (53) of Section 9-102 of the |
12 | | Uniform Commercial Code which is real property as defined |
13 | | in Section 5-35 of the Conveyance and Encumbrance of |
14 | | Manufactured Homes as Real Property and Severance Act. |
15 | | (b) "Making a residential mortgage loan" or "funding a |
16 | | residential mortgage
loan" shall mean for compensation or |
17 | | gain, either directly or indirectly,
advancing funds or |
18 | | making a commitment to advance funds to a loan applicant
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19 | | for a residential mortgage loan. |
20 | | (c) "Soliciting, processing, placing, or negotiating a |
21 | | residential
mortgage loan" shall mean for compensation or |
22 | | gain, either directly or
indirectly, accepting or offering |
23 | | to accept an application for a
residential mortgage loan, |
24 | | assisting or offering to assist in the
processing of an |
25 | | application for a residential mortgage loan on behalf of a
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1 | | borrower, or negotiating or offering to negotiate the |
2 | | terms or conditions
of a residential mortgage loan with a |
3 | | lender on behalf of a borrower
including, but not limited |
4 | | to, the submission of credit packages for the
approval of |
5 | | lenders, the preparation of residential mortgage loan |
6 | | closing
documents, including a closing in the name of a |
7 | | broker. |
8 | | (d) "Exempt person or entity" shall mean the |
9 | | following: |
10 | | (1) (i) Any banking organization or foreign |
11 | | banking corporation
licensed by the Illinois |
12 | | Commissioner of Banks and Real Estate or the
United |
13 | | States Comptroller of the Currency to transact |
14 | | business in this
State; (ii) any national bank, |
15 | | federally chartered savings and loan
association, |
16 | | federal savings bank, federal credit union; (iii) |
17 | | (blank); (iv) any bank, savings and loan
association, |
18 | | savings bank, or credit union organized under the laws |
19 | | of this
or any other state; (v) any Illinois Consumer |
20 | | Installment Loan Act licensee;
(vi) any insurance |
21 | | company authorized to transact business in this State;
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22 | | (vii) any entity engaged solely in commercial mortgage |
23 | | lending; (viii) any
service corporation of a savings |
24 | | and loan association or savings bank organized
under |
25 | | the laws of this State or the service corporation of a |
26 | | federally
chartered savings and loan association or |
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1 | | savings bank having
its principal place of business in |
2 | | this State, other than a service
corporation licensed |
3 | | or entitled to reciprocity under the Real Estate
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4 | | License Act of 2000; or (ix) any first tier subsidiary |
5 | | of a
bank, the charter of which is issued under the |
6 | | Illinois Banking Act
by the Illinois Commissioner of |
7 | | Banks and Real Estate,
or the first tier subsidiary of |
8 | | a bank chartered by the United States
Comptroller of |
9 | | the Currency and that has its principal place of |
10 | | business
in this State, provided that the first tier |
11 | | subsidiary is regularly
examined by the Illinois |
12 | | Commissioner of Banks and Real Estate
or the |
13 | | Comptroller of the Currency, or a consumer compliance |
14 | | examination is
regularly conducted by the Federal |
15 | | Reserve Board. |
16 | | (1.5) Any employee of a person or entity mentioned |
17 | | in
item (1) of this subsection, when acting for such |
18 | | person or entity, or any registered mortgage loan |
19 | | originator when acting for an entity described in |
20 | | subsection (tt) of this Section. |
21 | | (1.8) Any person or entity that does not originate |
22 | | mortgage loans in the ordinary course of business, but |
23 | | makes or acquires residential mortgage loans with his |
24 | | or her own funds for his or her or its own investment |
25 | | without intent to make, acquire, or resell more than 3 |
26 | | residential mortgage loans in any one calendar year. |
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1 | | (2) (Blank). |
2 | | (2.1) A bona fide nonprofit organization. |
3 | | (2.2) An employee of a bona fide nonprofit |
4 | | organization when acting on behalf of that |
5 | | organization. |
6 | | (3) Any person employed by a licensee to assist in |
7 | | the performance of
the residential mortgage licensee's |
8 | | activities regulated by this Act who is compensated in |
9 | | any manner by
only one licensee. |
10 | | (4) (Blank). |
11 | | (5) Any individual, corporation, partnership, or |
12 | | other entity that
originates, services, or brokers |
13 | | residential mortgage loans, as these
activities are |
14 | | defined in this Act, and who or which receives no
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15 | | compensation for those activities, subject to the |
16 | | Commissioner's
regulations and the federal Secure and |
17 | | Fair Enforcement for Mortgage Licensing Act of 2008 |
18 | | and the rules promulgated under that Act with regard |
19 | | to the nature and amount of compensation. |
20 | | (6) (Blank). |
21 | | (7) Any entity engaged solely in providing loan |
22 | | processing services through the sponsoring of |
23 | | individuals acting pursuant to subsection (d) of |
24 | | Section 7-1A of this Act. |
25 | | (e) "Licensee" or "residential mortgage licensee" |
26 | | shall mean a person,
partnership, association, |
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1 | | corporation, or any other entity who or which is
licensed |
2 | | pursuant to this Act to engage in the activities regulated |
3 | | by
this Act. |
4 | | (f) "Mortgage loan" "residential mortgage loan" or |
5 | | "home
mortgage loan" shall mean any loan primarily for |
6 | | personal, family, or household use that is secured by a |
7 | | mortgage, deed of trust, or other equivalent consensual |
8 | | security interest on a dwelling as defined in Section |
9 | | 103(v) of the federal Truth in Lending Act, or residential |
10 | | real estate upon which is constructed or intended to be |
11 | | constructed a dwelling. |
12 | | (g) "Lender" shall mean any person, partnership, |
13 | | association,
corporation, or any other entity who either |
14 | | lends or invests money in
residential mortgage loans. |
15 | | (h) "Ultimate equitable owner" shall mean a person |
16 | | who, directly
or indirectly, owns or controls an ownership |
17 | | interest in a corporation,
foreign corporation, alien |
18 | | business organization, trust, or any other form
of |
19 | | business organization regardless of whether the person |
20 | | owns or controls
the ownership interest through one or |
21 | | more persons or one or more proxies,
powers of attorney, |
22 | | nominees, corporations, associations, partnerships,
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23 | | trusts, joint stock companies, or other entities or |
24 | | devices, or any
combination thereof. |
25 | | (i) "Residential mortgage financing transaction" shall |
26 | | mean the negotiation,
acquisition, sale, or arrangement |
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1 | | for or the offer to negotiate, acquire,
sell, or arrange |
2 | | for, a residential mortgage loan or residential mortgage
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3 | | loan commitment. |
4 | | (j) "Personal residence address" shall mean a street |
5 | | address and shall
not include a post office box number. |
6 | | (k) "Residential mortgage loan commitment" shall mean |
7 | | a contract for
residential mortgage loan financing. |
8 | | (l) "Party to a residential mortgage financing |
9 | | transaction" shall mean a
borrower, lender, or loan broker |
10 | | in a residential mortgage financing
transaction. |
11 | | (m) "Payments" shall mean payment of all or any of the |
12 | | following:
principal, interest and escrow reserves for |
13 | | taxes, insurance and other related
reserves, and |
14 | | reimbursement for lender advances. |
15 | | (n) "Commissioner" shall mean the Commissioner of |
16 | | Banks and Real Estate, except that, beginning on April 6, |
17 | | 2009 (the effective date of Public Act 95-1047), all |
18 | | references in this Act to the Commissioner of Banks and |
19 | | Real Estate are deemed, in appropriate contexts, to be |
20 | | references to the Secretary of Financial and Professional |
21 | | Regulation, or his or her designee, including the Director |
22 | | of the Division of Banking of the Department of Financial |
23 | | and Professional Regulation. |
24 | | (n-1) "Director" shall mean the Director of the |
25 | | Division of Banking of the Department of Financial and |
26 | | Professional Regulation, except that, beginning on July |
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1 | | 31, 2009 (the effective date of Public Act 96-112), all |
2 | | references in this Act to the Director are deemed, in |
3 | | appropriate contexts, to be the Secretary of Financial and |
4 | | Professional Regulation, or his or her designee, including |
5 | | the Director of the Division of Banking of the Department |
6 | | of Financial and Professional Regulation. |
7 | | (o) "Loan brokering", "brokering", or "brokerage |
8 | | service" shall mean the act
of helping to obtain from |
9 | | another entity, for a borrower, a loan secured by
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10 | | residential real estate situated in Illinois or assisting |
11 | | a borrower in
obtaining a loan secured by residential real |
12 | | estate situated in Illinois in
return for consideration to |
13 | | be paid by either the borrower or the lender
including, |
14 | | but not limited to, contracting for the delivery of |
15 | | residential
mortgage loans to a third party lender and |
16 | | soliciting, processing, placing,
or negotiating |
17 | | residential mortgage loans. |
18 | | (p) "Loan broker" or "broker" shall mean a person, |
19 | | partnership,
association, corporation, or limited |
20 | | liability company, other than
those persons, partnerships,
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21 | | associations, corporations, or limited liability companies |
22 | | exempted
from licensing pursuant to Section
1-4, |
23 | | subsection (d), of this Act, who performs the activities |
24 | | described
in subsections (c), (o), and (yy) of this |
25 | | Section. |
26 | | (q) "Servicing" shall mean the collection or |
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1 | | remittance for or the
right or obligation to collect or |
2 | | remit for any lender, noteowner,
noteholder, or for a |
3 | | licensee's own account, of payments, interests,
principal, |
4 | | and trust items such as hazard insurance and taxes on a
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5 | | residential mortgage loan in accordance with the terms of |
6 | | the residential
mortgage loan; and includes loan payment |
7 | | follow-up, delinquency loan
follow-up, loan analysis and |
8 | | any notifications to the borrower that are
necessary to |
9 | | enable the borrower to keep the loan current and in good |
10 | | standing. "Servicing" includes management of third-party |
11 | | entities acting on behalf of a residential mortgage |
12 | | licensee for the collection of delinquent payments and the |
13 | | use by such third-party entities of said licensee's |
14 | | servicing records or information, including their use in |
15 | | foreclosure. |
16 | | (r) "Full service office" shall mean an office, |
17 | | provided by the licensee and not subleased from the |
18 | | licensee's employees or independent contractors , and staff |
19 | | in Illinois
reasonably adequate to handle efficiently |
20 | | communications, questions, and
other matters relating to |
21 | | any application for, or an existing home mortgage
secured |
22 | | by residential real estate situated in Illinois
with |
23 | | respect to which the licensee is brokering, funding |
24 | | originating,
purchasing, or servicing. The management and |
25 | | operation of each full service
office must include |
26 | | observance of good business practices such as proper |
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1 | | signage; adequate,
organized, and accurate books and |
2 | | records; ample phone lines, hours of
business, staff |
3 | | training and supervision, and provision for a mechanism to
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4 | | resolve consumer inquiries, complaints, and problems. The |
5 | | Commissioner
shall issue regulations with regard to these |
6 | | requirements and shall include
an evaluation of compliance |
7 | | with this Section in his or her periodic
examination of |
8 | | each licensee. "Full service office" does not include a |
9 | | remote location. |
10 | | (s) "Purchasing" shall mean the purchase of |
11 | | conventional or
government-insured mortgage loans secured |
12 | | by residential real estate
situated in Illinois from |
13 | | either the lender or from the secondary market. |
14 | | (t) "Borrower" shall mean the person or persons who |
15 | | seek the services of
a loan broker, originator, or lender. |
16 | | (u) "Originating" shall mean the issuing of |
17 | | commitments for and funding of
residential mortgage loans. |
18 | | (v) "Loan brokerage agreement" shall mean a written |
19 | | agreement in which a
broker or loan broker agrees to do |
20 | | either of the following: |
21 | | (1) obtain a residential mortgage loan for the |
22 | | borrower or assist the
borrower in obtaining a |
23 | | residential mortgage loan; or |
24 | | (2) consider making a residential mortgage loan to |
25 | | the borrower. |
26 | | (w) "Advertisement" shall mean the attempt by |
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1 | | publication,
dissemination, or circulation to induce, |
2 | | directly or indirectly,
any person to enter into a |
3 | | residential mortgage loan agreement or
residential |
4 | | mortgage loan brokerage agreement relative to a
mortgage |
5 | | secured by residential real estate situated in Illinois. |
6 | | (x) (Blank). |
7 | | (y) "Government-insured mortgage loan" shall mean any |
8 | | mortgage loan made
on the security of residential real |
9 | | estate insured by the Department of
Housing and Urban |
10 | | Development or Farmers Home Loan Administration, or
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11 | | guaranteed by the Veterans Administration. |
12 | | (z) "Annual audit" shall mean a certified audit of the |
13 | | licensee's books and
records and systems of internal |
14 | | control performed by a certified public
accountant in |
15 | | accordance with generally accepted accounting principles
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16 | | and generally accepted auditing standards. |
17 | | (aa) "Financial institution" shall mean a savings and |
18 | | loan
association, savings bank, credit union, or a bank |
19 | | organized under the
laws of Illinois or a savings and loan |
20 | | association, savings bank,
credit union or a bank |
21 | | organized under the laws of the United States and
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22 | | headquartered in Illinois. |
23 | | (bb) "Escrow agent" shall mean a third party, |
24 | | individual or entity
charged with the fiduciary obligation |
25 | | for holding escrow funds on a
residential mortgage loan |
26 | | pending final payout of those funds
in accordance with the |
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1 | | terms of the residential mortgage loan. |
2 | | (cc) "Net worth" shall have the meaning ascribed |
3 | | thereto in Section 3-5
of this Act. |
4 | | (dd) "Affiliate" shall mean: |
5 | | (1) any entity that directly controls or is |
6 | | controlled by the licensee
and any other company that |
7 | | is directly affecting activities regulated by
this Act |
8 | | that is controlled by the company that controls the |
9 | | licensee; |
10 | | (2) any entity: |
11 | | (A) that is controlled, directly or |
12 | | indirectly, by a trust or otherwise,
by or for the |
13 | | benefit of shareholders who beneficially or |
14 | | otherwise
control, directly or indirectly, by |
15 | | trust or otherwise, the licensee or any
company |
16 | | that controls the licensee; or |
17 | | (B) a majority of the directors or trustees of |
18 | | which constitute a
majority of the persons holding |
19 | | any such office with the licensee or any
company |
20 | | that controls the licensee; |
21 | | (3) any company, including a real estate |
22 | | investment trust, that is
sponsored and advised on a |
23 | | contractual basis by the licensee or any
subsidiary or |
24 | | affiliate of the licensee. |
25 | | (ee) "First tier subsidiary" shall be defined by |
26 | | regulation
incorporating the comparable definitions used |
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1 | | by the Office of the
Comptroller of the Currency and the |
2 | | Illinois Commissioner of Banks
and Real Estate. |
3 | | (ff) "Gross delinquency rate" means the quotient |
4 | | determined by dividing
(1) the sum of (i) the number of |
5 | | government-insured residential mortgage loans
funded or |
6 | | purchased by a licensee in the preceding calendar year |
7 | | that are
delinquent and (ii) the number of conventional |
8 | | residential mortgage loans
funded or purchased by the |
9 | | licensee in the preceding calendar year that are
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10 | | delinquent by (2) the sum of (i) the number of |
11 | | government-insured residential
mortgage loans funded or |
12 | | purchased by the licensee in the preceding calendar
year |
13 | | and (ii) the number of conventional residential mortgage |
14 | | loans funded or
purchased by the licensee in the preceding |
15 | | calendar year. |
16 | | (gg) "Delinquency rate factor" means the factor set by |
17 | | rule of the
Commissioner that is multiplied by the average |
18 | | gross delinquency rate of
licensees, determined annually |
19 | | for the immediately preceding calendar year, for
the |
20 | | purpose of determining which licensees shall be examined |
21 | | by the
Commissioner pursuant to subsection (b) of Section |
22 | | 4-8 of this Act. |
23 | | (hh) (Blank). |
24 | | (ii) "Confidential supervisory information" means any |
25 | | report of examination, visitation, or investigation |
26 | | prepared by the Commissioner under this Act, any report of |
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1 | | examination visitation, or investigation prepared by the |
2 | | state regulatory authority of another state that examines |
3 | | a licensee, any document or record prepared or obtained in |
4 | | connection with or relating to any examination, |
5 | | visitation, or investigation, and any record prepared or |
6 | | obtained by the Commissioner to the extent that the record |
7 | | summarizes or contains information derived from any |
8 | | report, document, or record described in this subsection. |
9 | | "Confidential supervisory information" does not include |
10 | | any information or record routinely prepared by a licensee |
11 | | and maintained in the ordinary course of business or any |
12 | | information or record that is required to be made publicly |
13 | | available pursuant to State or federal law or rule.
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14 | | (jj) "Mortgage loan originator" means an individual |
15 | | who for compensation or gain or in the expectation of |
16 | | compensation or gain: |
17 | | (i) takes a residential mortgage loan application; |
18 | | or |
19 | | (ii) offers or negotiates terms of a residential |
20 | | mortgage loan. |
21 | | "Mortgage loan originator" includes an individual |
22 | | engaged in loan modification activities as defined in |
23 | | subsection (yy) of this Section. A mortgage loan |
24 | | originator engaged in loan modification activities shall |
25 | | report those activities to the Department of Financial and |
26 | | Professional Regulation in the manner provided by the |
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1 | | Department; however, the Department shall not impose a fee |
2 | | for reporting, nor require any additional qualifications |
3 | | to engage in those activities beyond those provided |
4 | | pursuant to this Act for mortgage loan originators. |
5 | | "Mortgage loan originator" does not include an |
6 | | individual engaged solely as a loan processor or |
7 | | underwriter except as otherwise provided in subsection (d) |
8 | | of Section 7-1A of this Act. |
9 | | "Mortgage loan originator" does not include a person |
10 | | or entity that only performs real estate brokerage |
11 | | activities and is licensed in accordance with the Real |
12 | | Estate License Act of 2000, unless the person or entity is |
13 | | compensated by a lender, a mortgage broker, or other |
14 | | mortgage loan originator, or by any agent of that lender, |
15 | | mortgage broker, or other mortgage loan originator. |
16 | | "Mortgage loan originator" does not include a person |
17 | | or entity solely involved in extensions of credit relating |
18 | | to timeshare plans, as that term is defined in Section |
19 | | 101(53D) of Title 11, United States Code. |
20 | | (kk) "Depository institution" has the same meaning as |
21 | | in Section 3 of the Federal Deposit Insurance Act, and |
22 | | includes any credit union. |
23 | | (ll) "Dwelling" means a residential structure or |
24 | | mobile home which contains one to 4 family housing units, |
25 | | or individual units of condominiums or cooperatives. |
26 | | (mm) "Immediate family member" means a spouse, child, |
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1 | | sibling, parent, grandparent, or grandchild, and includes |
2 | | step-parents, step-children, step-siblings, or adoptive |
3 | | relationships. |
4 | | (nn) "Individual" means a natural person. |
5 | | (oo) "Loan processor or underwriter" means an |
6 | | individual who performs clerical or support duties as an |
7 | | employee at the direction of and subject to the |
8 | | supervision and instruction of a person licensed, or |
9 | | exempt from licensing, under this Act. "Clerical or |
10 | | support duties" includes subsequent to the receipt of an |
11 | | application: |
12 | | (i) the receipt, collection, distribution, and |
13 | | analysis of information common for the processing or |
14 | | underwriting of a residential mortgage loan; and |
15 | | (ii) communicating with a consumer to obtain the |
16 | | information necessary for the processing or |
17 | | underwriting of a loan, to the extent that the |
18 | | communication does not include offering or negotiating |
19 | | loan rates or terms, or counseling consumers about |
20 | | residential mortgage loan rates or terms. An |
21 | | individual engaging solely in loan processor or |
22 | | underwriter activities shall not represent to the |
23 | | public, through advertising or other means of |
24 | | communicating or providing information, including the |
25 | | use of business cards, stationery, brochures, signs, |
26 | | rate lists, or other promotional items, that the |
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1 | | individual can or will perform any of the activities |
2 | | of a mortgage loan originator. |
3 | | (pp) "Nationwide Multistate Licensing System and |
4 | | Registry" means a mortgage licensing system developed and |
5 | | maintained by the Conference of State Bank Supervisors and |
6 | | the American Association of Residential Mortgage |
7 | | Regulators for the licensing and registration of licensed |
8 | | mortgage loan originators. |
9 | | (qq) "Nontraditional mortgage product" means any |
10 | | mortgage product other than a 30-year fixed rate mortgage. |
11 | | (rr) "Person" means a natural person, corporation, |
12 | | company, limited liability company, partnership, or |
13 | | association. |
14 | | (ss) "Real estate brokerage activity" means any |
15 | | activity that involves offering or providing real estate |
16 | | brokerage services to the public, including: |
17 | | (1) acting as a real estate agent or real estate |
18 | | broker for a buyer, seller, lessor, or lessee of real |
19 | | property; |
20 | | (2) bringing together parties interested in the |
21 | | sale, purchase, lease, rental, or exchange of real |
22 | | property; |
23 | | (3) negotiating, on behalf of any party, any |
24 | | portion of a contract relating to the sale, purchase, |
25 | | lease, rental, or exchange of real property, other |
26 | | than in connection with providing financing with |
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1 | | respect to any such transaction; |
2 | | (4) engaging in any activity for which a person |
3 | | engaged in the activity is required to be registered |
4 | | or licensed as a real estate agent or real estate |
5 | | broker under any applicable law; or |
6 | | (5) offering to engage in any activity, or act in |
7 | | any capacity, described in this subsection (ss). |
8 | | (tt) "Registered mortgage loan originator" means any |
9 | | individual that: |
10 | | (1) meets the definition of mortgage loan |
11 | | originator and is an employee of: |
12 | | (A) a depository institution; |
13 | | (B) a subsidiary that is: |
14 | | (i) owned and controlled by a depository |
15 | | institution; and |
16 | | (ii) regulated by a federal banking |
17 | | agency; or |
18 | | (C) an institution regulated by the Farm |
19 | | Credit Administration; and |
20 | | (2) is registered with, and maintains a unique |
21 | | identifier through, the Nationwide Multistate |
22 | | Licensing System and Registry. |
23 | | (uu) "Unique identifier" means a number or other |
24 | | identifier assigned by protocols established by the |
25 | | Nationwide Multistate Licensing System and Registry. |
26 | | (vv) "Residential mortgage license" means a license |
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1 | | issued pursuant to Section 1-3, 2-2, or 2-6 of this Act. |
2 | | (ww) "Mortgage loan originator license" means a |
3 | | license issued pursuant to Section 7-1A, 7-3, or 7-6 of |
4 | | this Act. |
5 | | (xx) "Secretary" means the Secretary of the Department |
6 | | of Financial and Professional Regulation, or a person |
7 | | authorized by the Secretary or by this Act to act in the |
8 | | Secretary's stead. |
9 | | (yy) "Loan modification" means, for compensation or |
10 | | gain, either directly or indirectly offering or |
11 | | negotiating on behalf of a borrower or homeowner to adjust |
12 | | the terms of a residential mortgage loan in a manner not |
13 | | provided for in the original or previously modified |
14 | | mortgage loan. |
15 | | (zz) "Short sale facilitation" means, for compensation |
16 | | or gain, either directly or indirectly offering or |
17 | | negotiating on behalf of a borrower or homeowner to |
18 | | facilitate the sale of residential real estate subject to |
19 | | one or more residential mortgage loans or debts |
20 | | constituting liens on the property in which the proceeds |
21 | | from selling the residential real estate will fall short |
22 | | of the amount owed and the lien holders are contacted to |
23 | | agree to release their lien on the residential real estate |
24 | | and accept less than the full amount owed on the debt. |
25 | | (aaa) "Bona fide nonprofit organization" means an |
26 | | organization that is described in Section 501(c)(3) of the |
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1 | | Internal Revenue Code, is exempt from federal income tax |
2 | | under Section 501(a) of the Internal Revenue Code, does |
3 | | not operate in a commercial context, and does all of the |
4 | | following: |
5 | | (1) Promotes affordable housing or provides home |
6 | | ownership education or similar services. |
7 | | (2) Conducts its activities in a manner that |
8 | | serves public or charitable purposes. |
9 | | (3) Receives funding and revenue and charges fees |
10 | | in a manner that does not create an incentive for |
11 | | itself or its employees to act other than in the best |
12 | | interests of its clients. |
13 | | (4) Compensates its employees in a manner that |
14 | | does not create an incentive for its employees to act |
15 | | other than in the best interests of its clients. |
16 | | (5) Provides to, or identifies for, the borrower |
17 | | residential mortgage loans with terms favorable to the |
18 | | borrower and comparable to residential mortgage loans |
19 | | and housing assistance provided under government |
20 | | housing assistance programs. |
21 | | (bbb) "Remote location" means a location other than a |
22 | | principal place of business or a full service office at |
23 | | which a mortgage loan originator of a licensee may conduct |
24 | | business. |
25 | | The Commissioner may define by rule and regulation any |
26 | | terms used
in this Act for the efficient and clear |
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1 | | administration of this Act. |
2 | | (Source: P.A. 100-783, eff. 8-10-18; 100-851, eff. 8-14-18; |
3 | | 100-1153, eff. 12-19-18; 101-81, eff. 7-12-19.) |
4 | | (205 ILCS 635/3-11 new) |
5 | | Sec. 3-11. Remote location operations. Licensees may allow |
6 | | mortgage loan originators to work from a remote location if: |
7 | | (1) the licensee has written policies and procedures |
8 | | for the supervision of mortgage loan originators working |
9 | | from a remote location; |
10 | | (2) access to company platforms and customer |
11 | | information is in accordance with the licensee's |
12 | | comprehensive written information security plan; |
13 | | (3) no in-person customer interaction occurs at a |
14 | | mortgage originator's residence unless that residence is a |
15 | | licensed location; |
16 | | (4) physical records are not maintained at a remote |
17 | | location; |
18 | | (5) customer interactions and conversations about |
19 | | consumers will be in compliance with federal and State |
20 | | information security requirements, including applicable |
21 | | provisions under the federal Gramm-Leach-Bliley Act and |
22 | | the Safeguards Rule established by the Federal Trade |
23 | | Commission and set forth in 16 CFR Part 314, as such |
24 | | requirements may be amended from time to time; |
25 | | (6) mortgage loan originators working at a remote |
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1 | | location access the company's secure systems, including a |
2 | | cloud-based system, directly from any out-of-office device |
3 | | the mortgage loan originator uses, including, but not |
4 | | limited to, a laptop, phone, desktop computer, or tablet, |
5 | | via a virtual private network or comparable system that |
6 | | ensures secure connectivity and requires passwords or |
7 | | other forms of authentication to access; |
8 | | (7) the licensee ensures that appropriate security |
9 | | updates, patches, or other alterations to the security of |
10 | | all devices used at remote locations are installed and |
11 | | maintained; |
12 | | (8) the licensee has an ability to remotely lock or |
13 | | erase company-related contents of any device or otherwise |
14 | | remotely limit all access to a company's secure systems; |
15 | | and |
16 | | (9) the Nationwide Multistate Licensing System and
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17 | | Registry record of a loan originator that works from a |
18 | | remote location designates the principal place of business |
19 | | as the loan originator's registered location unless the |
20 | | loan originator elects another licensed branch office as a |
21 | | registered location.
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