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1 | AN ACT concerning business.
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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 High Risk Home Loan Act is amended by | |||||||||||||||||||
5 | changing Section 10 as follows:
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6 | (815 ILCS 137/10)
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7 | Sec. 10. Definitions. As used in this Act:
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8 | "Approved credit counselor" means a credit counselor | |||||||||||||||||||
9 | approved by the
Director of Financial Institutions.
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10 | "Borrower" means a natural person who seeks or obtains a | |||||||||||||||||||
11 | high risk
home loan.
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12 | "Commissioner" means the Commissioner of the Office of | |||||||||||||||||||
13 | Banks and Real
Estate.
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14 | "Department" means the Department of Financial | |||||||||||||||||||
15 | Institutions.
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16 | "Director" means the Director of Financial Institutions.
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17 | "Good faith" means honesty in fact in the conduct or | |||||||||||||||||||
18 | transaction concerned.
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19 | "High risk home loan"
means a home equity loan in which (i) | |||||||||||||||||||
20 | at the time of origination, the annual
percentage rate
exceeds | |||||||||||||||||||
21 | by more than 6 percentage points in the case of a first lien | |||||||||||||||||||
22 | mortgage,
or
by more than 8 percentage points in the case of a | |||||||||||||||||||
23 | junior mortgage, the yield on
U.S. Treasury securities having |
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1 | comparable periods of maturity to the loan
maturity as of the | ||||||
2 | fifteenth day of the month immediately preceding the month
in
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3 | which the application for the loan is received by the lender or | ||||||
4 | (ii) the total
points
and fees payable by the consumer at or | ||||||
5 | before closing will exceed the greater
of
5% of the total loan | ||||||
6 | amount or $800. The $800 figure shall be adjusted annually
on | ||||||
7 | January 1 by the annual percentage change in the Consumer Price | ||||||
8 | Index for
All Urban Consumers for all items published by the | ||||||
9 | United States Department of
Labor.
"High risk home loan"
does
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10 | not include a loan that is made primarily for a business | ||||||
11 | purpose unrelated to
the
residential real property securing the | ||||||
12 | loan or to an open-end credit plan
subject to
12 CFR 226 (2000, | ||||||
13 | no subsequent amendments or editions are included).
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14 | "Home equity loan" means any loan secured by the borrower's | ||||||
15 | primary
residence where the proceeds are not used as purchase | ||||||
16 | money for the
residence.
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17 | "Lender" means a natural or artificial person who | ||||||
18 | transfers, deals in,
offers, or makes a high risk home loan. | ||||||
19 | "Lender" includes, but is not limited
to,
creditors and
brokers | ||||||
20 | who transfer, deal in, offer, or make high risk home loans. | ||||||
21 | "Lender"
does not include purchasers, assignees, or subsequent | ||||||
22 | holders of high risk home
loans.
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23 | "Office" means the Office of Banks and Real Estate.
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24 | "Points and fees" means all items required to be disclosed | ||||||
25 | as points and
fees under 12 CFR 226.32 (2000, no subsequent | ||||||
26 | amendments or editions
included); the premium of any single |
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1 | premium credit life, credit disability,
credit
unemployment, | ||||||
2 | or any other life or health insurance that is financed directly
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3 | or
indirectly into the loan; and compensation paid directly or | ||||||
4 | indirectly to a
mortgage
broker, including a broker that | ||||||
5 | originates a loan in its own name in a
table-funded
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6 | transaction, not otherwise included in 12 CFR 226.4. "Points | ||||||
7 | and fees" does not include: (i) fees paid to the United States | ||||||
8 | Department of Veterans Affairs required by law; (ii) fees paid | ||||||
9 | to the Federal Housing Administration required by law; or (iii) | ||||||
10 | fees paid to the United States Department of Agriculture's | ||||||
11 | Rural Development Loan Program required by law.
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12 | "Reasonable" means fair, proper, just, or prudent under the | ||||||
13 | circumstances.
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14 | "Servicer" means any entity chartered under the Illinois | ||||||
15 | Banking Act, the
Savings Bank Act, the Illinois Credit Union | ||||||
16 | Act, or the Illinois Savings and
Loan Act of 1985 and any | ||||||
17 | person or entity licensed under the Residential
Mortgage | ||||||
18 | License Act of 1987, the Consumer Installment Loan Act, or the | ||||||
19 | Sales
Finance Agency Act who
is responsible for the collection | ||||||
20 | or remittance for, or has the right or
obligation to collect or | ||||||
21 | remit for, any lender, note owner, or note holder or
for a | ||||||
22 | licensee's own account, of payments, interest, principal, and | ||||||
23 | trust items
(such as hazard
insurance and taxes on a | ||||||
24 | residential mortgage loan) in accordance with the
terms of the | ||||||
25 | residential mortgage loan, including loan payment follow-up,
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26 | delinquency loan follow-up, loan analysis, and any |
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1 | notifications to
the borrower that are necessary to enable the | ||||||
2 | borrower to keep the loan current
and in good
standing.
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3 | "Total loan amount" has the same meaning as that term is | ||||||
4 | given in 12
CFR 226.32 and shall be calculated in accordance | ||||||
5 | with the Federal Reserve
Board's Official Staff Commentary to | ||||||
6 | that regulation.
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7 | (Source: P.A. 93-561, eff. 1-1-04.)
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