Full Text of HB0868 94th General Assembly
HB0868 94TH GENERAL ASSEMBLY
|
|
|
94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006 HB0868
Introduced 2/2/2005, by Rep. Angelo Saviano SYNOPSIS AS INTRODUCED: |
|
|
Creates the Mortgage Lender's Closing Duties Act.
Prohibits residential mortgage lenders and investors who receive notice of the
time, date, and location of a closing from failing to provide the escrow closer
with the necessary loan documents and funds. Imposes fines for violations of
the Act and prohibits lenders and investors from passing on those fines as
lending fees. Applies to the closing of owner occupied real property for one to
4 families.
|
| |
|
|
A BILL FOR
|
|
|
|
|
HB0868 |
|
LRB094 03453 LCB 34340 b |
|
| 1 |
| AN ACT concerning mortgage lenders.
| 2 |
| Be it enacted by the People of the State of Illinois,
| 3 |
| represented in the General Assembly:
| 4 |
| Section 1. Short title. This Act may be cited as the | 5 |
| Mortgage Lender's
Closing Duties Act.
| 6 |
| Section 5. Definitions. As used in this Act:
| 7 |
| "Residential real estate", "lender", "borrower", "mortgage | 8 |
| loan",
"residential mortgage loan", "loan broker", "loan | 9 |
| originator", "loan
originating", "residential mortgage loan | 10 |
| commitment", and "escrow agent" are
defined as in the | 11 |
| Residential Mortgage License Act of 1987.
| 12 |
| "Loan package" refers to any and all documentation tendered | 13 |
| by a
lender reasonably necessary to effectuate the escrow | 14 |
| closing, the execution of
which by the borrower shall permit | 15 |
| the immediate disbursement of mortgage loan
proceeds.
| 16 |
| "Escrow closing" refers to the process of accepting escrow | 17 |
| funds and a
loan package by an escrow agent on a residential | 18 |
| mortgage loan and the final
disbursement of those funds, along | 19 |
| with the borrower's down payment, if any,
and the acceptance of | 20 |
| documents from the seller of the residential real
property | 21 |
| sufficient to transfer title (legal or
equitable) to the | 22 |
| subject property to the borrower; and the simultaneous
transfer | 23 |
| of the balance of such funds as may be due to the seller, or as | 24 |
| the
seller and borrower may direct, and the delivery of the | 25 |
| documents from the
seller to the borrower, including, if | 26 |
| applicable, the placing for recording of
the deed or other | 27 |
| document intended to place the borrower in title to the
subject | 28 |
| residential real property.
| 29 |
| "Investor" refers to the entity that invests money in | 30 |
| residential
mortgage loans, or ultimately provides funding | 31 |
| necessary to close a residential
mortgage financing | 32 |
| transaction.
|
|
|
|
HB0868 |
- 2 - |
LRB094 03453 LCB 34340 b |
|
| 1 |
| "Funding" and "good funds" refer to the monetary | 2 |
| consideration provided
by a lender incident to and simultaneous | 3 |
| with the closing of a "residential
mortgage financing | 4 |
| transaction", as that term is defined and used in the
| 5 |
| Residential Mortgage License Act of 1987, and shall consist of | 6 |
| cash,
a cashier's check or checks, a certified check or checks, | 7 |
| a money order or
money orders, or the electronic transfer to | 8 |
| the escrow agent of such cash,
cashier's check or checks, | 9 |
| certified check or checks, or money order or orders,
but shall | 10 |
| not include a bank draft or drafts or the electronic transfer | 11 |
| to the
escrow agent of a bank draft or drafts, nor any other | 12 |
| form of funding
containing conditions precedent to the | 13 |
| negotiation of that funding.
| 14 |
| "Firm written commitment for financing" means a | 15 |
| non-contingent written
agreement to lend to a borrower good | 16 |
| funds secured by a mortgage against a
specific parcel of | 17 |
| residential real property and which shall, at a minimum,
state | 18 |
| the amount of the loan, the rate of interest per annum, the | 19 |
| annual
percentage rate, and any loan origination and loan | 20 |
| discount fees, and shall
be subject to only the following | 21 |
| conditions:
| 22 |
| (1) no material changes in the borrower's financial | 23 |
| condition;
| 24 |
| (2) the lien of the mortgage being insured by a | 25 |
| licensed title insurance
company as the first and paramount | 26 |
| lien against the residential real property;
| 27 |
| (3) matters of survey;
| 28 |
| (4) homeowner's insurance satisfactory to the lender; | 29 |
| and
| 30 |
| (5) the mortgage being funded by a date certain.
| 31 |
| Section 10. Provision of loan documents. No lender or | 32 |
| investor who has
issued a firm written
commitment for mortgage | 33 |
| loan financing, upon receiving reasonable notice prior
to the
| 34 |
| closing from the buyer, the seller, or the escrow closing | 35 |
| company of the date,
time, and location of the closing of the |
|
|
|
HB0868 |
- 3 - |
LRB094 03453 LCB 34340 b |
|
| 1 |
| purchase and sale of 1-4 family,
owner-occupied residential | 2 |
| real estate, shall fail to provide to the escrow
closer
the | 3 |
| mortgage loan documents or loan package at the time, date, and | 4 |
| place for
the closing for execution by the borrower and | 5 |
| reasonably sought by that lender
as a precondition to the | 6 |
| disbursement of mortgage loan proceeds.
| 7 |
| Section 15. Provision of loan funds. No lender or investor | 8 |
| who has
issued a firm written
commitment for
mortgage loan | 9 |
| financing, upon receiving reasonable notice from the buyer, the
| 10 |
| seller, or the escrow closing company of the date, time, and | 11 |
| location of the
closing of the purchase and sale of 1-4 family, | 12 |
| owner-occupied residential real
estate, shall fail to provide | 13 |
| to the escrow closer the necessary funding for
the mortgage | 14 |
| loan in the form of "good funds" at the time, date, and place | 15 |
| for
the closing for use by the borrower incident to the | 16 |
| purchase and sale
transaction. Incident to the funding of that | 17 |
| mortgage loan, any lender
intending to utilize an electronic | 18 |
| transfer of funding shall first secure any
necessary wire | 19 |
| transfer instructions from the escrow closer and shall advise
| 20 |
| the borrower or the borrower's designee in writing of its | 21 |
| intention to transfer
the funding for the
transaction via | 22 |
| electronic means and shall institute that electronic transfer
| 23 |
| in sufficient time so that the necessary funding will be | 24 |
| received by the escrow
closer prior to the time and date of the | 25 |
| escrow closing.
| 26 |
| Section 20. Fees to cover lender's fines prohibited. No | 27 |
| lender or investor
who has issued a firm written
commitment for
| 28 |
| mortgage loan financing, upon receiving reasonable notice from | 29 |
| the buyer, the
seller, or the escrow closing company of the | 30 |
| date, time, and location of the
closing of the purchase and | 31 |
| sale of 1-4 family, owner-occupied residential real
estate, | 32 |
| shall charge or attempt to charge to the borrower a fee or | 33 |
| anything of
value to offset such costs as may be incurred by it | 34 |
| as a result of the
violation by the lender of any Section of |
|
|
|
HB0868 |
- 4 - |
LRB094 03453 LCB 34340 b |
|
| 1 |
| this Act.
| 2 |
| Section 25. Notice to investor. A notice of closing as | 3 |
| described in this Act
that is provided to a
loan
originator or | 4 |
| loan broker shall be deemed to constitute notice to any | 5 |
| investor.
| 6 |
| Section 30. Violations. A loan originator or loan broker | 7 |
| and an
investor who violate this Act shall be jointly and | 8 |
| severally liable to the
borrower for the greater of actual | 9 |
| damages incurred by the borrower on account
of the violation or | 10 |
| violations or $1,000 per occurrence, plus reasonable
| 11 |
| attorney's fees.
| 12 |
| Section 35. Exemption. This Act does not apply to an exempt | 13 |
| entity as
defined in the Residential Mortgage License Act of | 14 |
| 1987.
|
|