Full Text of HB4011 96th General Assembly
HB4011sam002 96TH GENERAL ASSEMBLY
|
Sen. Kwame Raoul
Filed: 5/6/2009
|
|
09600HB4011sam002 |
|
LRB096 05294 MJR 26273 a |
|
| 1 |
| AMENDMENT TO HOUSE BILL 4011
| 2 |
| AMENDMENT NO. ______. Amend House Bill 4011 on page 1, line | 3 |
| 5, by replacing "1-2," with "1-2, 1-3,"; and | 4 |
| on page 1, line 6, by replacing "4-8.3, and" with "4-8.3, 7-1, | 5 |
| and"; and
| 6 |
| on page 3, immediately below line 19, by inserting the | 7 |
| following:
| 8 |
| "(205 ILCS 635/1-3) (from Ch. 17, par. 2321-3)
| 9 |
| Sec. 1-3. Necessity for License; Scope of Act.
| 10 |
| (a) No person, partnership, association, corporation or | 11 |
| other entity
shall engage in the business of brokering, | 12 |
| funding, originating, servicing
or purchasing of residential | 13 |
| mortgage loans without first obtaining a
license from the | 14 |
| Commissioner in accordance with the licensing procedure
| 15 |
| provided in this Article I and such regulations as may be |
|
|
|
09600HB4011sam002 |
- 2 - |
LRB096 05294 MJR 26273 a |
|
| 1 |
| promulgated by
the Commissioner. The licensing provisions of | 2 |
| this Section shall not apply
to any entity engaged solely in | 3 |
| commercial mortgage lending or
to any person, partnership | 4 |
| association, corporation or other entity
exempted pursuant to | 5 |
| Section 1-4, subsection (d), of this Act or in accordance
with | 6 |
| regulations promulgated by the Commissioner hereunder. No | 7 |
| provision of this Act shall apply to an exempt person or entity | 8 |
| as defined in items (1) and (1.5) of subsection (d) of Section | 9 |
| 1-4 of this Act.
| 10 |
| (b) No person, partnership, association, corporation, or | 11 |
| other entity
except a licensee under this Act or an entity | 12 |
| exempt from licensing
pursuant to Section 1-4, subsection (d), | 13 |
| of this Act shall do any business
under any name or title, or | 14 |
| circulate or use any advertising or make any
representation or | 15 |
| give any information to any person, which indicates or
| 16 |
| reasonably implies activity within the scope
of this Act.
| 17 |
| (c) The Commissioner may, through the Attorney General, | 18 |
| request the circuit
court of either Cook or Sangamon County to | 19 |
| issue an injunction to restrain
any person from violating or | 20 |
| continuing to violate any of the foregoing
provisions of this | 21 |
| Section.
| 22 |
| (d) When the Commissioner has reasonable cause to believe | 23 |
| that any
entity which has not submitted an application for | 24 |
| licensure is conducting
any of the activities described in | 25 |
| subsection (a) hereof, the Commissioner
shall have the power to | 26 |
| examine all books and records of the entity and any
additional |
|
|
|
09600HB4011sam002 |
- 3 - |
LRB096 05294 MJR 26273 a |
|
| 1 |
| documentation necessary in order to determine whether such
| 2 |
| entity should become licensed under this Act.
| 3 |
| (d-1) The Commissioner may issue orders against any person | 4 |
| if the Commissioner has reasonable cause to believe that an | 5 |
| unsafe, unsound, or unlawful practice has occurred, is | 6 |
| occurring, or is about to occur, if any person has violated, is | 7 |
| violating, or is about to violate any law, rule, or written | 8 |
| agreement with the Commissioner, or for the purposes of | 9 |
| administering the provisions of this Act and any rule adopted | 10 |
| in accordance with this Act.
| 11 |
| (e) Any person, partnership, association, corporation or | 12 |
| other entity
who violates any provision of this Section commits | 13 |
| a business offense and
shall be fined an amount not to exceed | 14 |
| $25,000.
| 15 |
| (f) Each person, partnership, association, corporation or | 16 |
| other entity
conducting activities regulated by this Act shall | 17 |
| be issued one license.
Each office, place of business or | 18 |
| location at which a residential mortgage
licensee conducts any | 19 |
| part of his or her business must
be recorded with the | 20 |
| Commissioner pursuant to Section 2-8 of this Act.
| 21 |
| (g) Licensees under this Act shall solicit, broker, fund, | 22 |
| originate,
service and purchase residential mortgage loans | 23 |
| only in conformity with the
provisions of this Act and such | 24 |
| rules and regulations as may be promulgated
by the | 25 |
| Commissioner.
| 26 |
| (h) This Act applies to all entities doing business in |
|
|
|
09600HB4011sam002 |
- 4 - |
LRB096 05294 MJR 26273 a |
|
| 1 |
| Illinois as
residential mortgage bankers, as defined by "An Act | 2 |
| to provide for the
regulation of mortgage bankers", approved | 3 |
| September 15, 1977, as amended,
regardless of whether licensed | 4 |
| under that or any prior Act. Any existing
residential mortgage | 5 |
| lender or residential mortgage broker in Illinois
whether or | 6 |
| not previously licensed, must operate in accordance with this | 7 |
| Act.
| 8 |
| (i) This Act is a successor Act to and a continuance of the | 9 |
| regulation
of residential mortgage bankers provided in, "An Act | 10 |
| to provide for the
regulation of mortgage bankers", approved | 11 |
| September 15, 1977, as amended.
| 12 |
| Entities and persons subject to the predecessor Act shall | 13 |
| be subject to
this Act from and after its effective date.
| 14 |
| (Source: P.A. 93-1018, eff. 1-1-05.)"; and
| 15 |
| on page 6, by replacing lines 1 through 3 with the following: | 16 |
| "(1.5) Any employee of a person or entity mentioned in | 17 |
| item (1) of this subsection , when acting for such person or | 18 |
| entity, or any registered mortgage loan originator when | 19 |
| acting for an entity described in subsection (tt) of this | 20 |
| Section ."; and | 21 |
| on page 7, immediately below line 12, by inserting the | 22 |
| following: | 23 |
| " (7) A nonprofit organization that is recognized as tax | 24 |
| exempt under 26 U.S.C. 501(c)(3) whose primary activity is |
|
|
|
09600HB4011sam002 |
- 5 - |
LRB096 05294 MJR 26273 a |
|
| 1 |
| the construction, remodeling, or rehabilitation of homes | 2 |
| for sale to and or use by low-income families is exempt | 3 |
| from this Section provided that: | 4 |
| (A) the nonprofit organization makes no profit | 5 |
| mortgage loans to low-income families; and | 6 |
| (B) no fees accrue directly to the nonprofit | 7 |
| organization from those mortgage loans. "; and
| 8 |
| on page 19, immediately below line 18, by inserting the | 9 |
| following: | 10 |
| " (vv) "Residential mortgage license" means a license | 11 |
| issued pursuant to Section 1-3, 2-2, or 2-6 of this Act. | 12 |
| (ww) "Mortgage loan originator license" means a license | 13 |
| issued pursuant to Section 7-1A, 7-3, or 7-6 of this Act. "; and
| 14 |
| on page 48, line 12, by replacing "in duplicate" with " in | 15 |
| duplicate "; and | 16 |
| on page 48, line 16, after "Commissioner", by inserting " or on | 17 |
| the Nationwide Mortgage Licensing System and Registry "; and | 18 |
| on page 59, line 13, by replacing " brokering " with " brokerage "; | 19 |
| and | 20 |
| by replacing line 9 on page 60 through line 22 on page 62 with | 21 |
| the following:
|
|
|
|
09600HB4011sam002 |
- 6 - |
LRB096 05294 MJR 26273 a |
|
| 1 |
| "(205 ILCS 635/7-1)
| 2 |
| Sec. 7-1. Registration required; rules and regulations. | 3 |
| Beginning 6 months
after the effective date of this amendatory | 4 |
| Act of the 93rd General Assembly,
it is unlawful for any | 5 |
| natural person to act or assume to act as a loan
originator, as | 6 |
| defined in subsection (hh) of Section 1-4, without being
| 7 |
| registered with the Commissioner unless the natural person is | 8 |
| exempt under
items (1) and (1.5) of subsection (d) of Section | 9 |
| 1-4 of this Act. The
Commissioner shall promulgate
rules
| 10 |
| prescribing the criteria for the registration and regulation of | 11 |
| loan
originators, including but not limited to, | 12 |
| qualifications, fees, examination,
education, supervision, and | 13 |
| enforcement. This Section shall not be effective on or after | 14 |
| (1) the operability date of January 1, 2011 or (2) the | 15 |
| operability date selected pursuant to Section 7-1A of this Act | 16 |
| for a mortgage loan originator license; provided, however, that | 17 |
| a violation of this Section committed before the operability | 18 |
| date remains subject to penalties authorized by this Act.
| 19 |
| (Source: P.A. 93-561, eff. 1-1-04.)
| 20 |
| (205 ILCS 635/7-1A new) | 21 |
| Sec. 7-1A. Mortgage loan originator license. | 22 |
| (a) It is unlawful for any individual to act or assume to | 23 |
| act as a mortgage loan originator, as defined in subsection | 24 |
| (jj) of Section 1-4 of this Act, without obtaining a license |
|
|
|
09600HB4011sam002 |
- 7 - |
LRB096 05294 MJR 26273 a |
|
| 1 |
| from the Director, unless the individual is exempt under | 2 |
| subsection (c) of this Section. Each licensed mortgage loan | 3 |
| originator must register with and maintain a valid unique | 4 |
| identifier issued by the Nationwide Mortgage Licensing System | 5 |
| and Registry. | 6 |
| (b) In order to facilitate an orderly transition to | 7 |
| licensing and minimize disruption in the mortgage marketplace, | 8 |
| the operability date for subsection (a) of this Section shall | 9 |
| be January 1, 2011, or any later date approved by the Secretary | 10 |
| of the U.S. Department of Housing and Urban Development, | 11 |
| pursuant to the authority granted under federal Public Law | 12 |
| 110-289, Section 1508(a), provided that for all individuals who | 13 |
| are loss mitigation specialists employed by servicers, the | 14 |
| operability date shall be July 31, 2011, or any later date | 15 |
| approved by the Secretary of the U.S. Department of Housing and | 16 |
| Urban Development pursuant to authority granted under Public | 17 |
| Law 110-289, Section 1508(a). | 18 |
| (c) The following, when engaged in the following | 19 |
| activities, are exempt from this Act: | 20 |
| (1) Registered mortgage loan originators, when acting | 21 |
| for an entity described in subsection (tt) of Section 1-4. | 22 |
| (2) Any individual who offers or negotiates terms of a | 23 |
| residential mortgage loan with or on behalf of an immediate | 24 |
| family member of the individual. | 25 |
| (3) Any individual who offers or negotiates terms of a | 26 |
| residential mortgage loan secured by a dwelling that served |
|
|
|
09600HB4011sam002 |
- 8 - |
LRB096 05294 MJR 26273 a |
|
| 1 |
| as the individual's residence. | 2 |
| (4) A licensed attorney who negotiates the terms of a | 3 |
| residential mortgage loan on behalf of a client as an | 4 |
| ancillary matter to the attorney's representation of the | 5 |
| client, unless the attorney is compensated by a lender, a | 6 |
| mortgage broker, or other mortgage loan originator or by | 7 |
| any agent of a lender, mortgage broker, or other mortgage | 8 |
| loan originator. | 9 |
| (d) A loan processor or underwriter who is an independent | 10 |
| contractor may not engage in the activities of a loan processor | 11 |
| or underwriter unless he or she obtains and maintains a license | 12 |
| under subsection (a) of this Section. Each independent | 13 |
| contractor loan processor or underwriter licensed as a mortgage | 14 |
| loan originator must have and maintain a valid unique | 15 |
| identifier issued by the Nationwide Mortgage Licensing System | 16 |
| and Registry. | 17 |
| (e) For the purposes of implementing an orderly and | 18 |
| efficient licensing process, the Director may establish | 19 |
| licensing rules or regulations and interim procedures for | 20 |
| licensing and acceptance of applications. For previously | 21 |
| registered or licensed individuals, the Director may establish | 22 |
| expedited review and licensing procedures. "; and | 23 |
| on page 66, line 18, by replacing " 7-11 " with " 7-12 ".
|
|