Full Text of HB2627 99th General Assembly
HB2627eng 99TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning business.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The High Risk Home Loan Act is amended by | 5 | | changing Section 10 as follows:
| 6 | | (815 ILCS 137/10)
| 7 | | (Text of Section before P.A. 97-849 takes effect ) | 8 | | Sec. 10. Definitions. As used in this Act:
| 9 | | "Approved credit counselor" means a credit counselor | 10 | | approved by the
Director of Financial Institutions.
| 11 | | "Borrower" means a natural person who seeks or obtains a | 12 | | high risk
home loan.
| 13 | | "Commissioner" means the Commissioner of the Office of | 14 | | Banks and Real
Estate.
| 15 | | "Department" means the Department of Financial | 16 | | Institutions.
| 17 | | "Director" means the Director of Financial Institutions.
| 18 | | "Good faith" means honesty in fact in the conduct or | 19 | | transaction concerned.
| 20 | | "High risk home loan"
means a home equity loan in which (i) | 21 | | at the time of origination, the annual
percentage rate
exceeds | 22 | | by more than 6 percentage points in the case of a first lien | 23 | | mortgage,
or
by more than 8 percentage points in the case of a |
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| 1 | | junior mortgage, the yield on
U.S. Treasury securities having | 2 | | comparable periods of maturity to the loan
maturity as of the | 3 | | fifteenth day of the month immediately preceding the month
in
| 4 | | which the application for the loan is received by the lender or | 5 | | (ii) the total
points
and fees payable by the consumer at or | 6 | | before closing will exceed the greater
of
5% of the total loan | 7 | | amount or $800. The $800 figure shall be adjusted annually
on | 8 | | January 1 by the annual percentage change in the Consumer Price | 9 | | Index for
All Urban Consumers for all items published by the | 10 | | United States Department of
Labor.
"High risk home loan"
does
| 11 | | not include a loan that is made primarily for a business | 12 | | purpose unrelated to
the
residential real property securing the | 13 | | loan or to an open-end credit plan
subject to
12 CFR 226 (2000, | 14 | | no subsequent amendments or editions are included).
| 15 | | "Home equity loan" means any loan secured by the borrower's | 16 | | primary
residence where the proceeds are not used as purchase | 17 | | money for the
residence.
| 18 | | "Lender" means a natural or artificial person who | 19 | | transfers, deals in,
offers, or makes a high risk home loan. | 20 | | "Lender" includes, but is not limited
to,
creditors and
brokers | 21 | | who transfer, deal in, offer, or make high risk home loans. | 22 | | "Lender"
does not include purchasers, assignees, or subsequent | 23 | | holders of high risk home
loans.
| 24 | | "Office" means the Office of Banks and Real Estate.
| 25 | | "Points and fees" means all items required to be disclosed | 26 | | as points and
fees under 12 CFR 226.32 (2000, no subsequent |
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| 1 | | amendments or editions
included); the premium of any single | 2 | | premium credit life, credit disability,
credit
unemployment, | 3 | | or any other life or health insurance that is financed directly
| 4 | | or
indirectly into the loan; and compensation paid directly or | 5 | | indirectly to a
mortgage
broker, including a broker that | 6 | | originates a loan in its own name in a
table-funded
| 7 | | transaction, not otherwise included in 12 CFR 226.4.
| 8 | | "Reasonable" means fair, proper, just, or prudent under the | 9 | | circumstances.
| 10 | | "Servicer" means any entity chartered under the Illinois | 11 | | Banking Act, the
Savings Bank Act, the Illinois Credit Union | 12 | | Act, or the Illinois Savings and
Loan Act of 1985 and any | 13 | | person or entity licensed under the Residential
Mortgage | 14 | | License Act of 1987, the Consumer Installment Loan Act, or the | 15 | | Sales
Finance Agency Act who
is responsible for the collection | 16 | | or remittance for, or has the right or
obligation to collect or | 17 | | remit for, any lender, note owner, or note holder or
for a | 18 | | licensee's own account, of payments, interest, principal, and | 19 | | trust items
(such as hazard
insurance and taxes on a | 20 | | residential mortgage loan) in accordance with the
terms of the | 21 | | residential mortgage loan, including loan payment follow-up,
| 22 | | delinquency loan follow-up, loan analysis, and any | 23 | | notifications to
the borrower that are necessary to enable the | 24 | | borrower to keep the loan current
and in good
standing.
| 25 | | "Total loan amount" has the same meaning as that term is | 26 | | given in 12
CFR 226.32 and shall be calculated in accordance |
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| 1 | | with the Federal Reserve
Board's Official Staff Commentary to | 2 | | that regulation.
| 3 | | (Source: P.A. 93-561, eff. 1-1-04.) | 4 | | (Text of Section after P.A. 97-849 takes effect ) | 5 | | Sec. 10. Definitions. As used in this Act:
| 6 | | "Approved credit counselor" means a credit counselor | 7 | | approved by the
Director of Financial Institutions.
| 8 | | "Bona fide discount points" means loan discount points that | 9 | | are knowingly paid by the consumer for the purpose of reducing, | 10 | | and that in fact result in a bona fide reduction of, the
| 11 | | interest rate or time price differential applicable to the | 12 | | mortgage. | 13 | | "Borrower" means a natural person who seeks or obtains a | 14 | | high risk
home loan.
| 15 | | "Commissioner" means the Commissioner of the Office of | 16 | | Banks and Real
Estate.
| 17 | | "Department" means the Department of Financial | 18 | | Institutions.
| 19 | | "Director" means the Director of Financial Institutions.
| 20 | | "Good faith" means honesty in fact in the conduct or | 21 | | transaction concerned.
| 22 | | "High risk home loan"
means a consumer credit transaction, | 23 | | other than a reverse mortgage, that is secured by the | 24 | | consumer's principal dwelling if: (i) at the time of | 25 | | origination, the annual
percentage rate
exceeds by more than 6 |
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| 1 | | percentage points in the case of a first lien mortgage,
or
by | 2 | | more than 8 percentage points in the case of a junior mortgage, | 3 | | the average prime offer rate, as defined in Section | 4 | | 129C(b)(2)(B) of the federal Truth in Lending Act, for a | 5 | | comparable transaction as of the date on which the interest | 6 | | rate for the transaction is set, or if the dwelling is personal | 7 | | property, then as provided under 15 U.S.C. 1602(bb), as | 8 | | amended, and any corresponding regulation, as amended, (ii) the | 9 | | loan documents permit the creditor to charge or collect | 10 | | prepayment fees or penalties more than 36 months after the | 11 | | transaction closing or such fees exceed, in the aggregate, more | 12 | | than 2% of the amount prepaid, or (iii) the total
points
and | 13 | | fees payable in connection with the transaction, other than | 14 | | bona fide third-party charges not retained by the mortgage | 15 | | originator, creditor, or an affiliate of the mortgage | 16 | | originator or creditor, will exceed (1)
5% of the total loan | 17 | | amount in the case of a transaction for $20,000 or more or (2) | 18 | | the lesser of 8% of the total loan amount or $1,000 (or such | 19 | | other dollar amount as prescribed by federal regulation | 20 | | pursuant to the federal Dodd-Frank Act) in the case of a | 21 | | transaction for less than $20,000, except that, with respect to | 22 | | all transactions, bona fide loan discount points may be | 23 | | excluded as provided for in Section 35 of this Act.
"High risk | 24 | | home loan"
does
not include a loan that is made primarily for a | 25 | | business purpose unrelated to
the
residential real property | 26 | | securing the loan or a consumer credit transaction made by a |
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| 1 | | natural person who provides seller financing secured by a | 2 | | principal residence no more than 3 times in a 12-month period, | 3 | | provided such consumer credit transaction is not made by a | 4 | | person that has constructed or acted as a contractor for the | 5 | | construction of the residence in the ordinary course of | 6 | | business of such person.
| 7 | | "Lender" means a natural or artificial person who | 8 | | transfers, deals in,
offers, or makes a high risk home loan. | 9 | | "Lender" includes, but is not limited
to,
creditors and
brokers | 10 | | who transfer, deal in, offer, or make high risk home loans. | 11 | | "Lender"
does not include purchasers, assignees, or subsequent | 12 | | holders of high risk home
loans.
| 13 | | "Office" means the Office of Banks and Real Estate.
| 14 | | "Points and fees" means all items considered to be points | 15 | | and
fees under 12 CFR 226.32 (2000, or as initially amended | 16 | | pursuant to Section 1431 of the federal Dodd-Frank Act with no | 17 | | subsequent amendments or editions
included, whichever is | 18 | | later); compensation paid directly or indirectly by a consumer | 19 | | or creditor to a
mortgage
broker from any source, including a | 20 | | broker that originates a loan in its own name in a
table-funded
| 21 | | transaction, not otherwise included in 12 CFR 226.4; the | 22 | | maximum prepayment fees and penalties that may be charged or | 23 | | collected under the terms of the credit transaction; all | 24 | | prepayment fees or penalties that are incurred by the consumer | 25 | | if the loan refinances a previous loan made or currently held | 26 | | by the same creditor or an affiliate of the creditor; and |
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| 1 | | premiums or other charges payable at or before closing or | 2 | | financed directly or indirectly into the loan for any credit | 3 | | life, credit disability, credit unemployment, credit property, | 4 | | other accident, loss of income, life, or health insurance or | 5 | | payments directly or indirectly for any debt cancellation or | 6 | | suspension agreement or contract, except that insurance | 7 | | premiums or debt cancellation or suspension fees calculated and | 8 | | paid in full on a monthly basis shall not be considered | 9 | | financed by the creditor. "Points and fees" does not include | 10 | | any insurance premium provided by an agency of the federal | 11 | | government or an agency of a state; any insurance premium paid | 12 | | by the consumer after closing; and any amount of a premium, | 13 | | charge, or fee that is not in excess of the amount payable | 14 | | under policies in effect at the time of origination under | 15 | | Section 203(c)(2)(A) of the National Housing Act (12 U.S.C. | 16 | | 1709(c)(2)(A)), provided that the premium, charge, or fee is | 17 | | required to be refundable on a pro-rated basis and the refund | 18 | | is automatically issued upon notification of the satisfaction | 19 | | of the underlying mortgage loan.
| 20 | | "Reasonable" means fair, proper, just, or prudent under the | 21 | | circumstances.
| 22 | | "Servicer" means any entity chartered under the Illinois | 23 | | Banking Act, the
Savings Bank Act, the Illinois Credit Union | 24 | | Act, or the Illinois Savings and
Loan Act of 1985 and any | 25 | | person or entity licensed under the Residential
Mortgage | 26 | | License Act of 1987, the Consumer Installment Loan Act, or the |
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| 1 | | Sales
Finance Agency Act who
is responsible for the collection | 2 | | or remittance for, or has the right or
obligation to collect or | 3 | | remit for, any lender, note owner, or note holder or
for a | 4 | | licensee's own account, of payments, interest, principal, and | 5 | | trust items
(such as hazard
insurance and taxes on a | 6 | | residential mortgage loan) in accordance with the
terms of the | 7 | | residential mortgage loan, including loan payment follow-up,
| 8 | | delinquency loan follow-up, loan analysis, and any | 9 | | notifications to
the borrower that are necessary to enable the | 10 | | borrower to keep the loan current
and in good
standing.
| 11 | | "Total loan amount" has the same meaning as that term is | 12 | | given in 12
CFR 226.32 and shall be calculated in accordance | 13 | | with the Federal Reserve
Board's Official Staff Commentary to | 14 | | that regulation.
| 15 | | (Source: P.A. 97-849, see Section 10 of P.A. 97-1159 for | 16 | | effective date of P.A. 97-849.)
| 17 | | Section 95. No acceleration or delay. Where this Act makes | 18 | | changes in a statute that is represented in this Act by text | 19 | | that is not yet or no longer in effect (for example, a Section | 20 | | represented by multiple versions), the use of that text does | 21 | | not accelerate or delay the taking effect of (i) the changes | 22 | | made by this Act or (ii) provisions derived from any other | 23 | | Public Act.
| 24 | | Section 99. Effective date. This Act takes effect upon | 25 | | becoming law.
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