Full Text of HB4011 96th General Assembly
HB4011enr 96TH GENERAL ASSEMBLY
|
|
|
HB4011 Enrolled |
|
LRB096 05294 MJR 15360 b |
|
| 1 |
| AN ACT concerning regulation.
| 2 |
| Be it enacted by the People of the State of Illinois,
| 3 |
| represented in the General Assembly:
| 4 |
| Section 5. The Residential Mortgage License Act of 1987 is | 5 |
| amended by changing Sections 1-2, 1-3, 1-4, 2-2, 2-3, 2-4, 2-6, | 6 |
| 3-1, 3-2, 3-4, 4-1, 4-2, 4-5, 4-8.3, 7-1, and the heading of | 7 |
| Article VII and by adding Sections 4-7, 4-8.1A, 4-9.1, 7-1A, | 8 |
| 7-2, 7-3, 7-4, 7-5, 7-6, 7-7, 7-8, 7-9, 7-10, 7-11, 7-12, 7-13, | 9 |
| and 7-14 as follows:
| 10 |
| (205 ILCS 635/1-2) (from Ch. 17, par. 2321-2)
| 11 |
| Sec. 1-2. Purpose of Act and Policy Statement. | 12 |
| (a) The origination,
funding, purchasing and brokering of | 13 |
| residential mortgage loans and the
type of entities involved in | 14 |
| residential mortgage lending have undergone
significant | 15 |
| changes in recent years, due in part to developments in the
| 16 |
| general economy, specifically interest rate volatility, the | 17 |
| sophistication
of the national secondary market for mortgage | 18 |
| loans and the market for
mortgage backed securities. The recent | 19 |
| trend toward deregulation in the
financial services industry | 20 |
| has accelerated the evolution of residential
mortgage lending, | 21 |
| dramatically increasing the types of mortgage loans
offered and | 22 |
| the manner in which they are advertised and marketed to
| 23 |
| consumers. Depository institutions, traditionally the major |
|
|
|
HB4011 Enrolled |
- 2 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| source of
residential mortgage financing for individuals, now | 2 |
| compete for capital
and customers with mortgage bankers and | 3 |
| other financial service
organizations. Residential mortgage | 4 |
| lenders of every type have
increasingly relied on nonfinancial | 5 |
| intermediaries, such as mortgage
brokers, to find customers. | 6 |
| These developments have raised questions as to
whether all | 7 |
| entities engaging in this banking function operate under
| 8 |
| appropriate regulatory scrutiny and as to whether all | 9 |
| residential mortgage
lenders are conducting their business in | 10 |
| the best interests of Illinois
homeowners and potential | 11 |
| homeowners.
| 12 |
| (b) The activities of lenders and their offering of | 13 |
| financing for
residential real property have a direct and | 14 |
| immediate impact upon the
housing industry, the neighborhoods | 15 |
| and communities of this State, its
homeowners and potential | 16 |
| homeowners. The General Assembly finds that it is
essential for | 17 |
| the protection of the citizens of this State and the stability
| 18 |
| of the State's economy that reasonable standards governing the | 19 |
| business
practices of residential mortgage lenders and their | 20 |
| agents be imposed. The
General Assembly further finds that the | 21 |
| obligations of lenders and their agents
to consumers in | 22 |
| connection with making, soliciting, processing, placing or
| 23 |
| negotiating of residential mortgage loans are such as to | 24 |
| warrant the
uniform regulation of the residential mortgage | 25 |
| lending process, including
the application, solicitation, | 26 |
| making and servicing of residential mortgage
loans. The purpose |
|
|
|
HB4011 Enrolled |
- 3 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| of this Act is to protect Illinois consumers seeking
| 2 |
| residential mortgage loans and to ensure that the residential | 3 |
| mortgage
lending industry is operating fairly, honestly and | 4 |
| efficiently, free from
deceptive and anti-competitive | 5 |
| practices. The purpose of this Act is to
regulate residential | 6 |
| mortgage lending to benefit our citizens by ensuring
| 7 |
| availability of residential mortgage funding, to benefit | 8 |
| responsible
providers of residential mortgage loans and | 9 |
| services, and to avoid
requirements inconsistent with | 10 |
| legitimate and responsible business
practices in the | 11 |
| residential mortgage lending industry.
| 12 |
| (c) The General Assembly finds that the provisions of this | 13 |
| amendatory Act of the 96th General Assembly that set forth the | 14 |
| authority and framework for State participation in a Nationwide | 15 |
| Mortgage Licensing System and Registry are consistent with the | 16 |
| purposes of this Section and for the purpose of complying with | 17 |
| the federal Secure and Fair Enforcement for Mortgage Licensing | 18 |
| Act of 2008. | 19 |
| (Source: P.A. 85-735.)
| 20 |
| (205 ILCS 635/1-3) (from Ch. 17, par. 2321-3)
| 21 |
| Sec. 1-3. Necessity for License; Scope of Act.
| 22 |
| (a) No person, partnership, association, corporation or | 23 |
| other entity
shall engage in the business of brokering, | 24 |
| funding, originating, servicing
or purchasing of residential | 25 |
| mortgage loans without first obtaining a
license from the |
|
|
|
HB4011 Enrolled |
- 4 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| Commissioner in accordance with the licensing procedure
| 2 |
| provided in this Article I and such regulations as may be | 3 |
| promulgated by
the Commissioner. The licensing provisions of | 4 |
| this Section shall not apply
to any entity engaged solely in | 5 |
| commercial mortgage lending or
to any person, partnership | 6 |
| association, corporation or other entity
exempted pursuant to | 7 |
| Section 1-4, subsection (d), of this Act or in accordance
with | 8 |
| regulations promulgated by the Commissioner hereunder. No | 9 |
| provision of this Act shall apply to an exempt person or entity | 10 |
| as defined in items (1) and (1.5) of subsection (d) of Section | 11 |
| 1-4 of this Act.
| 12 |
| (b) No person, partnership, association, corporation, or | 13 |
| other entity
except a licensee under this Act or an entity | 14 |
| exempt from licensing
pursuant to Section 1-4, subsection (d), | 15 |
| of this Act shall do any business
under any name or title, or | 16 |
| circulate or use any advertising or make any
representation or | 17 |
| give any information to any person, which indicates or
| 18 |
| reasonably implies activity within the scope
of this Act.
| 19 |
| (c) The Commissioner may, through the Attorney General, | 20 |
| request the circuit
court of either Cook or Sangamon County to | 21 |
| issue an injunction to restrain
any person from violating or | 22 |
| continuing to violate any of the foregoing
provisions of this | 23 |
| Section.
| 24 |
| (d) When the Commissioner has reasonable cause to believe | 25 |
| that any
entity which has not submitted an application for | 26 |
| licensure is conducting
any of the activities described in |
|
|
|
HB4011 Enrolled |
- 5 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| subsection (a) hereof, the Commissioner
shall have the power to | 2 |
| examine all books and records of the entity and any
additional | 3 |
| documentation necessary in order to determine whether such
| 4 |
| entity should become licensed under this Act.
| 5 |
| (d-1) The Commissioner may issue orders against any person | 6 |
| if the Commissioner has reasonable cause to believe that an | 7 |
| unsafe, unsound, or unlawful practice has occurred, is | 8 |
| occurring, or is about to occur, if any person has violated, is | 9 |
| violating, or is about to violate any law, rule, or written | 10 |
| agreement with the Commissioner, or for the purposes of | 11 |
| administering the provisions of this Act and any rule adopted | 12 |
| in accordance with this Act.
| 13 |
| (e) Any person, partnership, association, corporation or | 14 |
| other entity
who violates any provision of this Section commits | 15 |
| a business offense and
shall be fined an amount not to exceed | 16 |
| $25,000.
| 17 |
| (f) Each person, partnership, association, corporation or | 18 |
| other entity
conducting activities regulated by this Act shall | 19 |
| be issued one license.
Each office, place of business or | 20 |
| location at which a residential mortgage
licensee conducts any | 21 |
| part of his or her business must
be recorded with the | 22 |
| Commissioner pursuant to Section 2-8 of this Act.
| 23 |
| (g) Licensees under this Act shall solicit, broker, fund, | 24 |
| originate,
service and purchase residential mortgage loans | 25 |
| only in conformity with the
provisions of this Act and such | 26 |
| rules and regulations as may be promulgated
by the |
|
|
|
HB4011 Enrolled |
- 6 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| Commissioner.
| 2 |
| (h) This Act applies to all entities doing business in | 3 |
| Illinois as
residential mortgage bankers, as defined by "An Act | 4 |
| to provide for the
regulation of mortgage bankers", approved | 5 |
| September 15, 1977, as amended,
regardless of whether licensed | 6 |
| under that or any prior Act. Any existing
residential mortgage | 7 |
| lender or residential mortgage broker in Illinois
whether or | 8 |
| not previously licensed, must operate in accordance with this | 9 |
| Act.
| 10 |
| (i) This Act is a successor Act to and a continuance of the | 11 |
| regulation
of residential mortgage bankers provided in, "An Act | 12 |
| to provide for the
regulation of mortgage bankers", approved | 13 |
| September 15, 1977, as amended.
| 14 |
| Entities and persons subject to the predecessor Act shall | 15 |
| be subject to
this Act from and after its effective date.
| 16 |
| (Source: P.A. 93-1018, eff. 1-1-05.)
| 17 |
| (205 ILCS 635/1-4) (from Ch. 17, par. 2321-4)
| 18 |
| Sec. 1-4. Definitions.
| 19 |
| (a) "Residential real property" or "residential real | 20 |
| estate" shall mean any real property located in Illinois, upon | 21 |
| which is constructed or intended to be constructed a dwelling
| 22 |
| real property located in this State improved by a one-to-four | 23 |
| family
dwelling used or occupied, wholly or partly, as the home | 24 |
| or residence of
one or more persons and may refer, subject to | 25 |
| regulations of the
Commissioner, to unimproved real property |
|
|
|
HB4011 Enrolled |
- 7 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| upon which those kinds dwellings
are to be constructed .
| 2 |
| (b) "Making a residential mortgage loan" or "funding a | 3 |
| residential mortgage
loan" shall mean for compensation or gain, | 4 |
| either directly or indirectly,
advancing funds or making a | 5 |
| commitment to advance funds to a loan applicant
for a | 6 |
| residential mortgage loan.
| 7 |
| (c) "Soliciting, processing, placing, or negotiating a | 8 |
| residential
mortgage loan" shall mean for compensation or gain, | 9 |
| either directly or
indirectly, accepting or offering to accept | 10 |
| an application for a
residential mortgage loan, assisting or | 11 |
| offering to assist in the
processing of an application for a | 12 |
| residential mortgage loan on behalf of a
borrower, or | 13 |
| negotiating or offering to negotiate the terms or conditions
of | 14 |
| a residential mortgage loan with a lender on behalf of a | 15 |
| borrower
including, but not limited to, the submission of | 16 |
| credit packages for the
approval of lenders, the preparation of | 17 |
| residential mortgage loan closing
documents, including a | 18 |
| closing in the name of a broker.
| 19 |
| (d) "Exempt person or entity" shall mean the following:
| 20 |
| (1) (i) Any banking organization or foreign banking | 21 |
| corporation
licensed by the Illinois Commissioner of Banks | 22 |
| and Real Estate or the
United States Comptroller of the | 23 |
| Currency to transact business in this
State; (ii) any | 24 |
| national bank, federally chartered savings and loan
| 25 |
| association, federal savings bank, federal credit union; | 26 |
| (iii) any pension
trust, bank trust, or bank trust company; |
|
|
|
HB4011 Enrolled |
- 8 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| (iv) any bank, savings and loan
association, savings bank, | 2 |
| or credit union organized under the laws of this
or any | 3 |
| other state; (v) any Illinois Consumer Installment Loan Act | 4 |
| licensee;
(vi) any insurance company authorized to | 5 |
| transact business in this State;
(vii) any entity engaged | 6 |
| solely in commercial mortgage lending; (viii) any
service | 7 |
| corporation of a savings and loan association or savings | 8 |
| bank organized
under the laws of this State or the service | 9 |
| corporation of a federally
chartered savings and loan | 10 |
| association or savings bank having
its principal place of | 11 |
| business in this State, other than a service
corporation | 12 |
| licensed or entitled to reciprocity under the Real Estate
| 13 |
| License Act of 2000; or (ix) any first tier subsidiary of a
| 14 |
| bank, the charter of which is issued under the Illinois | 15 |
| Banking Act
by the Illinois Commissioner of Banks and Real | 16 |
| Estate,
or the first tier subsidiary of a bank chartered by | 17 |
| the United States
Comptroller of the Currency and that has | 18 |
| its principal place of business
in this State, provided | 19 |
| that the first tier subsidiary is regularly
examined by the | 20 |
| Illinois Commissioner of Banks and Real Estate
or the | 21 |
| Comptroller of the Currency, or a consumer compliance | 22 |
| examination is
regularly conducted by the Federal Reserve | 23 |
| Board.
| 24 |
| (1.5) Any employee of a person or entity mentioned in
| 25 |
| item (1) of this subsection , when acting for such person or | 26 |
| entity, or any registered mortgage loan originator when |
|
|
|
HB4011 Enrolled |
- 9 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| acting for an entity described in subsection (tt) of this | 2 |
| Section .
| 3 |
| (2) Any person or entity that does not originate
| 4 |
| mortgage loans in the ordinary course of
business making or | 5 |
| acquiring residential mortgage loans
with his or her or its | 6 |
| own funds for his or her or its own investment
without | 7 |
| intent to
make, acquire, or resell more than 2 10 | 8 |
| residential mortgage loans in
any one calendar year.
| 9 |
| (3) Any person employed by a licensee to assist in the | 10 |
| performance of
the activities regulated by this Act who is | 11 |
| compensated in any manner by
only one licensee.
| 12 |
| (4) (Blank). Any person licensed pursuant to the Real | 13 |
| Estate
License Act of
2000, who engages only in the taking | 14 |
| of applications and credit
and
appraisal information to | 15 |
| forward to a licensee or an exempt entity under this
Act | 16 |
| and who is compensated by either a licensee or an exempt | 17 |
| entity under this
Act, but is not compensated by either the | 18 |
| buyer (applicant) or the seller.
| 19 |
| (5) Any individual, corporation, partnership, or other | 20 |
| entity that
originates, services, or brokers residential | 21 |
| mortgage loans, as these
activities are defined in this | 22 |
| Act, and who or which receives no
compensation for those | 23 |
| activities, subject to the Commissioner's
regulations with | 24 |
| regard to the nature and amount of compensation.
| 25 |
| (6) (Blank). A person who prepares supporting | 26 |
| documentation for a residential
mortgage loan application |
|
|
|
HB4011 Enrolled |
- 10 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| taken by a licensee and performs ministerial
functions | 2 |
| pursuant to specific instructions of the licensee who | 3 |
| neither
requires nor permits the preparer to exercise his | 4 |
| or her discretion or
judgment; provided that this activity | 5 |
| is engaged in pursuant to a binding,
written agreement | 6 |
| between the licensee and the preparer that:
| 7 |
| (A) holds the licensee fully accountable for the | 8 |
| preparer's action; and
| 9 |
| (B) otherwise meets the requirements of this | 10 |
| Section and this Act, does
not undermine the purposes | 11 |
| of this Act, and is approved by the
Commissioner.
| 12 |
| (e) "Licensee" or "residential mortgage licensee" shall | 13 |
| mean a person,
partnership, association, corporation, or any | 14 |
| other entity who or which is
licensed pursuant to this Act to | 15 |
| engage in the activities regulated by
this Act.
| 16 |
| (f) "Mortgage loan" "residential mortgage loan" or "home
| 17 |
| mortgage loan" shall mean any loan primarily for personal, | 18 |
| family, or household use that is secured by a mortgage, deed of | 19 |
| trust, or other equivalent consensual security interest on a | 20 |
| dwelling as defined in Section 103(v) of the federal Truth in | 21 |
| Lending Act, or residential real estate upon which is | 22 |
| constructed or intended to be constructed a dwelling a loan to | 23 |
| or for the benefit of any
natural person made primarily for | 24 |
| personal, family, or household use,
primarily secured by either | 25 |
| a mortgage on residential real property or
certificates of | 26 |
| stock or other evidence of ownership interests in and
|
|
|
|
HB4011 Enrolled |
- 11 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| proprietary leases from, corporations, partnerships, or | 2 |
| limited
liability companies formed for the purpose
of | 3 |
| cooperative ownership of residential real property, all | 4 |
| located in Illinois .
| 5 |
| (g) "Lender" shall mean any person, partnership, | 6 |
| association,
corporation, or any other entity who either lends | 7 |
| or invests money in
residential mortgage loans.
| 8 |
| (h) "Ultimate equitable owner" shall mean a person who, | 9 |
| directly
or indirectly, owns or controls an ownership interest | 10 |
| in a corporation,
foreign corporation, alien business | 11 |
| organization, trust, or any other form
of business organization | 12 |
| regardless of whether the person owns or controls
the ownership | 13 |
| interest through one or more persons or one or more proxies,
| 14 |
| powers of attorney, nominees, corporations, associations, | 15 |
| partnerships,
trusts, joint stock companies, or other entities | 16 |
| or devices, or any
combination thereof.
| 17 |
| (i) "Residential mortgage financing transaction" shall | 18 |
| mean the negotiation,
acquisition, sale, or arrangement for or | 19 |
| the offer to negotiate, acquire,
sell, or arrange for, a | 20 |
| residential mortgage loan or residential mortgage
loan | 21 |
| commitment.
| 22 |
| (j) "Personal residence address" shall mean a street | 23 |
| address and shall
not include a post office box number.
| 24 |
| (k) "Residential mortgage loan commitment" shall mean a | 25 |
| contract for
residential mortgage loan financing.
| 26 |
| (l) "Party to a residential mortgage financing |
|
|
|
HB4011 Enrolled |
- 12 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| transaction" shall mean a
borrower, lender, or loan broker in a | 2 |
| residential mortgage financing
transaction.
| 3 |
| (m) "Payments" shall mean payment of all or any of the | 4 |
| following:
principal, interest and escrow reserves for taxes, | 5 |
| insurance and other related
reserves, and reimbursement for | 6 |
| lender advances.
| 7 |
| (n) "Commissioner" shall mean the Commissioner of Banks and | 8 |
| Real Estate , except that all references in this Act to the | 9 |
| Commissioner of Banks and Real Estate are deemed, in | 10 |
| appropriate contexts, to be references to the Secretary of | 11 |
| Financial and Professional Regulation, or his or her designee, | 12 |
| including the Director of the Division of Banking of the | 13 |
| Department of Financial and Professional Regulation
or a person | 14 |
| authorized by the Commissioner, the Office of Banks and Real | 15 |
| Estate
Act, or this Act to act in the Commissioner's stead .
| 16 |
| (n-1) "Director" shall mean the Director of the Division of | 17 |
| Banking of the Department of Financial and Professional | 18 |
| Regulation, except that beginning on the effective date of this | 19 |
| amendatory Act of the 96th General Assembly, all references in | 20 |
| this Act to the Director are deemed, in appropriate contexts, | 21 |
| to be the Secretary of Financial and Professional Regulation, | 22 |
| or his or her designee, including the Director of the Division | 23 |
| of Banking of the Department of Financial and Professional | 24 |
| Regulation. | 25 |
| (o) "Loan brokering", "brokering", or "brokerage service" | 26 |
| shall mean the act
of helping to obtain from another entity, |
|
|
|
HB4011 Enrolled |
- 13 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| for a borrower, a loan secured by
residential real estate | 2 |
| situated in Illinois or assisting a borrower in
obtaining a | 3 |
| loan secured by residential real estate situated in Illinois in
| 4 |
| return for consideration to be paid by either the borrower or | 5 |
| the lender
including, but not limited to, contracting for the | 6 |
| delivery of residential
mortgage loans to a third party lender | 7 |
| and soliciting, processing, placing,
or negotiating | 8 |
| residential mortgage loans.
| 9 |
| (p) "Loan broker" or "broker" shall mean a person, | 10 |
| partnership,
association, corporation, or limited liability | 11 |
| company, other than
those persons, partnerships,
associations, | 12 |
| corporations, or limited liability companies exempted
from | 13 |
| licensing pursuant to Section
1-4, subsection (d), of this Act, | 14 |
| who performs the activities described
in subsections (c) and | 15 |
| (o) of this Section.
| 16 |
| (q) "Servicing" shall mean the collection or remittance for | 17 |
| or the
right or obligation to collect or remit for any lender, | 18 |
| noteowner,
noteholder, or for a licensee's own account, of | 19 |
| payments, interests,
principal, and trust items such as hazard | 20 |
| insurance and taxes on a
residential mortgage loan in | 21 |
| accordance with the terms of the residential
mortgage loan; and | 22 |
| includes loan payment follow-up, delinquency loan
follow-up, | 23 |
| loan analysis and any notifications to the borrower that are
| 24 |
| necessary to enable the borrower to keep the loan current and | 25 |
| in good standing.
| 26 |
| (r) "Full service office" shall mean an office , provided by |
|
|
|
HB4011 Enrolled |
- 14 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| the licensee and not subleased from the licensee's employees, | 2 |
| and staff in Illinois
reasonably adequate to handle efficiently | 3 |
| communications, questions, and
other matters relating to any | 4 |
| application for, or an existing home mortgage
secured by | 5 |
| residential real estate situated in Illinois
with respect to | 6 |
| which the licensee is brokering, funding originating,
| 7 |
| purchasing, or servicing. The management and operation of each | 8 |
| full service
office must include observance of good business | 9 |
| practices such as adequate,
organized, and accurate books and | 10 |
| records; ample phone lines, hours of
business, staff training | 11 |
| and supervision, and provision for a mechanism to
resolve | 12 |
| consumer inquiries, complaints, and problems. The Commissioner
| 13 |
| shall issue regulations with regard to these requirements and | 14 |
| shall include
an evaluation of compliance with this Section in | 15 |
| his or her periodic
examination of each licensee.
| 16 |
| (s) "Purchasing" shall mean the purchase of conventional or
| 17 |
| government-insured mortgage loans secured by residential real | 18 |
| estate
situated in Illinois from either the lender or from the | 19 |
| secondary market.
| 20 |
| (t) "Borrower" shall mean the person or persons who seek | 21 |
| the services of
a loan broker, originator, or lender.
| 22 |
| (u) "Originating" shall mean the issuing of commitments for | 23 |
| and funding of
residential mortgage loans.
| 24 |
| (v) "Loan brokerage agreement" shall mean a written | 25 |
| agreement in which a
broker or loan broker agrees to do either | 26 |
| of the following:
|
|
|
|
HB4011 Enrolled |
- 15 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| (1) obtain a residential mortgage loan for the borrower | 2 |
| or assist the
borrower in obtaining a residential mortgage | 3 |
| loan; or
| 4 |
| (2) consider making a residential mortgage loan to the | 5 |
| borrower.
| 6 |
| (w) "Advertisement" shall mean the attempt by publication,
| 7 |
| dissemination, or circulation to induce, directly or | 8 |
| indirectly,
any person to enter into a residential mortgage | 9 |
| loan agreement or
residential mortgage loan brokerage | 10 |
| agreement relative to a
mortgage secured by residential real | 11 |
| estate situated in Illinois.
| 12 |
| (x) "Residential Mortgage Board" shall mean the | 13 |
| Residential Mortgage
Board created in Section 1-5 of this Act.
| 14 |
| (y) "Government-insured mortgage loan" shall mean any | 15 |
| mortgage loan made
on the security of residential real estate | 16 |
| insured by the Department of
Housing and Urban Development or | 17 |
| Farmers Home Loan Administration, or
guaranteed by the Veterans | 18 |
| Administration.
| 19 |
| (z) "Annual audit" shall mean a certified audit of the | 20 |
| licensee's books and
records and systems of internal control | 21 |
| performed by a certified public
accountant in accordance with | 22 |
| generally accepted accounting principles
and generally | 23 |
| accepted auditing standards.
| 24 |
| (aa) "Financial institution" shall mean a savings and loan
| 25 |
| association, savings bank, credit union, or a bank organized | 26 |
| under the
laws of Illinois or a savings and loan association, |
|
|
|
HB4011 Enrolled |
- 16 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| savings bank,
credit union or a bank organized under the laws | 2 |
| of the United States and
headquartered in Illinois.
| 3 |
| (bb) "Escrow agent" shall mean a third party, individual or | 4 |
| entity
charged with the fiduciary obligation for holding escrow | 5 |
| funds on a
residential mortgage loan pending final payout of | 6 |
| those funds
in accordance with the terms of the residential | 7 |
| mortgage loan.
| 8 |
| (cc) "Net worth" shall have the meaning ascribed thereto in | 9 |
| Section 3-5
of this Act.
| 10 |
| (dd) "Affiliate" shall mean:
| 11 |
| (1) any entity that directly controls or is controlled | 12 |
| by the licensee
and any other company that is directly | 13 |
| affecting activities regulated by
this Act that is | 14 |
| controlled by the company that controls the licensee;
| 15 |
| (2) any entity:
| 16 |
| (A) that is controlled, directly or indirectly, by | 17 |
| a trust or otherwise,
by or for the benefit of | 18 |
| shareholders who beneficially or otherwise
control, | 19 |
| directly or indirectly, by trust or otherwise, the | 20 |
| licensee or any
company that controls the licensee; or
| 21 |
| (B) a majority of the directors or trustees of | 22 |
| which constitute a
majority of the persons holding any | 23 |
| such office with the licensee or any
company that | 24 |
| controls the licensee;
| 25 |
| (3) any company, including a real estate investment | 26 |
| trust, that is
sponsored and advised on a contractual basis |
|
|
|
HB4011 Enrolled |
- 17 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| by the licensee or any
subsidiary or affiliate of the | 2 |
| licensee.
| 3 |
| The Commissioner may define by rule and regulation any | 4 |
| terms used
in this Act for the efficient and clear | 5 |
| administration of this Act.
| 6 |
| (ee) "First tier subsidiary" shall be defined by regulation
| 7 |
| incorporating the comparable definitions used by the Office of | 8 |
| the
Comptroller of the Currency and the Illinois Commissioner | 9 |
| of Banks
and Real Estate.
| 10 |
| (ff) "Gross delinquency rate" means the quotient | 11 |
| determined by dividing
(1) the sum of (i) the number of | 12 |
| government-insured residential mortgage loans
funded or | 13 |
| purchased by a licensee in the preceding calendar year that are
| 14 |
| delinquent and (ii) the number of conventional residential | 15 |
| mortgage loans
funded or purchased by the licensee in the | 16 |
| preceding calendar year that are
delinquent by (2) the sum of | 17 |
| (i) the number of government-insured residential
mortgage | 18 |
| loans funded or purchased by the licensee in the preceding | 19 |
| calendar
year and (ii) the number of conventional residential | 20 |
| mortgage loans funded or
purchased by the licensee in the | 21 |
| preceding calendar year.
| 22 |
| (gg) "Delinquency rate factor" means the factor set by rule | 23 |
| of the
Commissioner that is multiplied by the average gross | 24 |
| delinquency rate of
licensees, determined annually for the | 25 |
| immediately preceding calendar year, for
the purpose of | 26 |
| determining which licensees shall be examined by the
|
|
|
|
HB4011 Enrolled |
- 18 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| Commissioner pursuant to subsection (b) of Section 4-8 of this | 2 |
| Act.
| 3 |
| (hh) "Loan originator" means any natural person who, for | 4 |
| compensation or in
the expectation of compensation, either | 5 |
| directly or indirectly makes, offers to
make, solicits, places, | 6 |
| or negotiates a residential mortgage loan. This definition | 7 |
| applies only to Section 7-1 of this Act.
| 8 |
| (ii) "Confidential supervisory information" means any | 9 |
| report of examination, visitation, or investigation prepared | 10 |
| by the Commissioner under this Act, any report of examination | 11 |
| visitation, or investigation prepared by the state regulatory | 12 |
| authority of another state that examines a licensee, any | 13 |
| document or record prepared or obtained in connection with or | 14 |
| relating to any examination, visitation, or investigation, and | 15 |
| any record prepared or obtained by the Commissioner to the | 16 |
| extent that the record summarizes or contains information | 17 |
| derived from any report, document, or record described in this | 18 |
| subsection. "Confidential supervisory information" does not | 19 |
| include any information or record routinely prepared by a | 20 |
| licensee and maintained in the ordinary course of business or | 21 |
| any information or record that is required to be made publicly | 22 |
| available pursuant to State or federal law or rule.
| 23 |
| (jj) "Mortgage loan originator" means an individual who for | 24 |
| compensation or gain or in the expectation of compensation or | 25 |
| gain: | 26 |
| (i) takes a residential mortgage loan application; or |
|
|
|
HB4011 Enrolled |
- 19 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| (ii) offers or negotiates terms of a residential | 2 |
| mortgage loan. | 3 |
| "Mortgage loan originator" does not include an individual | 4 |
| engaged solely as a loan processor or underwriter except as | 5 |
| otherwise provided in subsection (d) of Section 7-1A of this | 6 |
| Act. | 7 |
| "Mortgage loan originator" does not include a person or | 8 |
| entity that only performs real estate brokerage activities and | 9 |
| is licensed in accordance with the Real Estate License Act of | 10 |
| 2000, unless the person or entity is compensated by a lender, a | 11 |
| mortgage broker, or other mortgage loan originator, or by any | 12 |
| agent of that lender, mortgage broker, or other mortgage loan | 13 |
| originator. | 14 |
| "Mortgage loan originator" does not include a person or | 15 |
| entity solely involved in extensions of credit relating to | 16 |
| timeshare plans, as that term is defined in Section 101(53D) of | 17 |
| Title 11, United States Code. | 18 |
| (kk) "Depository institution" has the same meaning as in | 19 |
| Section 3 of the Federal Deposit Insurance Act, and includes | 20 |
| any credit union. | 21 |
| (ll) "Dwelling" means a residential structure or mobile | 22 |
| home which contains one to 4 family housing units, or | 23 |
| individual units of condominiums or cooperatives. | 24 |
| (mm) "Immediate family member" means a spouse, child, | 25 |
| sibling, parent, grandparent, or grandchild, and includes | 26 |
| step-parents, step-children, step-siblings, or adoptive |
|
|
|
HB4011 Enrolled |
- 20 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| relationships. | 2 |
| (nn) "Individual" means a natural person. | 3 |
| (oo) "Loan processor or underwriter" means an individual | 4 |
| who performs clerical or support duties as an employee at the | 5 |
| direction of and subject to the supervision and instruction of | 6 |
| a person licensed, or exempt from licensing, under this Act. | 7 |
| "Clerical or support duties" includes subsequent to the receipt | 8 |
| of an application: | 9 |
| (i) the receipt, collection, distribution, and | 10 |
| analysis of information common for the processing or | 11 |
| underwriting of a residential mortgage loan; and | 12 |
| (ii) communicating with a consumer to obtain the | 13 |
| information necessary for the processing or underwriting | 14 |
| of a loan, to the extent that the communication does not | 15 |
| include offering or negotiating loan rates or terms, or | 16 |
| counseling consumers about residential mortgage loan rates | 17 |
| or terms. An individual engaging solely in loan processor | 18 |
| or underwriter activities shall not represent to the | 19 |
| public, through advertising or other means of | 20 |
| communicating or providing information, including the use | 21 |
| of business cards, stationery, brochures, signs, rate | 22 |
| lists, or other promotional items, that the individual can | 23 |
| or will perform any of the activities of a mortgage loan | 24 |
| originator. | 25 |
| (pp) "Nationwide Mortgage Licensing System and Registry" | 26 |
| means a mortgage licensing system developed and maintained by |
|
|
|
HB4011 Enrolled |
- 21 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| the Conference of State Bank Supervisors and the American | 2 |
| Association of Residential Mortgage Regulators for the | 3 |
| licensing and registration of licensed mortgage loan | 4 |
| originators. | 5 |
| (qq) "Nontraditional mortgage product" means any mortgage | 6 |
| product other than a 30-year fixed rate mortgage. | 7 |
| (rr) "Person" means a natural person, corporation, | 8 |
| company, limited liability company, partnership, or | 9 |
| association. | 10 |
| (ss) "Real estate brokerage activity" means any activity | 11 |
| that involves offering or providing real estate brokerage | 12 |
| services to the public, including: | 13 |
| (1) acting as a real estate agent or real estate broker | 14 |
| for a buyer, seller, lessor, or lessee of real property; | 15 |
| (2) bringing together parties interested in the sale, | 16 |
| purchase, lease, rental, or exchange of real property; | 17 |
| (3) negotiating, on behalf of any party, any portion of | 18 |
| a contract relating to the sale, purchase, lease, rental, | 19 |
| or exchange of real property, other than in connection with | 20 |
| providing financing with respect to any such transaction; | 21 |
| (4) engaging in any activity for which a person engaged | 22 |
| in the activity is required to be registered or licensed as | 23 |
| a real estate agent or real estate broker under any | 24 |
| applicable law; or | 25 |
| (5) offering to engage in any activity, or act in any | 26 |
| capacity, described in this subsection (ss). |
|
|
|
HB4011 Enrolled |
- 22 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| (tt) "Registered mortgage loan originator" means any | 2 |
| individual that: | 3 |
| (1) meets the definition of mortgage loan originator | 4 |
| and is an employee of: | 5 |
| (A) a depository institution; | 6 |
| (B) a subsidiary that is: | 7 |
| (i) owned and controlled by a depository | 8 |
| institution; and | 9 |
| (ii) regulated by a federal banking agency; or | 10 |
| (C) an institution regulated by the Farm Credit | 11 |
| Administration; and | 12 |
| (2) is registered with, and maintains a unique | 13 |
| identifier through, the Nationwide Mortgage Licensing | 14 |
| System and Registry. | 15 |
| (uu) "Unique identifier" means a number or other identifier | 16 |
| assigned by protocols established by the Nationwide Mortgage | 17 |
| Licensing System and Registry. | 18 |
| (vv) "Residential mortgage license" means a license issued | 19 |
| pursuant to Section 1-3, 2-2, or 2-6 of this Act. | 20 |
| (ww) "Mortgage loan originator license" means a license | 21 |
| issued pursuant to Section 7-1A, 7-3, or 7-6 of this Act. | 22 |
| (Source: P.A. 93-561, eff. 1-1-04; 93-1018, eff. 1-1-05.)
| 23 |
| (205 ILCS 635/2-2) (from Ch. 17, par. 2322-2)
| 24 |
| Sec. 2-2. Application process; investigation; fee.
| 25 |
| (a) The Commissioner shall issue a license upon completion |
|
|
|
HB4011 Enrolled |
- 23 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| of all of the
following:
| 2 |
| (1) The filing of an application for license with the | 3 |
| Director or the Nationwide Mortgage Licensing System and | 4 |
| Registry as approved by the Director .
| 5 |
| (2) The filing with the Commissioner of a listing of | 6 |
| judgments entered
against, and bankruptcy petitions by, | 7 |
| the license applicant for the
preceding 10 years.
| 8 |
| (3) The payment, in certified funds, of
investigation | 9 |
| and application fees, the total of which shall be in an
| 10 |
| amount equal to $2,700 annually, however, the Commissioner | 11 |
| may
increase the
investigation and application fees by rule | 12 |
| as provided in Section 4-11. To comply with the common | 13 |
| renewal date and requirements of the Nationwide Mortgage | 14 |
| Licensing System and Registry, the term of initial licenses | 15 |
| may be extended or shortened with applicable fees prorated | 16 |
| or combined accordingly.
| 17 |
| (4) Except for a broker applying to renew a license, | 18 |
| the filing of an
audited balance sheet including all | 19 |
| footnotes prepared by a certified public
accountant in | 20 |
| accordance with generally accepted accounting principles | 21 |
| and
generally accepted auditing principles which evidences | 22 |
| that the applicant meets
the net worth requirements of | 23 |
| Section 3-5.
| 24 |
| (5) The filing of proof satisfactory to the | 25 |
| Commissioner that the
applicant, the members thereof if the | 26 |
| applicant is a partnership or
association, the members or |
|
|
|
HB4011 Enrolled |
- 24 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| managers thereof that retain any authority or
| 2 |
| responsibility under the operating agreement if the | 3 |
| applicant is a limited
liability company, or the officers | 4 |
| thereof if the applicant
is a corporation have 3 years | 5 |
| experience preceding application
in real estate finance. | 6 |
| Instead of this requirement, the applicant and the
| 7 |
| applicant's officers or members, as applicable, may
| 8 |
| satisfactorily complete a program of education in real | 9 |
| estate finance and
fair lending, as
approved by the | 10 |
| Commissioner, prior to receiving the
initial license.
The | 11 |
| Commissioner shall promulgate rules regarding proof of | 12 |
| experience
requirements and educational requirements and | 13 |
| the satisfactory completion of
those requirements. The | 14 |
| Commissioner may establish by rule a list of duly
licensed | 15 |
| professionals and others who may be exempt from this | 16 |
| requirement.
| 17 |
| (6) An investigation of the averments required by | 18 |
| Section 2-4, which
investigation must allow the | 19 |
| Commissioner to issue positive findings stating
that the | 20 |
| financial responsibility, experience, character, and | 21 |
| general fitness
of the license applicant and of the members | 22 |
| thereof if the license applicant is
a partnership or | 23 |
| association, of the officers and directors thereof if the
| 24 |
| license applicant is a corporation, and of the managers and | 25 |
| members that retain
any authority or responsibility under | 26 |
| the operating agreement if the license
applicant is a |
|
|
|
HB4011 Enrolled |
- 25 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| limited liability company are such as to command the | 2 |
| confidence
of the community and to warrant belief that the | 3 |
| business will be operated
honestly, fairly and efficiently | 4 |
| within the purpose of this Act. If the
Commissioner shall | 5 |
| not so find, he or she shall not issue such license, and he
| 6 |
| or she shall notify the license applicant of the denial. | 7 |
| The Commissioner may impose conditions on a license if the | 8 |
| Commissioner determines that the conditions are necessary or | 9 |
| appropriate. These conditions shall be imposed in writing and | 10 |
| shall continue in effect for the period prescribed by the | 11 |
| Commissioner.
| 12 |
| (b) All licenses shall be issued in duplicate with one copy
| 13 |
| being transmitted to the license applicant and the second being
| 14 |
| retained with the Commissioner .
| 15 |
| Upon receipt of such license, a residential mortgage | 16 |
| licensee shall be
authorized to engage in the business | 17 |
| regulated by this Act. Such license
shall remain in full force | 18 |
| and effect until it expires without renewal, is
surrendered by | 19 |
| the licensee or revoked or suspended as hereinafter provided.
| 20 |
| (Source: P.A. 93-32, eff. 7-1-03; 93-1018, eff. 1-1-05.)
| 21 |
| (205 ILCS 635/2-3) (from Ch. 17, par. 2322-3)
| 22 |
| Sec. 2-3. Application form.
| 23 |
| (a) Application for a residential mortgage license must be | 24 |
| made in
accordance with Section 2-6 and, if applicable, in | 25 |
| accordance with requirements of the Nationwide Mortgage |
|
|
|
HB4011 Enrolled |
- 26 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| Licensing System and Registry . The application shall be in | 2 |
| writing, under oath,
and on a form obtained from and prescribed | 3 |
| by the Commissioner , or may be submitted electronically, with | 4 |
| attestation, to the Nationwide Mortgage Licensing System and | 5 |
| Registry .
| 6 |
| (b) The application shall contain the name and complete | 7 |
| business and
residential address or addresses of the license | 8 |
| applicant. If the license
applicant is a partnership, | 9 |
| association, corporation or other form of
business | 10 |
| organization, the application shall contain the names and | 11 |
| complete
business and residential addresses of each member, | 12 |
| director and principal
officer thereof. Such application shall | 13 |
| also include a description of the
activities of the license | 14 |
| applicant, in such detail and for such periods,
as the | 15 |
| Commissioner may require, including all of the following:
| 16 |
| (1) An affirmation of financial solvency noting such | 17 |
| capitalization
requirements as may be required by the | 18 |
| Commissioner, and access to such
credit as may be required | 19 |
| by the Commissioner.
| 20 |
| (2) An affirmation that the license applicant or its | 21 |
| members, directors or
principals as may be appropriate, are | 22 |
| at least 18 years of age.
| 23 |
| (3) Information as to the character, fitness, | 24 |
| financial and business
responsibility, background, | 25 |
| experience, and criminal record of any
(i) person, entity, | 26 |
| or ultimate equitable owner that owns or controls,
directly |
|
|
|
HB4011 Enrolled |
- 27 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| or indirectly, 10% or more of any class of stock of the | 2 |
| license
applicant; (ii) person, entity, or ultimate | 3 |
| equitable owner that is not a
depository institution, as | 4 |
| defined in Section 1007.50 of the Savings Bank
Act, that | 5 |
| lends, provides, or infuses, directly or indirectly, in any | 6 |
| way,
funds to or into a license applicant, in an amount | 7 |
| equal to or more than 10% of
the license applicant's net | 8 |
| worth; (iii) person, entity, or ultimate equitable
owner | 9 |
| that controls, directly or indirectly, the election of 25% | 10 |
| or more of the
members of the board of directors of a | 11 |
| license applicant; or (iv) person,
entity, or ultimate | 12 |
| equitable owner that the Commissioner finds influences
| 13 |
| management of the license applicant.
| 14 |
| (4) Upon written request by the licensee and | 15 |
| notwithstanding the
provisions of paragraphs (1), (2), and | 16 |
| (3) of this subsection, the Commissioner
may permit the | 17 |
| licensee to omit all or part of the information required by
| 18 |
| those paragraphs if, in lieu of the omitted information, | 19 |
| the licensee submits
an affidavit stating that the | 20 |
| information submitted on the licensee's previous
renewal | 21 |
| application is still true and accurate. The Commissioner | 22 |
| may
promulgate rules prescribing the form and content of | 23 |
| the affidavit that are
necessary to accomplish the purposes | 24 |
| of this Section.
| 25 |
| (5) Such other information as required by regulations | 26 |
| of the
Commissioner.
|
|
|
|
HB4011 Enrolled |
- 28 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| (Source: P.A. 89-355, eff. 8-17-95.)
| 2 |
| (205 ILCS 635/2-4) (from Ch. 17, par. 2322-4)
| 3 |
| Sec. 2-4. Averments of Licensee. Each application for | 4 |
| license or for the
renewal of a license shall be accompanied by | 5 |
| the following averments stating
that the applicant:
| 6 |
| (a) Will maintain at least one full service office | 7 |
| within the
State of Illinois pursuant to Section 3-4 of | 8 |
| this Act;
| 9 |
| (b) Will maintain staff reasonably adequate to meet the | 10 |
| requirements of
Section 3-4 of this Act;
| 11 |
| (c) Will keep and maintain for 36 months the same | 12 |
| written records
as required by the federal Equal Credit | 13 |
| Opportunity Act, and any other
information required by | 14 |
| regulations of the Commissioner regarding any home
| 15 |
| mortgage in the course of the conduct of its residential | 16 |
| mortgage business;
| 17 |
| (d) Will file with the Commissioner or Nationwide | 18 |
| Mortgage Licensing System and Registry as applicable , when | 19 |
| due, any report or reports
which it is required to file | 20 |
| under any of the provisions of this Act;
| 21 |
| (e) Will not engage, whether as principal or agent, in | 22 |
| the practice of
rejecting residential mortgage | 23 |
| applications without reasonable cause, or
varying terms or | 24 |
| application procedures without reasonable cause, for home
| 25 |
| mortgages on real estate within any specific geographic |
|
|
|
HB4011 Enrolled |
- 29 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| area from the terms
or procedures generally provided by the | 2 |
| licensee within other geographic
areas of the State;
| 3 |
| (f) Will not engage in fraudulent home mortgage | 4 |
| underwriting practices;
| 5 |
| (g) Will not make payment, whether directly or | 6 |
| indirectly, of any kind
to any in house or fee appraiser of | 7 |
| any government or private money lending
agency with which | 8 |
| an application for a home mortgage has been filed for the
| 9 |
| purpose of influencing the independent judgment of the | 10 |
| appraiser with respect
to the value of any real estate | 11 |
| which is to be covered by such home mortgage;
| 12 |
| (h) Has filed tax returns (State and Federal) for the | 13 |
| past 3
years or filed with the Commissioner an accountant's | 14 |
| or attorney's
statement as to why no return was filed;
| 15 |
| (i) Will not engage in any discrimination or redlining | 16 |
| activities
prohibited by Section 3-8 of this Act;
| 17 |
| (j) Will not knowingly make any false promises likely | 18 |
| to influence or
persuade, or pursue a course of | 19 |
| misrepresentation and false promises
through agents, | 20 |
| solicitors, advertising or otherwise;
| 21 |
| (k) Will not knowingly misrepresent, circumvent or | 22 |
| conceal, through
whatever subterfuge or device, any of the | 23 |
| material particulars or the
nature thereof, regarding a | 24 |
| transaction to which it is a party to the
injury of another | 25 |
| party thereto;
| 26 |
| (l) Will disburse funds in accordance with its |
|
|
|
HB4011 Enrolled |
- 30 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| agreements;
| 2 |
| (m) Has not committed a crime against the law of this | 3 |
| State, any other
state or of the United States, involving | 4 |
| moral turpitude, fraudulent or
dishonest dealing, and that | 5 |
| no final judgment has been entered against it in
a civil | 6 |
| action upon grounds of fraud, misrepresentation or deceit | 7 |
| which has
not been previously reported to the Commissioner;
| 8 |
| (n) Will account or deliver to the owner upon request | 9 |
| any person any personal property such as
money, fund, | 10 |
| deposit, check, draft, mortgage, other document or thing of
| 11 |
| value , which has come into its possession, and which is not | 12 |
| its property,
or which it is not in law or equity entitled | 13 |
| to retain under the
circumstances , at the time which has | 14 |
| been agreed upon or is required
by law, or, in the absence | 15 |
| of a fixed time, upon demand of the person
entitled to such | 16 |
| accounting and delivery ;
| 17 |
| (o) Has not engaged in any conduct which would be cause | 18 |
| for denial of a
license;
| 19 |
| (p) Has not become insolvent;
| 20 |
| (q) Has not submitted an application for a license | 21 |
| under this Act which
contains a material misstatement;
| 22 |
| (r) Has not demonstrated by course of conduct, | 23 |
| negligence or incompetence
in performing any act for which | 24 |
| it is required to hold a license under this
Act;
| 25 |
| (s) Will advise the Commissioner in writing , or the | 26 |
| Nationwide Mortgage Licensing System and Registry as |
|
|
|
HB4011 Enrolled |
- 31 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| applicable, of any changes to the
information submitted on | 2 |
| the most recent application for license within 30
days of | 3 |
| said change. The written notice must be signed in the same | 4 |
| form as
the application for license being amended;
| 5 |
| (t) Will comply with the provisions of this Act, or | 6 |
| with any lawful
order, rule or regulation made or issued | 7 |
| under the provisions of this Act;
| 8 |
| (u) Will submit to periodic examination by the | 9 |
| Commissioner as required
by this Act;
| 10 |
| (v) Will advise the Commissioner in writing of | 11 |
| judgments entered
against, and bankruptcy petitions by, | 12 |
| the license applicant within 5
days of occurrence;
| 13 |
| (w) Will advise the Commissioner in writing within 30 | 14 |
| days of any request made to when the
license applicant | 15 |
| requests a licensee under this Act to repurchase a loan in | 16 |
| a manner that completely and clearly identifies to whom the | 17 |
| request was made, the loans involved, and the reason , and
| 18 |
| the circumstances therefor;
| 19 |
| (x) Will advise the Commissioner in writing within 30 | 20 |
| days of any request from any entity when the
license | 21 |
| applicant is requested by another entity to repurchase a | 22 |
| loan in a manner that completely and clearly identifies to | 23 |
| whom the request was made, the loans involved, and the | 24 |
| reason for the request , and the
circumstances therefor ;
| 25 |
| (y) Will at all times act in a manner consistent with | 26 |
| subsections (a) and
(b) of Section 1-2 of this Act; and
|
|
|
|
HB4011 Enrolled |
- 32 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| (z) Will not knowingly hire or employ a loan originator | 2 |
| who is
not registered , or mortgage loan originator who is | 3 |
| not licensed, with the Commissioner as required under | 4 |
| Section 7-1 or Section 7-1A, as applicable, of this Act.
| 5 |
| A licensee who fails to fulfill obligations of an averment, | 6 |
| to comply with
averments made, or otherwise violates any of the | 7 |
| averments made under this
Section shall be subject to the | 8 |
| penalties in Section 4-5 of this Act.
| 9 |
| (Source: P.A. 95-331, eff. 8-21-07.)
| 10 |
| (205 ILCS 635/2-6) (from Ch. 17, par. 2322-6)
| 11 |
| Sec. 2-6. License issuance and renewal; fee.
| 12 |
| (a) Beginning July 1, 2003, licenses shall be renewed every | 13 |
| year on the
anniversary of the date of issuance of the original | 14 |
| license , or the common renewal date of the Nationwide Mortgage | 15 |
| Licensing System and Registry as adopted by the Director. To | 16 |
| comply with the common renewal date of the Nationwide Mortgage | 17 |
| Licensing System and Registry, the term of existing licenses | 18 |
| may be extended or shortened with applicable fees prorated | 19 |
| accordingly .
Properly completed renewal application forms and | 20 |
| filing fees must be received
by the Commissioner 60 days prior | 21 |
| to the renewal date.
| 22 |
| (b) It shall be the responsibility of each licensee to | 23 |
| accomplish renewal
of its license; failure of the licensee to | 24 |
| receive renewal forms absent a
request sent by certified mail | 25 |
| for such forms will not waive said
responsibility. Failure by a |
|
|
|
HB4011 Enrolled |
- 33 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| licensee to submit a properly completed
renewal application | 2 |
| form and fees in a timely fashion, absent a written
extension | 3 |
| from the Commissioner, will result in the assessment of
| 4 |
| additional fees, as follows:
| 5 |
| (1) A fee of $750 will be assessed to the licensee 30 | 6 |
| days
after the
proper renewal date and $1,500 each month | 7 |
| thereafter, until the
license is
either renewed or expires | 8 |
| pursuant to Section 2-6, subsections (c) and (d),
of this | 9 |
| Act.
| 10 |
| (2) Such fee will be assessed without prior notice to | 11 |
| the licensee, but
will be assessed only in cases wherein | 12 |
| the Commissioner has in his or her
possession documentation | 13 |
| of the licensee's continuing activity for which
the | 14 |
| unrenewed license was issued.
| 15 |
| (c) A license which is not renewed by the date required in | 16 |
| this Section
shall automatically become inactive. No activity | 17 |
| regulated by this Act
shall be conducted by the licensee when a | 18 |
| license becomes inactive. The Commissioner may require the | 19 |
| licensee to provide a plan for the disposition of any | 20 |
| residential mortgage loans not closed or funded when the | 21 |
| license becomes inactive. The Commissioner may allow a licensee | 22 |
| with an inactive license to conduct activities regulated by | 23 |
| this Act for the sole purpose of assisting borrowers in the | 24 |
| closing or funding of loans for which the loan application was | 25 |
| taken from a borrower while the license was active. An
inactive | 26 |
| license may be reactivated by the Commissioner upon payment of |
|
|
|
HB4011 Enrolled |
- 34 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| the renewal fee, and payment
of a reactivation fee equal to the | 2 |
| renewal fee.
| 3 |
| (d) A license which is not renewed within one year of | 4 |
| becoming inactive
shall expire.
| 5 |
| (e) A licensee ceasing an activity or activities regulated | 6 |
| by this Act
and desiring to no longer be licensed shall so | 7 |
| inform the Commissioner in
writing and, at the same time, | 8 |
| convey the license and all other symbols or
indicia of | 9 |
| licensure. The licensee shall include a plan for the withdrawal
| 10 |
| from regulated business, including a timetable for the | 11 |
| disposition of the
business , and comply with the surrender | 12 |
| guidelines or requirements of the Director . Upon receipt of | 13 |
| such written notice, the Commissioner shall post the | 14 |
| cancellation or issue
a certified statement canceling the | 15 |
| license.
| 16 |
| (Source: P.A. 93-32, eff. 7-1-03; 93-561, eff. 1-1-04; 93-1018, | 17 |
| eff. 1-1-05.)
| 18 |
| (205 ILCS 635/3-1) (from Ch. 17, par. 2323-1)
| 19 |
| Sec. 3-1. Bonds of licensees.
| 20 |
| (a) Every licensee, with respect to any person appointed or | 21 |
| elected
to any position requiring the receipt of payment, | 22 |
| management, or use of money
belonging to a residential mortgage | 23 |
| licensee engaged in the activities of
originating, servicing, | 24 |
| or purchasing mortgage loans or whose duties permit him
or her | 25 |
| to have access to or custody of any of its money or securities |
|
|
|
HB4011 Enrolled |
- 35 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| or
custody of any money or securities belonging to third | 2 |
| parties or whose duties
permit him or her regularly to make | 3 |
| entries in the books or other records of a
licensee, shall, | 4 |
| before assuming his or her duties, maintain a fidelity bond in
| 5 |
| the amount of $100,000 by some fidelity insurance company | 6 |
| licensed to do
business in this State.
| 7 |
| (b) Each bond shall be for any loss the licensee may | 8 |
| sustain in money or
other property through the commission of | 9 |
| any dishonest or criminal act or
omission by any person | 10 |
| required to be bonded, whether committed alone or in
concert | 11 |
| with another. The bond shall be in the form and amount approved
| 12 |
| by the Commissioner who may at any time require one or more | 13 |
| additional
bonds. A true copy of every bond, including all | 14 |
| riders and endorsements
executed subsequent to the effective | 15 |
| date of the bond, shall be filed at
all times with the | 16 |
| Commissioner. Each bond shall provide that a
cancellation | 17 |
| thereof shall not become effective unless and until
30 days | 18 |
| notice in writing first shall have been given to the | 19 |
| Commissioner
unless he or she shall have approved the | 20 |
| cancellation earlier.
If the Commissioner believes the | 21 |
| licensee's business is being conducted in
an unsafe manner due | 22 |
| to the lack of bonds or the inadequacy of bonds,
he or she may | 23 |
| proceed against the licensee as provided for in Section 4-5.
| 24 |
| (c) All licensees shall maintain a bond in accordance with | 25 |
| this subsection.
Each bond shall be for the recovery of | 26 |
| expenses, fines, or fees due to or
levied by the Commissioner |
|
|
|
HB4011 Enrolled |
- 36 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| in accordance with this Act. The bond shall be
payable when the | 2 |
| licensee fails to comply with any provisions of this Act and
| 3 |
| shall be in the form of a surety or licensure bond in the | 4 |
| amount and form as
prescribed by the Commissioner pursuant to | 5 |
| rules and regulations. The bond
shall be payable to the Office | 6 |
| of Banks and Real Estate and shall be issued by some insurance | 7 |
| company
authorized to do business in this State. A copy of the | 8 |
| bond, including any and
all riders and endorsements executed | 9 |
| subsequent to the effective date of the
bond, shall be placed | 10 |
| on file with the Office of Banks and Real Estate within 10 days | 11 |
| of the
execution thereof.
| 12 |
| (d) The Commissioner may promulgate rules with respect to | 13 |
| bonding
requirements for residential mortgage licensees and | 14 |
| their mortgage loan originators that are
reasonable and | 15 |
| necessary to accomplish the purposes of this Act.
| 16 |
| (Source: P.A. 89-508, eff. 7-3-96.)
| 17 |
| (205 ILCS 635/3-2) (from Ch. 17, par. 2323-2)
| 18 |
| Sec. 3-2. Annual audit.
| 19 |
| (a) At the licensee's fiscal year-end, but in no
case more | 20 |
| than 12 months after the last audit conducted pursuant to this
| 21 |
| Section, except as otherwise provided in this Section, it shall | 22 |
| be
mandatory for each residential mortgage licensee to
cause | 23 |
| its books and accounts to be audited by a certified public | 24 |
| accountant
not connected with such licensee. The books and | 25 |
| records of all licensees
under this Act shall be maintained on |
|
|
|
HB4011 Enrolled |
- 37 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| an accrual basis. The audit must be
sufficiently comprehensive | 2 |
| in scope to permit
the expression of an opinion on the | 3 |
| financial statements, which must be
prepared in accordance with | 4 |
| generally accepted accounting principles, and
must be | 5 |
| performed in accordance with generally accepted auditing | 6 |
| standards. Notwithstanding
the requirements of this | 7 |
| subsection, a licensee that is a first tier subsidiary
may | 8 |
| submit audited consolidated financial statements of its parent | 9 |
| as long as
the consolidated statements are supported by | 10 |
| consolidating statements. The
licensee's chief financial | 11 |
| officer shall attest to the licensee's financial
statements | 12 |
| disclosed in the consolidating statements.
| 13 |
| (b) As used herein, the term "expression of opinion" | 14 |
| includes either
(1) an unqualified opinion, (2) a qualified | 15 |
| opinion, (3) a disclaimer of
opinion, or (4) an adverse | 16 |
| opinion.
| 17 |
| (c) If a qualified or adverse opinion is expressed or if an | 18 |
| opinion is
disclaimed, the reasons therefore must be fully | 19 |
| explained. An opinion,
qualified as to a scope limitation, | 20 |
| shall not be acceptable.
| 21 |
| (d) The most recent audit report shall be filed with the
| 22 |
| Commissioner within 90 days after the end of the licensee's | 23 |
| fiscal year , or with the Nationwide Mortgage Licensing System | 24 |
| and Registry, if applicable, pursuant to Mortgage Call Report | 25 |
| requirements . The report
filed with the Commissioner shall be | 26 |
| certified by the certified public
accountant conducting the |
|
|
|
HB4011 Enrolled |
- 38 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| audit. The Commissioner may promulgate rules
regarding late | 2 |
| audit reports.
| 3 |
| (e) If any licensee required to make an audit shall fail to | 4 |
| cause an
audit to be made, the Commissioner shall cause the | 5 |
| same to be made by a
certified public accountant at the | 6 |
| licensee's expense. The Commissioner
shall select such | 7 |
| certified public accountant by advertising for bids or
by such | 8 |
| other fair and impartial means as he or she establishes by | 9 |
| regulation.
| 10 |
| (f) In lieu of the audit or compilation financial statement
| 11 |
| required by this Section, a licensee shall submit and the | 12 |
| Commissioner may
accept any audit made in conformance with the | 13 |
| audit
requirements of the U.S. Department of Housing and Urban | 14 |
| Development.
| 15 |
| (g) With respect to licensees who solely broker residential | 16 |
| mortgage
loans as defined in subsection (o) of Section 1-4, | 17 |
| instead of the audit
required by this Section, the Commissioner | 18 |
| may
accept
compilation financial statements prepared at least | 19 |
| every 12 months, and
the compilation financial statement must | 20 |
| be prepared by an independent
certified public accountant | 21 |
| licensed under the Illinois Public Accounting Act
or by an | 22 |
| equivalent state licensing law with full disclosure in | 23 |
| accordance with generally accepted accounting
principals and | 24 |
| must be submitted within 90 days after the end of
the | 25 |
| licensee's fiscal year , or with the Nationwide Mortgage | 26 |
| Licensing System and Registry, if applicable, pursuant to |
|
|
|
HB4011 Enrolled |
- 39 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| Mortgage Call Report requirements . If a
licensee
under this | 2 |
| Section fails to file a compilation as required, the | 3 |
| Commissioner
shall cause an audit of the licensee's books and | 4 |
| accounts to be made by a
certified public accountant at the | 5 |
| licensee's expense. The Commissioner shall
select the | 6 |
| certified public accountant by advertising for bids or by such | 7 |
| other
fair and impartial means as he or she establishes by | 8 |
| rule. A licensee who
files false or misleading compilation | 9 |
| financial statements is guilty of a
business offense and shall | 10 |
| be fined not less than $5,000.
| 11 |
| (h) The workpapers of the certified public accountants | 12 |
| employed
by each
licensee for purposes of this Section are to | 13 |
| be made available to the
Commissioner or the Commissioner's | 14 |
| designee upon request and may be
reproduced by the Commissioner | 15 |
| or the Commissioner's designee to enable to
the Commissioner to | 16 |
| carry out the purposes of this Act.
| 17 |
| (i) Notwithstanding any other provision of this Section, if | 18 |
| a licensee
relying on subsection (g) of this Section causes its | 19 |
| books to be audited at any
other time or causes its financial | 20 |
| statements to be reviewed, a complete copy
of the audited or | 21 |
| reviewed financial statements shall be delivered to the
| 22 |
| Commissioner at the time of the annual license renewal payment | 23 |
| following
receipt by the licensee of the audited or reviewed | 24 |
| financial statements. All workpapers shall be made available to | 25 |
| the
Commissioner upon request. The financial statements and | 26 |
| workpapers may be
reproduced by the Commissioner or the |
|
|
|
HB4011 Enrolled |
- 40 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| Commissioner's designee to carry out the
purposes of this Act.
| 2 |
| (Source: P.A. 93-561, eff. 1-1-04; 93-1018, eff. 1-1-05.)
| 3 |
| (205 ILCS 635/3-4) (from Ch. 17, par. 2323-4)
| 4 |
| Sec. 3-4. Office and staff within the State.
| 5 |
| (a) A licensee whose principal place of business is located | 6 |
| in the State
of Illinois shall
maintain at least one full | 7 |
| service office with
staff reasonably adequate to handle | 8 |
| efficiently communications, questions,
and all other matters | 9 |
| relating to any application for a home mortgage or an
existing | 10 |
| home mortgage with respect
to which such licensee is performing | 11 |
| services, regardless of kind, for any
borrower or lender, note | 12 |
| owner or holder, or for himself or herself while
engaged in the | 13 |
| residential
mortgage business. Offices shall not be located in | 14 |
| any real estate, retail, or financial business establishment, | 15 |
| unless separated from the other business by a separate and | 16 |
| distinct area within the establishment. The location and | 17 |
| operation of a full service office shall be in compliance with | 18 |
| any applicable zoning laws or ordinances and home office or | 19 |
| business regulations. The Director may require a licensee | 20 |
| operating from a home or residentially zoned office to provide | 21 |
| another approved location that is suitable to conduct an | 22 |
| examination under Sections 4-2 and 4-7 of the Act. This | 23 |
| subsection (a) does not limit the Director's authority to | 24 |
| examine at any other office, facility or location of the | 25 |
| licensee as permitted by the Act.
|
|
|
|
HB4011 Enrolled |
- 41 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| (b) In lieu of maintaining a full service office in the | 2 |
| State of
Illinois, and subject to the rules of the Department,
| 3 |
| a licensee whose principal place of business is located outside | 4 |
| the
State of Illinois may comply with all of the following | 5 |
| requirements: | 6 |
| (1) provide, upon the Director's request and notice, an | 7 |
| approved location that is suitable to conduct an | 8 |
| examination under Sections 4-2 and 4-7 of the Act. This | 9 |
| subsection (b) does not limit the Director's authority to | 10 |
| examine at any other office, facility or location of the | 11 |
| licensee as permitted by the Act. | 12 |
| (2)
must submit a certified audit as required in | 13 |
| Section 3-2 of this Act
evidencing a minimum net worth of | 14 |
| $150,000 $100,000 , which must be maintained at all
times, | 15 |
| and shall submit and maintain a fidelity bond in the amount | 16 |
| of
$100,000.
| 17 |
| (Source: P.A. 93-1018, eff. 1-1-05.)
| 18 |
| (205 ILCS 635/4-1) (from Ch. 17, par. 2324-1)
| 19 |
| Sec. 4-1. Commissioner of Banks and Real Estate; functions, | 20 |
| powers, and duties. The functions,
powers, and duties of the | 21 |
| Commissioner of Banks and Real Estate shall include the | 22 |
| following:
| 23 |
| (a) To issue or refuse to issue any license as provided by | 24 |
| this Act;
| 25 |
| (b) To revoke or suspend for cause any license issued under |
|
|
|
HB4011 Enrolled |
- 42 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| this Act;
| 2 |
| (c) To keep records of all licenses issued under this Act;
| 3 |
| (d) To receive, consider, investigate, and act upon | 4 |
| complaints made by
any person in connection with any | 5 |
| residential mortgage licensee in this State;
| 6 |
| (e) To consider and act upon any recommendations from the | 7 |
| Residential
Mortgage Board;
| 8 |
| (f) To prescribe the forms of and receive:
| 9 |
| (1) applications for licenses; and
| 10 |
| (2) all reports and all books and records required to | 11 |
| be made by
any licensee under this Act, including annual | 12 |
| audited financial statements
and annual reports of | 13 |
| mortgage activity;
| 14 |
| (g) To adopt rules and regulations necessary and proper for | 15 |
| the
administration of this Act;
| 16 |
| (h) To subpoena documents and witnesses and compel their | 17 |
| attendance and
production, to administer oaths, and to require | 18 |
| the production of any books,
papers, or other materials | 19 |
| relevant to any inquiry authorized by this Act;
| 20 |
| (h-1) To issue orders against any person, if the | 21 |
| Commissioner has reasonable cause to believe that an unsafe, | 22 |
| unsound, or unlawful practice has occurred, is occurring, or is | 23 |
| about to occur, if any person has violated, is violating, or is | 24 |
| about to violate any law, rule, or written agreement with the | 25 |
| Commissioner, or for the purpose of administering the | 26 |
| provisions of this Act and any rule adopted in accordance with |
|
|
|
HB4011 Enrolled |
- 43 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| the Act; | 2 |
| (h-2) To address any inquiries to any licensee, or the | 3 |
| officers thereof, in relation to its activities and conditions, | 4 |
| or any other matter connected with its affairs, and it shall be | 5 |
| the duty of any licensee or person so addressed, to promptly | 6 |
| reply in writing to such inquiries. The Commissioner may also | 7 |
| require reports from any licensee at any time the Commissioner | 8 |
| may deem desirable;
| 9 |
| (i) To require information with regard to any license | 10 |
| applicant
as he or she may deem desirable, with due regard to | 11 |
| the paramount interests
of the public as to the experience, | 12 |
| background, honesty, truthfulness,
integrity, and competency | 13 |
| of the license applicant as to financial
transactions involving | 14 |
| primary or subordinate mortgage financing, and where
the | 15 |
| license applicant is an entity other than an individual, as to | 16 |
| the
honesty, truthfulness, integrity, and competency of any | 17 |
| officer or director
of the corporation, association, or other | 18 |
| entity, or the members of a
partnership;
| 19 |
| (j) To examine the books and records of every licensee | 20 |
| under this Act at
intervals as specified in Section 4-2;
| 21 |
| (k) To enforce provisions of this Act;
| 22 |
| (l) To levy fees, fines, and charges for services performed | 23 |
| in administering
this Act; the aggregate of all fees collected | 24 |
| by the Commissioner on and after
the effective date of this Act | 25 |
| shall be paid promptly after receipt of the
same, accompanied | 26 |
| by a detailed statement thereof, into the Savings and
|
|
|
|
HB4011 Enrolled |
- 44 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| Residential Finance Regulatory Fund; the amounts deposited | 2 |
| into that Fund shall
be used for the ordinary and contingent | 3 |
| expenses of the Office of Banks and
Real Estate. Nothing in | 4 |
| this Act shall prevent continuing the practice of paying
| 5 |
| expenses involving salaries, retirement, social security, and | 6 |
| State-paid
insurance of State officers by appropriation from | 7 |
| the General Revenue Fund.
| 8 |
| (m) To appoint examiners, supervisors, experts, and | 9 |
| special assistants as
needed to effectively and efficiently | 10 |
| administer this Act;
| 11 |
| (n) To conduct hearings for the purpose of:
| 12 |
| (1) appeals of orders of the Commissioner;
| 13 |
| (2) suspensions or revocations of licenses, or fining | 14 |
| of licensees;
| 15 |
| (3) investigating:
| 16 |
| (i) complaints against licensees; or
| 17 |
| (ii) annual gross delinquency rates; and
| 18 |
| (4) carrying out the purposes of this Act;
| 19 |
| (o) To exercise exclusive visitorial power over a licensee | 20 |
| unless otherwise authorized by this Act or as vested in the | 21 |
| courts, or upon prior consultation with the Commissioner, a | 22 |
| foreign residential mortgage regulator with an appropriate | 23 |
| supervisory interest in the parent or affiliate of a licensee;
| 24 |
| (p) To enter into cooperative agreements with state | 25 |
| regulatory authorities of other states to provide for | 26 |
| examination of corporate offices or branches of those states |
|
|
|
HB4011 Enrolled |
- 45 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| and to accept reports of such examinations;
| 2 |
| (q) To assign an examiner or examiners to monitor the | 3 |
| affairs of a licensee with whatever frequency the Commissioner | 4 |
| determines appropriate and to charge the licensee for | 5 |
| reasonable and necessary expenses of the Commissioner, if in | 6 |
| the opinion of the Commissioner an emergency exists or appears | 7 |
| likely to occur; and
| 8 |
| (r) To impose civil penalties of up to $50 per day against | 9 |
| a licensee for failing to respond to a regulatory request or | 10 |
| reporting requirement.
| 11 |
| (s) To enter into agreements in connection with the | 12 |
| Nationwide Mortgage Licensing System and Registry. | 13 |
| (Source: P.A. 93-1018, eff. 1-1-05.)
| 14 |
| (205 ILCS 635/4-2) (from Ch. 17, par. 2324-2)
| 15 |
| Sec. 4-2. Examination; prohibited activities.
| 16 |
| (a) The business affairs of a licensee under this Act shall | 17 |
| be examined
for compliance with this Act as often as the | 18 |
| Commissioner deems necessary and
proper. The Commissioner | 19 |
| shall promulgate rules with respect to the frequency
and manner | 20 |
| of examination. The Commissioner shall appoint a suitable | 21 |
| person
to perform such
examination. The Commissioner and his | 22 |
| appointees may examine the
entire
books, records, documents, | 23 |
| and operations of each licensee and its subsidiary, affiliate, | 24 |
| or agent, and may examine
any of the licensee's or its | 25 |
| subsidiary's, affiliate's, or agent's officers, directors, |
|
|
|
HB4011 Enrolled |
- 46 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| employees and agents under oath. For purposes of this Section, | 2 |
| "agent" includes service providers such as accountants, | 3 |
| closing services providers, providers of outsourced services | 4 |
| such as call centers, marketing consultants, and loan | 5 |
| processors, even if exempt from licensure under this Act. This | 6 |
| Section does not apply to an attorney's privileged work product | 7 |
| or communications.
| 8 |
| (b) The Commissioner shall prepare a
sufficiently
detailed
| 9 |
| report of each
licensee's examination, shall issue a copy of | 10 |
| such report to each
licensee's principals, officers, or | 11 |
| directors and shall take appropriate
steps to ensure correction | 12 |
| of violations of this Act.
| 13 |
| (c) Affiliates of a licensee shall be subject to | 14 |
| examination by the
Commissioner on the same terms as the | 15 |
| licensee, but only when reports
from, or examination of a | 16 |
| licensee provides for documented evidence of
unlawful activity | 17 |
| between a licensee and affiliate benefiting, affecting or
| 18 |
| deriving from the activities regulated by this Act.
| 19 |
| (d) The expenses of any examination of the licensee and | 20 |
| affiliates shall
be borne by the licensee and assessed by the | 21 |
| Commissioner as established
by regulation.
| 22 |
| (e) Upon completion of the examination, the Commissioner | 23 |
| shall issue a
report to the licensee. All confidential | 24 |
| supervisory information, including the examination report
and | 25 |
| the work papers
of the report, shall belong to the | 26 |
| Commissioner's office and may not be
disclosed to anyone other |
|
|
|
HB4011 Enrolled |
- 47 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| than the licensee, law enforcement officials or other
| 2 |
| regulatory agencies that have an appropriate regulatory | 3 |
| interest as determined by the Commissioner, or to a party | 4 |
| presenting a lawful subpoena to the Office of the
Commissioner. | 5 |
| The Commissioner may immediately appeal to the court of | 6 |
| jurisdiction the disclosure of such confidential supervisory | 7 |
| information and seek a stay of the subpoena pending the outcome | 8 |
| of the appeal. Reports required of licensees by the | 9 |
| Commissioner under this Act
and results of examinations | 10 |
| performed by the Commissioner under this Act shall
be the | 11 |
| property of only the Commissioner, but may be shared with the | 12 |
| licensee. Access under this
Act to the books and records of | 13 |
| each licensee shall be limited to the
Commissioner and his | 14 |
| agents as provided in this Act and to the licensee and its
| 15 |
| authorized agents and designees. No other person shall have | 16 |
| access to the
books and records of a licensee under this Act. | 17 |
| Any person upon whom a demand for production of confidential | 18 |
| supervisory information is made, whether by subpoena, order, or | 19 |
| other judicial or administrative process, must withhold | 20 |
| production of the confidential supervisory information and | 21 |
| must notify the Commissioner of the demand, at which time the | 22 |
| Commissioner is authorized to intervene for the purpose of | 23 |
| enforcing the limitations of this Section or seeking the | 24 |
| withdrawal or termination of the attempt to compel production | 25 |
| of the confidential supervisory information. The Commissioner | 26 |
| may impose any conditions and limitations on the disclosure of |
|
|
|
HB4011 Enrolled |
- 48 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| confidential supervisory information that are necessary to | 2 |
| protect the confidentiality of such information. Except as | 3 |
| authorized by the Commissioner, no person obtaining access to | 4 |
| confidential supervisory information may make a copy of the | 5 |
| confidential supervisory information. The Commissioner may | 6 |
| condition a decision to disclose confidential supervisory | 7 |
| information on entry of a protective order by the court or | 8 |
| administrative tribunal presiding in the particular case or on | 9 |
| a written agreement of confidentiality. In a case in which a | 10 |
| protective order or agreement has already been entered between | 11 |
| parties other than the Commissioner, the Commissioner may | 12 |
| nevertheless condition approval for release of confidential | 13 |
| supervisory information upon the inclusion of additional or | 14 |
| amended provisions in the protective order. The Commissioner | 15 |
| may authorize a party who obtained the records for use in one | 16 |
| case to provide them to another party in another case, subject | 17 |
| to any conditions that the Commissioner may impose on either or | 18 |
| both parties. The requestor shall promptly notify other parties | 19 |
| to a case of the release of confidential supervisory | 20 |
| information obtained and, upon entry of a protective order, | 21 |
| shall provide copies of confidential supervisory information | 22 |
| to the other parties.
| 23 |
| (f) The Commissioner, deputy commissioners, and employees
| 24 |
| of the Office of Banks and Real Estate shall be subject to the | 25 |
| restrictions
provided in Section 2.5 of the Office of Banks and | 26 |
| Real Estate Act including,
without limitation, the |
|
|
|
HB4011 Enrolled |
- 49 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| restrictions on (i) owning shares of stock or holding
any other | 2 |
| equity interest in an entity regulated under this Act or in any
| 3 |
| corporation or company that owns or controls an entity | 4 |
| regulated under this
Act; (ii) being an officer, director, | 5 |
| employee, or agent of an entity regulated
under this Act; and | 6 |
| (iii) obtaining a loan or accepting a gratuity from an
entity | 7 |
| regulated under this Act.
| 8 |
| (g) After the initial examination for those licensees whose | 9 |
| only mortgage
activity is servicing fewer than 1,000 Illinois | 10 |
| residential loans,
the
examination required in subsection (a) | 11 |
| may be waived upon submission of a
letter from the licensee's | 12 |
| independent certified auditor that the licensee
serviced fewer | 13 |
| than 1,000 Illinois residential loans during the
year
in which | 14 |
| the
audit was performed.
| 15 |
| (Source: P.A. 93-1018, eff. 1-1-05.)
| 16 |
| (205 ILCS 635/4-5) (from Ch. 17, par. 2324-5)
| 17 |
| Sec. 4-5. Suspension, revocation of licenses; fines.
| 18 |
| (a) Upon written notice to a licensee, the Commissioner may | 19 |
| suspend
or revoke any license issued pursuant to this Act if he | 20 |
| or she shall make a
finding of one or more of the following in | 21 |
| the notice that:
| 22 |
| (1) Through separate acts or an act or a course of | 23 |
| conduct, the licensee
has violated any provisions of this | 24 |
| Act, any rule or regulation
promulgated by the Commissioner | 25 |
| or of any other law, rule or regulation of
this State or |
|
|
|
HB4011 Enrolled |
- 50 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| the United States.
| 2 |
| (2) Any fact or condition exists which, if it had | 3 |
| existed at the time of
the original application for such | 4 |
| license would have warranted the
Commissioner in refusing | 5 |
| originally to issue such license.
| 6 |
| (3) If a licensee is other than an individual, any | 7 |
| ultimate
equitable owner, officer, director, or member of | 8 |
| the licensed partnership,
association, corporation, or | 9 |
| other entity has so acted or failed to act as
would be | 10 |
| cause for suspending or revoking a license to that party as | 11 |
| an
individual.
| 12 |
| (b) No license shall be suspended or revoked, except as | 13 |
| provided in this
Section, nor shall any licensee be fined | 14 |
| without notice of his or her right
to a hearing as provided in | 15 |
| Section 4-12 of this Act.
| 16 |
| (c) The Commissioner, on good cause shown that an emergency | 17 |
| exists, may
suspend any license for a period not
exceeding 180 | 18 |
| days, pending investigation. Upon a showing that a
licensee has | 19 |
| failed to meet the experience or educational requirements of
| 20 |
| Section 2-2 or the requirements of subsection (g) of Section | 21 |
| 3-2, the
Commissioner shall suspend, prior to hearing as | 22 |
| provided in Section 4-12, the
license until those requirements | 23 |
| have been met.
| 24 |
| (d) The provisions of subsection (e) of Section 2-6 of this | 25 |
| Act
shall not affect a licensee's civil or criminal liability
| 26 |
| for acts committed prior to surrender of a license.
|
|
|
|
HB4011 Enrolled |
- 51 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| (e) No revocation, suspension or surrender of any license | 2 |
| shall impair
or affect the obligation of any pre-existing | 3 |
| lawful contract between the
licensee and any person.
| 4 |
| (f) Every license issued under this Act shall remain in | 5 |
| force and effect
until the same shall have expired without | 6 |
| renewal, have been surrendered,
revoked or suspended in | 7 |
| accordance with the provisions of this Act, but the
| 8 |
| Commissioner shall have authority to reinstate a suspended | 9 |
| license or to
issue a new license to a licensee whose license | 10 |
| shall have been revoked if
no fact or condition then exists | 11 |
| which would have warranted the
Commissioner in refusing | 12 |
| originally to issue such license under this Act.
| 13 |
| (g) Whenever the Commissioner shall revoke or suspend a | 14 |
| license issued
pursuant to this Act or fine a licensee under | 15 |
| this Act, he or she shall
forthwith execute in duplicate a | 16 |
| written order to that effect. The
Commissioner shall publish | 17 |
| notice of such order in the Illinois Register
and post notice | 18 |
| of the order on an agency Internet site maintained by the | 19 |
| Commissioner or on the Nationwide Mortgage Licensing System and | 20 |
| Registry and shall forthwith serve a copy of such order upon | 21 |
| the
licensee. Any such order may be reviewed in the manner | 22 |
| provided by
Section 4-12 of this Act.
| 23 |
| (h) When the Commissioner finds any person in violation of | 24 |
| the grounds
set forth in subsection (i), he or she may enter an | 25 |
| order imposing one or
more of the following penalties:
| 26 |
| (1) Revocation of license;
|
|
|
|
HB4011 Enrolled |
- 52 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| (2) Suspension of a license subject to reinstatement | 2 |
| upon satisfying all
reasonable conditions the Commissioner | 3 |
| may specify;
| 4 |
| (3) Placement of the licensee or applicant on probation | 5 |
| for a period of
time and subject to all reasonable | 6 |
| conditions as the Commissioner may specify;
| 7 |
| (4) Issuance of a reprimand;
| 8 |
| (5) Imposition of a fine not to exceed $25,000 for each
| 9 |
| count of
separate offense; and
| 10 |
| (6) Denial of a license.
| 11 |
| (i) The following acts shall constitute grounds for which | 12 |
| the
disciplinary actions specified in subsection (h) above may | 13 |
| be taken:
| 14 |
| (1) Being convicted or found guilty, regardless of | 15 |
| pendency of an
appeal, of a crime in any jurisdiction which | 16 |
| involves fraud, dishonest
dealing, or any other act of | 17 |
| moral turpitude;
| 18 |
| (2) Fraud, misrepresentation, deceit or negligence in | 19 |
| any mortgage
financing transaction;
| 20 |
| (3) A material or intentional misstatement of fact on | 21 |
| an initial or
renewal application;
| 22 |
| (4) Failure to follow the Commissioner's regulations | 23 |
| with respect to
placement of funds in escrow accounts;
| 24 |
| (5) Insolvency or filing under any provision of the | 25 |
| Bankruptcy Code
as a debtor;
| 26 |
| (6) Failure to account or deliver to any person any |
|
|
|
HB4011 Enrolled |
- 53 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| property such as any
money, fund, deposit, check, draft, | 2 |
| mortgage, or other document or thing of
value, which has | 3 |
| come into his or her hands and which is not his or her
| 4 |
| property or which he or she is not in law or equity | 5 |
| entitled to retain,
under the circumstances and at the time | 6 |
| which has been agreed upon or is
required by law or, in the | 7 |
| absence of a fixed time, upon demand of the
person entitled | 8 |
| to such accounting and delivery;
| 9 |
| (7) Failure to disburse funds in accordance with | 10 |
| agreements;
| 11 |
| (8) Any misuse, misapplication, or misappropriation of | 12 |
| trust funds
or escrow funds;
| 13 |
| (9) Having a license, or the equivalent, to practice | 14 |
| any profession or
occupation revoked, suspended, or | 15 |
| otherwise acted against, including the
denial of licensure | 16 |
| by a licensing authority of this State or another
state, | 17 |
| territory or country for fraud, dishonest dealing or any | 18 |
| other act
of moral turpitude;
| 19 |
| (10) Failure to issue a satisfaction of mortgage when | 20 |
| the residential
mortgage has been executed and proceeds | 21 |
| were not disbursed to the benefit
of the mortgagor and when | 22 |
| the mortgagor has fully paid licensee's costs
and | 23 |
| commission;
| 24 |
| (11) Failure to comply with any order of the | 25 |
| Commissioner or rule made
or issued under the provisions of | 26 |
| this Act;
|
|
|
|
HB4011 Enrolled |
- 54 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| (12) Engaging in activities regulated by this Act | 2 |
| without a current,
active license unless specifically | 3 |
| exempted by this Act;
| 4 |
| (13) Failure to pay in a timely manner any fee, charge | 5 |
| or fine under
this Act;
| 6 |
| (14) Failure to maintain, preserve, and keep available | 7 |
| for examination,
all books, accounts or other documents | 8 |
| required by the provisions of this
Act and the rules of the | 9 |
| Commissioner;
| 10 |
| (15) Refusing, obstructing, evading, or unreasonably | 11 |
| delaying an investigation, information request, or | 12 |
| examination authorized under this Act, or refusing, | 13 |
| obstructing, evading, or unreasonably delaying compliance | 14 |
| with the Director's Refusal to permit an investigation or | 15 |
| examination of the licensee's
or its affiliates' books and | 16 |
| records or refusal to comply with the
Commissioner's | 17 |
| subpoena or subpoena duces tecum;
| 18 |
| (16) A pattern of substantially underestimating the | 19 |
| maximum closing costs;
| 20 |
| (17) Failure to comply with or violation of any | 21 |
| provision of this Act.
| 22 |
| (j) A licensee shall be subject to the disciplinary actions | 23 |
| specified in
this Act for violations of subsection (i) by any | 24 |
| officer, director,
shareholder, joint venture, partner, | 25 |
| ultimate equitable owner, or employee
of the licensee.
| 26 |
| (k) Such licensee shall be subject to suspension or |
|
|
|
HB4011 Enrolled |
- 55 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| revocation for
unauthorized employee actions only if there is a | 2 |
| pattern of repeated violations by
employees or the licensee has | 3 |
| knowledge of the violations , or there is substantial harm to a | 4 |
| consumer .
| 5 |
| (l) Procedure for surrender of license:
| 6 |
| (1) The Commissioner may, after 10 days notice by | 7 |
| certified mail to the
licensee at the address set forth on | 8 |
| the license, stating the contemplated
action and in general | 9 |
| the grounds therefor and the date, time and place of
a | 10 |
| hearing thereon, and after providing the licensee with a | 11 |
| reasonable
opportunity to be heard prior to such action, | 12 |
| fine such licensee an amount
not exceeding $25,000
per | 13 |
| violation, or revoke or suspend any license
issued | 14 |
| hereunder if he or she finds that:
| 15 |
| (i) The licensee has failed to comply with any | 16 |
| provision of this Act or
any order, decision, finding, | 17 |
| rule, regulation or direction of the
Commissioner | 18 |
| lawfully made pursuant to the authority of this Act; or
| 19 |
| (ii) Any fact or condition exists which, if it had | 20 |
| existed at the time
of the original application for the | 21 |
| license, clearly would have warranted
the Commissioner | 22 |
| in refusing to issue the license.
| 23 |
| (2) Any licensee may submit application to surrender a | 24 |
| license by delivering to the
Commissioner written notice | 25 |
| that he or she thereby surrenders such license ,
but upon | 26 |
| the Director approving the surrender , it shall not affect |
|
|
|
HB4011 Enrolled |
- 56 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| the licensee's civil or criminal liability
for acts | 2 |
| committed prior to surrender or entitle the licensee to a | 3 |
| return
of any part of the license fee.
| 4 |
| (Source: P.A. 93-561, eff. 1-1-04; 93-1018, eff. 1-1-05.)
| 5 |
| (205 ILCS 635/4-7 new) | 6 |
| Sec. 4-7. Additional investigation and examination | 7 |
| authority. In addition to any authority allowed under this Act, | 8 |
| the Director shall have the authority to conduct investigations | 9 |
| and examinations as follows: | 10 |
| (a) For purposes of initial licensing, license renewal, | 11 |
| license suspension, license conditioning, license revocation | 12 |
| or termination, or general or specific inquiry or investigation | 13 |
| to determine compliance with this Act, the Commissioner shall | 14 |
| have the authority to access, receive, and use any books, | 15 |
| accounts, records, files, documents, information, or evidence | 16 |
| including, but not limited to, the following: | 17 |
| (1) criminal, civil, and administrative history | 18 |
| information, including nonconviction data as specified in | 19 |
| the Criminal Code of 1961; | 20 |
| (2) personal history and experience information, | 21 |
| including independent credit reports obtained from a | 22 |
| consumer reporting agency described in Section 603(p) of | 23 |
| the federal Fair Credit Reporting Act; and | 24 |
| (3) any other documents, information, or evidence the | 25 |
| Commissioner deems relevant to the inquiry or |
|
|
|
HB4011 Enrolled |
- 57 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| investigation regardless of the location, possession, | 2 |
| control, or custody of the documents, information, or | 3 |
| evidence. | 4 |
| (b) For the purposes of investigating violations or | 5 |
| complaints arising under this Act, or for the purposes of | 6 |
| examination, the Commissioner may review, investigate, or | 7 |
| examine any licensee, individual, or person subject to this | 8 |
| Act, as often as necessary in order to carry out the purposes | 9 |
| of this Act. The Commissioner may direct, subpoena, or order | 10 |
| the attendance of and examine under oath all persons whose | 11 |
| testimony may be required about the loans or the business or | 12 |
| subject matter of any such examination or investigation, and | 13 |
| may direct, subpoena, or order the person to produce books, | 14 |
| accounts, records, files, and any other documents the | 15 |
| Commissioner deems relevant to the inquiry. | 16 |
| (c) Each licensee, individual, or person subject to this | 17 |
| Act shall make available to the Commissioner upon request the | 18 |
| books and records relating to the operations of such licensee, | 19 |
| individual, or person subject to this Act. The Commissioner | 20 |
| shall have access to such books and records and interview the | 21 |
| officers, principals, mortgage loan originators, employees, | 22 |
| independent contractors, agents, and customers of the | 23 |
| licensee, individual, or person subject to this Act concerning | 24 |
| their business. | 25 |
| (d) Each licensee, individual, or person subject to this | 26 |
| Act shall make or compile reports or prepare other information |
|
|
|
HB4011 Enrolled |
- 58 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| as directed by the Commissioner in order to carry out the | 2 |
| purposes of this Section including, but not limited to: | 3 |
| (1) accounting compilations; | 4 |
| (2) information lists and data concerning loan | 5 |
| transactions in a format prescribed by the Commissioner; or | 6 |
| (3) other information deemed necessary to carry out the | 7 |
| purposes of this Section. | 8 |
| (e) In making any examination or investigation authorized | 9 |
| by this Act, the Commissioner may control access to any | 10 |
| documents and records of the licensee or person under | 11 |
| examination or investigation. The Commissioner may take | 12 |
| possession of the documents and records or place a person in | 13 |
| exclusive charge of the documents and records in the place | 14 |
| where they are usually kept. During the period of control, no | 15 |
| individual or person shall remove or attempt to remove any of | 16 |
| the documents and records except pursuant to a court order or | 17 |
| with the consent of the Commissioner. Unless the Commissioner | 18 |
| has reasonable grounds to believe the documents or records of | 19 |
| the licensee have been, or are at risk of being altered or | 20 |
| destroyed for purposes of concealing a violation of this Act, | 21 |
| the licensee or owner of the documents and records shall have | 22 |
| access to the documents or records as necessary to conduct its | 23 |
| ordinary business affairs. | 24 |
| (f) In order to carry out the purposes of this Section, the | 25 |
| Commissioner may: | 26 |
| (1) retain attorneys, accountants, or other |
|
|
|
HB4011 Enrolled |
- 59 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| professionals and specialists as examiners, auditors, or | 2 |
| investigators to conduct or assist in the conduct of | 3 |
| examinations or investigations; | 4 |
| (2) enter into agreements or relationships with other | 5 |
| government officials or regulatory associations in order | 6 |
| to improve efficiencies and reduce regulatory burden by | 7 |
| sharing resources, standardized or uniform methods or | 8 |
| procedures, and documents, records, information or | 9 |
| evidence obtained under this Section; | 10 |
| (3) use, hire, contract, or employ public or privately | 11 |
| available analytical systems, methods, or software to | 12 |
| examine or investigate the licensee, individual, or person | 13 |
| subject to this Act; | 14 |
| (4) accept and rely on examination or investigation | 15 |
| reports made by other government officials, within or | 16 |
| without this State; or | 17 |
| (5) accept audit reports made by an independent | 18 |
| certified public accountant for the licensee, individual, | 19 |
| or person subject to this Act in the course of that part of | 20 |
| the examination covering the same general subject matter as | 21 |
| the audit and may incorporate the audit report in the | 22 |
| report of the examination, report of investigation, or | 23 |
| other writing of the Commissioner. | 24 |
| (g) The authority of this Section shall remain in effect, | 25 |
| whether such a licensee, individual, or person subject to this | 26 |
| Act acts or claims to act under any licensing or registration |
|
|
|
HB4011 Enrolled |
- 60 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| law of this State, or claims to act without the authority. | 2 |
| (h) No licensee, individual, or person subject to | 3 |
| investigation or examination under this Section may knowingly | 4 |
| withhold, abstract, remove, mutilate, destroy, or secrete any | 5 |
| books, records, computer records, or other information. | 6 |
| (205 ILCS 635/4-8.1A new) | 7 |
| Sec. 4-8.1A. Confidentiality. | 8 |
| (a) In order to promote more effective regulation and | 9 |
| reduce regulatory burden through supervisory information | 10 |
| sharing, except as otherwise provided in federal Public Law | 11 |
| 110-289, Section 1512, the requirements under any federal law | 12 |
| or state law regarding the privacy or confidentiality of any | 13 |
| information or material provided to the Nationwide Mortgage | 14 |
| Licensing System and Registry, and any privilege arising under | 15 |
| federal or state law, including the rules of any federal or | 16 |
| state court, with respect to such information or material, | 17 |
| shall continue to apply to information or material after the | 18 |
| information or material has been disclosed to the Nationwide | 19 |
| Mortgage Licensing System and Registry. The information and | 20 |
| material may be shared with all state and federal regulatory | 21 |
| officials with mortgage industry oversight authority without | 22 |
| the loss of privilege or the loss of confidentiality | 23 |
| protections provided by federal law or state law. | 24 |
| (b) In order to promote more effective regulation and | 25 |
| reduce regulatory burden through supervisory information |
|
|
|
HB4011 Enrolled |
- 61 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| sharing, the Director is authorized to enter agreements or | 2 |
| sharing arrangements with other governmental agencies, the | 3 |
| Conference of State Bank Supervisors, the American Association | 4 |
| of Residential Mortgage Regulators or other associations | 5 |
| representing governmental agencies as established by rule, | 6 |
| regulation or order of the Director. The sharing of | 7 |
| confidential supervisory information or any information or | 8 |
| material described in subsection (a) of this Section pursuant | 9 |
| to an agreement or sharing arrangement shall not result in the | 10 |
| loss of privilege or the loss of confidentiality protections | 11 |
| provided by federal law or state law. | 12 |
| (c) In order to promote more effective regulation and | 13 |
| reduce regulatory burden through supervisory information | 14 |
| sharing, information or material that is subject to a privilege | 15 |
| or confidentiality under subsection (a) of this Section shall | 16 |
| not be subject to the following: | 17 |
| (1) disclosure under any State law governing the | 18 |
| disclosure to the public of information held by an officer | 19 |
| or an agency of the State; or | 20 |
| (2) subpoena or discovery, or admission into evidence, | 21 |
| in any private civil action or administrative process, | 22 |
| unless with respect to any privilege held by the Nationwide | 23 |
| Mortgage Licensing System and Registry with respect to the | 24 |
| information or material, the person to whom such | 25 |
| information or material pertains waives, in whole or in | 26 |
| part, in the discretion of that person, that privilege. |
|
|
|
HB4011 Enrolled |
- 62 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| (d) In order to promote more effective regulation and | 2 |
| reduce regulatory burden through supervisory information | 3 |
| sharing, other law relating to the disclosure of confidential | 4 |
| supervisory information or any information or material | 5 |
| described in subsection (a) of this Section that is | 6 |
| inconsistent with subsection (a) of this Section shall be | 7 |
| superseded by the requirements of this Section to the extent | 8 |
| the other law provides less confidentiality or a weaker | 9 |
| privilege. | 10 |
| (e) In order to promote more effective regulation and | 11 |
| reduce regulatory burden through supervisory information | 12 |
| sharing, this Section shall not apply to the employment history | 13 |
| of a mortgage loan originator, and the record of publicly | 14 |
| adjudicated disciplinary and enforcement actions against a | 15 |
| mortgage loan originator. | 16 |
| (205 ILCS 635/4-8.3) | 17 |
| Sec. 4-8.3. Annual report of mortgage brokerage and | 18 |
| servicing activity. On or before March 1 of each year or the | 19 |
| date selected for Mortgage Call Reports under Section 4-9.1 of | 20 |
| this Act , each licensee , except residential mortgage brokers, | 21 |
| shall file a report with the Commissioner that shall disclose | 22 |
| such information as the Commissioner requires. Exempt entities | 23 |
| as defined in subsection (d) of Section 1-4 shall not file the | 24 |
| annual report of mortgage and servicing activity required by | 25 |
| this Section.
|
|
|
|
HB4011 Enrolled |
- 63 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| (Source: P.A. 93-1018, eff. 1-1-05.) | 2 |
| (205 ILCS 635/4-9.1 new)
| 3 |
| Sec. 4-9.1. Mortgage call reports. Each residential | 4 |
| mortgage licensee shall submit to the Nationwide Mortgage | 5 |
| Licensing System and Registry reports of condition, which shall | 6 |
| be in the form and shall contain the information that the | 7 |
| Nationwide Mortgage Licensing System and Registry may require. | 8 |
| (205 ILCS 635/Art. VII heading) | 9 |
| ARTICLE VII. | 10 |
| MORTGAGE LOAN ORIGINATOR LICENSE REQUIRED | 11 |
| REGISTRATION OF LOAN ORIGINATORS
| 12 |
| (205 ILCS 635/7-1)
| 13 |
| Sec. 7-1. Registration required; rules and regulations. | 14 |
| Beginning 6 months
after the effective date of this amendatory | 15 |
| Act of the 93rd General Assembly,
it is unlawful for any | 16 |
| natural person to act or assume to act as a loan
originator, as | 17 |
| defined in subsection (hh) of Section 1-4, without being
| 18 |
| registered with the Commissioner unless the natural person is | 19 |
| exempt under
items (1) and (1.5) of subsection (d) of Section | 20 |
| 1-4 of this Act. The
Commissioner shall promulgate
rules
| 21 |
| prescribing the criteria for the registration and regulation of | 22 |
| loan
originators, including but not limited to, | 23 |
| qualifications, fees, examination,
education, supervision, and |
|
|
|
HB4011 Enrolled |
- 64 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| enforcement. This Section shall not be effective on or after | 2 |
| (1) the operability date of January 1, 2011 or (2) the | 3 |
| operability date selected pursuant to Section 7-1A of this Act | 4 |
| for a mortgage loan originator license; provided, however, that | 5 |
| a violation of this Section committed before the operability | 6 |
| date remains subject to penalties authorized by this Act.
| 7 |
| (Source: P.A. 93-561, eff. 1-1-04.)
| 8 |
| (205 ILCS 635/7-1A new) | 9 |
| Sec. 7-1A. Mortgage loan originator license. | 10 |
| (a) It is unlawful for any individual to act or assume to | 11 |
| act as a mortgage loan originator, as defined in subsection | 12 |
| (jj) of Section 1-4 of this Act, without obtaining a license | 13 |
| from the Director, unless the individual is exempt under | 14 |
| subsection (c) of this Section. Each licensed mortgage loan | 15 |
| originator must register with and maintain a valid unique | 16 |
| identifier issued by the Nationwide Mortgage Licensing System | 17 |
| and Registry. | 18 |
| (b) In order to facilitate an orderly transition to | 19 |
| licensing and minimize disruption in the mortgage marketplace, | 20 |
| the operability date for subsection (a) of this Section shall | 21 |
| be as provided in this subsection (b). For this purpose, the | 22 |
| Director may require submission of licensing information to the | 23 |
| Nationwide Mortgage Licensing System and Registry prior to the | 24 |
| operability dates designated by the Director pursuant to items | 25 |
| (1) and (2) of this subsection (b). |
|
|
|
HB4011 Enrolled |
- 65 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| (1) For all individuals other than individuals | 2 |
| described in item (2) of this subsection (b), the | 3 |
| operability date as designated by the Director shall be no | 4 |
| later than July 31, 2010, or any date approved by the | 5 |
| Secretary of the U.S. Department of Housing and Urban | 6 |
| Development, pursuant to the authority granted under | 7 |
| federal Public Law 110-289, Section 1508. | 8 |
| (2) For all individuals registered as loan originators | 9 |
| as of the effective date of this amendatory Act of the 96th | 10 |
| General Assembly, the operability date as designated by the | 11 |
| Director shall be no later than January 1, 2011, or any | 12 |
| date approved by the Secretary of the U.S. Department of | 13 |
| Housing and Urban Development, pursuant to the authority | 14 |
| granted under Public Law 110-289, Section 1508. | 15 |
| (3) For all individuals described in item (1) or (2) of | 16 |
| this subsection (b) who are loss mitigation specialists | 17 |
| employed by servicers, the operability date shall be July | 18 |
| 31, 2011, or any date approved by the Secretary of the U.S. | 19 |
| Department of Housing and Urban Development pursuant to | 20 |
| authority granted under Public Law 110-289, Section 1508. | 21 |
| (c) The following, when engaged in the following | 22 |
| activities, are exempt from this Act: | 23 |
| (1) Registered mortgage loan originators, when acting | 24 |
| for an entity described in subsection (tt) of Section 1-4. | 25 |
| (2) Any individual who offers or negotiates terms of a | 26 |
| residential mortgage loan with or on behalf of an immediate |
|
|
|
HB4011 Enrolled |
- 66 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| family member of the individual. | 2 |
| (3) Any individual who offers or negotiates terms of a | 3 |
| residential mortgage loan secured by a dwelling that served | 4 |
| as the individual's residence. | 5 |
| (4) A licensed attorney who negotiates the terms of a | 6 |
| residential mortgage loan on behalf of a client as an | 7 |
| ancillary matter to the attorney's representation of the | 8 |
| client, unless the attorney is compensated by a lender, a | 9 |
| mortgage broker, or other mortgage loan originator or by | 10 |
| any agent of a lender, mortgage broker, or other mortgage | 11 |
| loan originator. | 12 |
| (d) A loan processor or underwriter who is an independent | 13 |
| contractor may not engage in the activities of a loan processor | 14 |
| or underwriter unless he or she obtains and maintains a license | 15 |
| under subsection (a) of this Section. Each independent | 16 |
| contractor loan processor or underwriter licensed as a mortgage | 17 |
| loan originator must have and maintain a valid unique | 18 |
| identifier issued by the Nationwide Mortgage Licensing System | 19 |
| and Registry. | 20 |
| (e) For the purposes of implementing an orderly and | 21 |
| efficient licensing process, the Director may establish | 22 |
| licensing rules or regulations and interim procedures for | 23 |
| licensing and acceptance of applications. For previously | 24 |
| registered or licensed individuals, the Director may establish | 25 |
| expedited review and licensing procedures. |
|
|
|
HB4011 Enrolled |
- 67 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| (205 ILCS 635/7-2 new) | 2 |
| Sec. 7-2. State license application and issuance. | 3 |
| (a) Applicants for a license shall apply in a form | 4 |
| prescribed by the Director. Each form shall contain content as | 5 |
| set forth by rule, regulation, instruction, or procedure of the | 6 |
| Director and may be changed or updated as necessary by the | 7 |
| Director in order to carry out the purposes of this Act. | 8 |
| (b) In order to fulfill the purposes of this Act, the | 9 |
| Director is authorized to establish relationships or contracts | 10 |
| with the Nationwide Mortgage Licensing System and Registry or | 11 |
| other entities designated by the Nationwide Mortgage Licensing | 12 |
| System and Registry to collect and maintain records and process | 13 |
| transaction fees or other fees related to licensees or other | 14 |
| persons subject to this Act. | 15 |
| (c) In connection with an application for licensing as a | 16 |
| mortgage loan originator, the applicant shall, at a minimum, | 17 |
| furnish to the Nationwide Mortgage Licensing System and | 18 |
| Registry information concerning the applicant's identity, | 19 |
| including the following: | 20 |
| (1) Fingerprints for submission to the Federal Bureau | 21 |
| of Investigation, and any governmental agency or entity | 22 |
| authorized to receive such information for a state, | 23 |
| national and international criminal history background | 24 |
| check. | 25 |
| (2) Personal history and experience in a form | 26 |
| prescribed by the Nationwide Mortgage Licensing System and |
|
|
|
HB4011 Enrolled |
- 68 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| Registry, including the submission of authorization for | 2 |
| the Nationwide Mortgage Licensing System and Registry and | 3 |
| the Director to obtain: | 4 |
| (A) an independent credit report obtained from a | 5 |
| consumer reporting agency described in Section 603(p) | 6 |
| of the Fair Credit Reporting Act; and | 7 |
| (B) information related to any administrative, | 8 |
| civil, or criminal findings by any governmental | 9 |
| jurisdiction. | 10 |
| (d) For the purpose of this Section, and in order to reduce | 11 |
| the points of contact which the Federal Bureau of Investigation | 12 |
| may have to maintain for purposes of subsection (c) of this | 13 |
| Section, the Director may use the Nationwide Mortgage Licensing | 14 |
| System and Registry as a channeling agent for requesting | 15 |
| information from and distributing information to the | 16 |
| Department of Justice or any governmental agency. | 17 |
| (e) For the purposes of this Section and in order to reduce | 18 |
| the points of contact which the Director may have to maintain | 19 |
| for purposes of item (2) of subsection (c) of this Section, the | 20 |
| Director may use the Nationwide Mortgage Licensing System and | 21 |
| Registry as a channeling agent for requesting and distributing | 22 |
| information to and from any source so directed by the Director. | 23 |
| (205 ILCS 635/7-3 new) | 24 |
| Sec. 7-3. Issuance of license. The Director shall not issue | 25 |
| a mortgage loan originator license unless the Director makes at |
|
|
|
HB4011 Enrolled |
- 69 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| a minimum the following findings: | 2 |
| (1) The applicant has never had a mortgage loan originator | 3 |
| license revoked in any governmental jurisdiction, except that a | 4 |
| subsequent formal vacation of such revocation shall not be | 5 |
| deemed a revocation. | 6 |
| (2) The applicant has not been convicted of, or pled guilty | 7 |
| or nolo contendere to, a felony in a domestic, foreign, or | 8 |
| military court: | 9 |
| (A) during the 7-year period preceding the date of the | 10 |
| application for licensing and registration; or | 11 |
| (B) at any time preceding such date of application, if | 12 |
| such felony involved an act of fraud, dishonesty, or a | 13 |
| breach of trust, or money laundering; | 14 |
| provided that any pardon of a conviction shall not be a | 15 |
| conviction for purposes of this item (2). | 16 |
| (3) The applicant has demonstrated financial | 17 |
| responsibility, character, and general fitness so as to command | 18 |
| the confidence of the community and to warrant a determination | 19 |
| that the mortgage loan originator will operate honestly, | 20 |
| fairly, and efficiently within the purposes of this Act. For | 21 |
| purposes of this item (3) a person has shown that he or she is | 22 |
| not financially responsible when he or she has shown a | 23 |
| disregard for the management of his or her own financial | 24 |
| condition. A determination that an individual has not shown | 25 |
| financial responsibility may include, but is not limited to, | 26 |
| consideration of: |
|
|
|
HB4011 Enrolled |
- 70 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| (A) current outstanding judgments, except judgments | 2 |
| solely as a result of medical expenses; | 3 |
| (B) current outstanding tax liens or other government | 4 |
| liens and filings, educational loan defaults, and | 5 |
| non-payment of child support; | 6 |
| (C) foreclosures within the past 3 years; | 7 |
| (D) a pattern of seriously delinquent accounts within | 8 |
| the past 3 years; and | 9 |
| (E) an independent credit report obtained under | 10 |
| Section 7-2(c)(2)of the Act; provided that, a credit score | 11 |
| may not be the sole basis for determining that an | 12 |
| individual has not shown financial responsibility; | 13 |
| provided further that, the credit report may be the sole | 14 |
| basis for determining that an individual has not shown | 15 |
| financial responsibility. | 16 |
| (4) The applicant has completed the pre-licensing | 17 |
| education requirement described in Section 7-4 of this Act. | 18 |
| (5) The applicant has passed a written test that meets the | 19 |
| test requirement described in Section 7-5 of this Act. | 20 |
| (6) The applicant has met the surety bond requirement as | 21 |
| required pursuant to Section 7-12 of this Act. | 22 |
| (205 ILCS 635/7-4 new) | 23 |
| Sec. 7-4. Pre-licensing and education of mortgage loan | 24 |
| originators. | 25 |
| (a) In order to meet the pre-licensing education |
|
|
|
HB4011 Enrolled |
- 71 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| requirement referred to in item (4) of Section 7-3 of this Act | 2 |
| an individual shall complete at least 20 hours of education | 3 |
| approved in accordance with subsection (b) of this Section, | 4 |
| which shall include at least: | 5 |
| (1) 3 hours of Federal law and regulations; | 6 |
| (2) 3 hours of ethics, which shall include instruction | 7 |
| on fraud, consumer protection, and fair lending issues; and | 8 |
| (3) 2 hours of training related to lending standards | 9 |
| for the nontraditional mortgage product marketplace. | 10 |
| (b) For purposes of subsection (a) of this Section, | 11 |
| pre-licensing education courses shall be reviewed and approved | 12 |
| by the Nationwide Mortgage Licensing System and Registry based | 13 |
| upon reasonable standards. Review and approval of a | 14 |
| pre-licensing education course shall include review and | 15 |
| approval of the course provider. | 16 |
| (c) Nothing in this Section shall preclude any | 17 |
| pre-licensing education course, as approved by the Nationwide | 18 |
| Mortgage Licensing System and Registry, that is provided by the | 19 |
| employer of the applicant or an entity which is affiliated with | 20 |
| the applicant by an agency contract, or any subsidiary or | 21 |
| affiliate of such an employer or entity. | 22 |
| (d) Pre-licensing education may be offered in a classroom, | 23 |
| online, or by any other means approved by the Nationwide | 24 |
| Mortgage Licensing System and Registry. | 25 |
| (e) The pre-licensing education requirements approved by | 26 |
| the Nationwide Mortgage Licensing System and Registry for the |
|
|
|
HB4011 Enrolled |
- 72 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| subjects listed in items (1) through (3) of subsection (a) for | 2 |
| any state shall be accepted as credit towards completion of | 3 |
| pre-licensing education requirements in Illinois. | 4 |
| (f) An individual previously registered under this Act who | 5 |
| is applying to be licensed after the effective date of this | 6 |
| amendatory Act of the 96th General Assembly must prove that he | 7 |
| or she has completed all of the continuing education | 8 |
| requirements for the year in which the registration or license | 9 |
| was last held. | 10 |
| (205 ILCS 635/7-5 new) | 11 |
| Sec. 7-5. Testing of mortgage loan originators. | 12 |
| (a) In order to meet the written test requirement referred | 13 |
| to in item (5) of Section 7-3, an individual shall pass, in | 14 |
| accordance with the standards established under this | 15 |
| subsection (a), a qualified written test developed by the | 16 |
| Nationwide Mortgage Licensing System and Registry and | 17 |
| administered by a test provider approved by the Nationwide | 18 |
| Mortgage Licensing System and Registry based upon reasonable | 19 |
| standards. | 20 |
| (b) A written test shall not be treated as a qualified | 21 |
| written test for purposes of subsection (a) of this Section | 22 |
| unless the test adequately measures the applicant's knowledge | 23 |
| and comprehension in appropriate subject areas, including: | 24 |
| (1) ethics; | 25 |
| (2) federal law and regulation pertaining to mortgage |
|
|
|
HB4011 Enrolled |
- 73 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| origination; | 2 |
| (3) State law and regulation pertaining to mortgage | 3 |
| origination; and | 4 |
| (4) federal and State law and regulation, including | 5 |
| instruction on fraud, consumer protection, the | 6 |
| nontraditional mortgage marketplace, and fair lending | 7 |
| issues. | 8 |
| (c) Nothing in this Section shall prohibit a test provider | 9 |
| approved by the Nationwide Mortgage Licensing System and | 10 |
| Registry from providing a test at the location of the employer | 11 |
| of the applicant or the location of any subsidiary or affiliate | 12 |
| of the employer of the applicant, or the location of any entity | 13 |
| with which the applicant holds an exclusive arrangement to | 14 |
| conduct the business of a mortgage loan originator. | 15 |
| (d) An individual shall not be considered to have passed a | 16 |
| qualified written test unless the individual achieves a test | 17 |
| score of not less than 75% correct answers to questions. | 18 |
| An individual may retake a test 3 consecutive times with | 19 |
| each consecutive taking occurring at least 30 days after the | 20 |
| preceding test. | 21 |
| After failing 3 consecutive tests, an individual shall wait | 22 |
| at least 6 months before taking the test again. | 23 |
| A licensed mortgage loan originator who fails to maintain a | 24 |
| valid license for a period of 5 years or longer shall retake | 25 |
| the test, not taking into account any time during which such | 26 |
| individual is a registered mortgage loan originator. |
|
|
|
HB4011 Enrolled |
- 74 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| (205 ILCS 635/7-6 new) | 2 |
| Sec. 7-6. Standards for license renewal. | 3 |
| (a) The minimum standards for license renewal for mortgage | 4 |
| loan originators shall include the following: | 5 |
| (1) The mortgage loan originator continues to meet the | 6 |
| minimum standards for license issuance under Section 7-3. | 7 |
| (2) The mortgage loan originator has satisfied the | 8 |
| annual continuing education requirements described in | 9 |
| Section 7-7. | 10 |
| (3) The mortgage loan originator has paid all required | 11 |
| fees for renewal of the license. | 12 |
| (b) The license of a mortgage loan originator failing to | 13 |
| satisfy the minimum standards for license renewal shall expire. | 14 |
| The Director may adopt procedures for the reinstatement of | 15 |
| expired licenses consistent with the standards established by | 16 |
| the Nationwide Mortgage Licensing System and Registry. | 17 |
| (205 ILCS 635/7-7 new) | 18 |
| Sec. 7-7. Continuing education for mortgage loan | 19 |
| originators. | 20 |
| (a) In order to meet the annual continuing education | 21 |
| requirements referred to in Section 7-6, a licensed mortgage | 22 |
| loan originator shall complete at least 8 hours of education | 23 |
| approved in accordance with subsection (b) of this Section, | 24 |
| which shall include at least: |
|
|
|
HB4011 Enrolled |
- 75 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| (1) 3 hours of Federal law and regulations; | 2 |
| (2) 2 hours of ethics, which shall include instruction | 3 |
| on fraud, consumer protection, and fair lending issues; and | 4 |
| (3) 2 hours of training related to lending standards | 5 |
| for the nontraditional mortgage product marketplace. | 6 |
| (b) For purposes of this subsection (a), continuing | 7 |
| education courses shall be reviewed and approved by the | 8 |
| Nationwide Mortgage Licensing System and Registry based upon | 9 |
| reasonable standards. Review and approval of a continuing | 10 |
| education course shall include review and approval of the | 11 |
| course provider. | 12 |
| (c) Nothing in this Section shall preclude any education | 13 |
| course, as approved by the Nationwide Mortgage Licensing System | 14 |
| and Registry, that is provided by the employer of the mortgage | 15 |
| loan originator or an entity which is affiliated with the | 16 |
| mortgage loan originator by an agency contract, or any | 17 |
| subsidiary or affiliate of the employer or entity. | 18 |
| (d) Continuing education may be offered either in a | 19 |
| classroom, online, or by any other means approved by the | 20 |
| Nationwide Mortgage Licensing System and Registry. | 21 |
| (e) A licensed mortgage loan originator: | 22 |
| (1) Except as provided in Section 7-6 and subsection | 23 |
| (i) of this Section, may only receive credit for a | 24 |
| continuing education course in the year in which the course | 25 |
| is taken; and | 26 |
| (2) May not take the same approved course in the same |
|
|
|
HB4011 Enrolled |
- 76 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| or successive years to meet the annual requirements for | 2 |
| continuing education. | 3 |
| (f) A licensed mortgage loan originator who is an approved | 4 |
| instructor of an approved continuing education course may | 5 |
| receive credit for the licensed mortgage loan originator's own | 6 |
| annual continuing education requirement at the rate of 2 hours | 7 |
| credit for every one hour taught. | 8 |
| (g) A person having successfully completed the education | 9 |
| requirements approved by the Nationwide Mortgage Licensing | 10 |
| System and Registry for the subjects listed in subsection (a) | 11 |
| of this Section for any state shall be accepted as credit | 12 |
| towards completion of continuing education requirements in | 13 |
| this State. | 14 |
| (h) A licensed mortgage loan originator who subsequently | 15 |
| becomes unlicensed must complete the continuing education | 16 |
| requirements for the last year in which the license was held | 17 |
| prior to issuance of a new or renewed license. | 18 |
| (i) A person meeting the requirements of Section 7-6 may | 19 |
| make up any deficiency in continuing education as established | 20 |
| by rule or regulation of the Director. | 21 |
| (205 ILCS 635/7-8 new) | 22 |
| Sec. 7-8. Authority to require license. In addition to any | 23 |
| other duties imposed upon the Director by law, the Director | 24 |
| shall require mortgage loan originators to be licensed and | 25 |
| registered through the Nationwide Mortgage Licensing System |
|
|
|
HB4011 Enrolled |
- 77 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| and Registry. In order to carry out this requirement the | 2 |
| Director is authorized to participate in the Nationwide | 3 |
| Mortgage Licensing System and Registry. For this purpose, the | 4 |
| Director may establish by agreement, order or rule requirements | 5 |
| as necessary, including, but not limited to, the following: | 6 |
| (1) Background checks for: | 7 |
| (A) criminal history through fingerprint or other | 8 |
| databases; | 9 |
| (B) civil or administrative records; | 10 |
| (C) credit history; or | 11 |
| (D) any other information as deemed necessary by | 12 |
| the Nationwide Mortgage Licensing System and Registry. | 13 |
| (2) The payment of fees to apply for or renew licenses | 14 |
| through the Nationwide Mortgage Licensing System and | 15 |
| Registry; | 16 |
| (3) The setting or resetting as necessary of renewal or | 17 |
| reporting dates; and | 18 |
| (4) Requirements for amending or surrendering a | 19 |
| license or any other such activities as the Director deems | 20 |
| necessary for participation in the Nationwide Mortgage | 21 |
| Licensing System and Registry. | 22 |
| (205 ILCS 635/7-9 new) | 23 |
| Sec. 7-9. Report to Nationwide Mortgage Licensing System | 24 |
| and Registry. Subject to State privacy laws, the Director is | 25 |
| required to report regularly violations of this Act, as well as |
|
|
|
HB4011 Enrolled |
- 78 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| enforcement actions and other relevant information, to the | 2 |
| Nationwide Mortgage Licensing System and Registry subject to | 3 |
| the provisions contained in Section 4-8.1A of this Act. | 4 |
| (205 ILCS 635/7-10 new) | 5 |
| Sec. 7-10. Nationwide Mortgage Licensing System and | 6 |
| Registry information challenge process. The Director shall | 7 |
| establish a process whereby mortgage loan originators may | 8 |
| challenge information entered into the Nationwide Mortgage | 9 |
| Licensing System and Registry by the Director. | 10 |
| (205 ILCS 635/7-11 new)
| 11 |
| Sec. 7-11. Mortgage loan originator suspension or | 12 |
| revocation of registration; refusal to renew; fines. | 13 |
| (a) In addition to any other action authorized by this Act | 14 |
| or any other applicable law, rule or regulation, the Director | 15 |
| may do the following: | 16 |
| (1) Suspend, revoke, or refuse to renew a license or | 17 |
| reprimand, place on probation or otherwise discipline a | 18 |
| licensee if the Director finds that the mortgage loan | 19 |
| originator has violated this Act or any other applicable | 20 |
| law or regulation or has been convicted of a criminal | 21 |
| offense. | 22 |
| (2) Impose a fine of not more than $1,000 for each day | 23 |
| for each violation of this Act or any other applicable law | 24 |
| or regulation that is committed. If the Mortgage Loan |
|
|
|
HB4011 Enrolled |
- 79 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| Originator engages in a pattern of repeated violations, the | 2 |
| Director may impose a fine of not more than $2,000 for each | 3 |
| day for each violation committed. In determining the amount | 4 |
| of a fine to be imposed pursuant to this Act or any other | 5 |
| applicable law or regulation, the Director shall consider | 6 |
| all of the following: | 7 |
| (A) The seriousness of the violation; | 8 |
| (B) The mortgage loan originator's good faith | 9 |
| efforts to prevent the violation; and | 10 |
| (C) The mortgage loan originator's history of | 11 |
| violations and compliance with orders. | 12 |
| (b) In addition to any other action authorized by this Act | 13 |
| or any other applicable law, rule or regulation, the Director | 14 |
| may investigate alleged violations of the Act or any other | 15 |
| applicable law, rule or regulation and complaints concerning | 16 |
| any such violation. The Director may seek a court order to | 17 |
| enjoin the violation. | 18 |
| (c) In addition to any other action authorized by this Act | 19 |
| or any other applicable law, rule or regulation, if the | 20 |
| Director determines that a mortgage loan originator is engaged | 21 |
| in or is believed to be engaged in activities that may | 22 |
| constitute a violation of this Act or any other applicable law, | 23 |
| rule or regulation, the Director may issue a cease and desist | 24 |
| order to compel the mortgage loan originator to comply with | 25 |
| this Act or any other applicable law, rule or regulation or, | 26 |
| upon a showing that an emergency exists, may suspend the |
|
|
|
HB4011 Enrolled |
- 80 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| mortgage loan originator's license for a period not exceeding | 2 |
| 180 calendar days, pending investigation. | 3 |
| (205 ILCS 635/7-12 new)
| 4 |
| Sec. 7-12. Surety bond required. | 5 |
| (a) Each mortgage loan originator shall be covered by a | 6 |
| surety bond in accordance with this Section. In the event that | 7 |
| the mortgage loan originator is an employee or exclusive agent | 8 |
| of a person subject to this Act, the surety bond of such person | 9 |
| subject to this Act can be used in lieu of the mortgage loan | 10 |
| originator's surety bond requirement.
The surety bond shall | 11 |
| provide coverage for each mortgage loan originator in an amount | 12 |
| prescribed under subsection (b) of this Section.
The surety | 13 |
| bond shall be in a form prescribed by the Director.
The | 14 |
| Director may promulgate rules or regulations with respect to | 15 |
| the requirements for such surety bonds as necessary to | 16 |
| accomplish the purposes of this Act. | 17 |
| (b) The penal sum of the surety bond shall be maintained in | 18 |
| an amount that reflects the dollar amount of loans originated | 19 |
| as determined by the Director. | 20 |
| (c) When an action is commenced on a licensee's bond the | 21 |
| Director may require the filing of a new bond. | 22 |
| (d) Immediately upon recovery upon any action on the bond | 23 |
| the licensee shall file a new bond. | 24 |
| (205 ILCS 635/7-13 new)
|
|
|
|
HB4011 Enrolled |
- 81 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| Sec. 7-13. Prohibited acts and practices for mortgage loan | 2 |
| originators. It is a violation of this Act for an individual | 3 |
| subject to this Act to: | 4 |
| (1) Directly or indirectly employ any scheme, device, | 5 |
| or artifice to defraud or mislead borrowers or lenders or | 6 |
| to defraud any person. | 7 |
| (2) Engage in any unfair or deceptive practice toward | 8 |
| any person. | 9 |
| (3) Obtain property by fraud or misrepresentation. | 10 |
| (4) Solicit or enter into a contract with a borrower | 11 |
| that provides in substance that the person or individual | 12 |
| subject to this Act may earn a fee or commission through | 13 |
| "best efforts" to obtain a loan even though no loan is | 14 |
| actually obtained for the borrower. | 15 |
| (5) Solicit, advertise, or enter into a contract for | 16 |
| specific interest rates, points, or other financing terms | 17 |
| unless the terms are actually available at the time of | 18 |
| soliciting, advertising, or contracting. | 19 |
| (6) Conduct any business covered by this Act without | 20 |
| holding a valid license as required under this Act, or | 21 |
| assist or aid and abet any person in the conduct of | 22 |
| business under this Act without a valid license as required | 23 |
| under this Act. | 24 |
| (7) Fail to make disclosures as required by this Act | 25 |
| and any other applicable State or federal law, including | 26 |
| regulations thereunder. |
|
|
|
HB4011 Enrolled |
- 82 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| (8) Fail to comply with this Act or rules or | 2 |
| regulations promulgated under this Act, or fail to comply | 3 |
| with any other state or federal law, including the rules | 4 |
| and regulations thereunder, applicable to any business | 5 |
| authorized or conducted under this Act. | 6 |
| (9) Make, in any manner, any false or deceptive | 7 |
| statement or representation of a material fact, or any | 8 |
| omission of a material fact, required on any document or | 9 |
| application subject to this Act. | 10 |
| (10) Negligently make any false statement or knowingly | 11 |
| and willfully make any omission of material fact in | 12 |
| connection with any information or report filed with a | 13 |
| governmental agency or the Nationwide Mortgage Licensing | 14 |
| System and Registry or in connection with any investigation | 15 |
| conducted by the Director or another governmental agency. | 16 |
| (11) Make any payment, threat or promise, directly or | 17 |
| indirectly, to any person for the purpose of influencing | 18 |
| the independent judgment of the person in connection with a | 19 |
| residential mortgage loan, or make any payment threat or | 20 |
| promise, directly or indirectly, to any appraiser of a | 21 |
| property, for the purpose of influencing the independent | 22 |
| judgment of the appraiser with respect to the value of the | 23 |
| property. | 24 |
| (12) Collect, charge, attempt to collect or charge, or | 25 |
| use or propose any agreement purporting to collect or | 26 |
| charge any fee prohibited by this Act. |
|
|
|
HB4011 Enrolled |
- 83 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| (13) Cause or require a borrower to obtain property | 2 |
| insurance coverage in an amount that exceeds the | 3 |
| replacement cost of the improvements as established by the | 4 |
| property insurer. | 5 |
| (14) Fail to truthfully account for monies belonging to | 6 |
| a party to a residential mortgage loan transaction. | 7 |
| (15) Engage in conduct that constitutes dishonest | 8 |
| dealings. | 9 |
| (16) Knowingly instruct, solicit, propose, or cause a | 10 |
| person other than the borrower to sign a borrower's | 11 |
| signature on a mortgage related document, or solicit, | 12 |
| accept or execute any contract or other document related to | 13 |
| the residential mortgage transaction that contains any | 14 |
| blanks to be filled in after signing or initialing the | 15 |
| contract or other document, except for forms authorizing | 16 |
| the verification of application information. | 17 |
| (17) Discourage any applicant from seeking or | 18 |
| participating in housing or financial counseling either | 19 |
| before or after the consummation of a loan transaction, or | 20 |
| fail to provide information on counseling resources upon | 21 |
| request. | 22 |
| (18) Charge for any ancillary products or services, not | 23 |
| essential to the basic loan transaction for which the | 24 |
| consumer has applied, without the applicant's knowledge | 25 |
| and written authorization, or charge for any ancillary | 26 |
| products or services not actually provided in the |
|
|
|
HB4011 Enrolled |
- 84 - |
LRB096 05294 MJR 15360 b |
|
| 1 |
| transaction. | 2 |
| (19) Fail to give reasonable consideration to a | 3 |
| borrower's ability to repay the debt. | 4 |
| (20) Interfere or obstruct an investigation or | 5 |
| examination conducted pursuant to this Act. | 6 |
| (205 ILCS 635/7-14 new)
| 7 |
| Sec. 7-14. Unique identifier shown. The unique identifier | 8 |
| of any person originating a residential mortgage loan shall be | 9 |
| clearly shown on all residential mortgage loan application | 10 |
| forms, solicitations, and advertisements, including business | 11 |
| cards and websites, and any other documents as established by | 12 |
| rule, regulation, or order of the Commissioner. | 13 |
| Section 97. Severability. The provisions of this Act are | 14 |
| severable under Section 1.31 of the Statute on Statutes.
| 15 |
| Section 99. Effective date. This Act takes effect upon | 16 |
| becoming law.
|
|