Illinois General Assembly - Full Text of SB3287
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Full Text of SB3287  96th General Assembly




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1     AN ACT concerning business.
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4     Section 5. The High Risk Home Loan Act is amended by
5 changing Section 10 as follows:
6     (815 ILCS 137/10)
7     Sec. 10. Definitions. As used in this Act:
8     "Approved credit counselor" means a credit counselor
9 approved by the Director of Financial Institutions.
10     "Borrower" means a natural person who seeks or obtains a
11 high risk home loan.
12     "Commissioner" means the Commissioner of the Office of
13 Banks and Real Estate.
14     "Department" means the Department of Financial
15 Institutions.
16     "Director" means the Director of Financial Institutions.
17     "Good faith" means honesty in fact in the conduct or
18 transaction concerned.
19     "High risk home loan" means a home equity loan in which (i)
20 at the time of origination, the annual percentage rate exceeds
21 by more than 6 percentage points in the case of a first lien
22 mortgage, or by more than 8 percentage points in the case of a
23 junior mortgage, the yield on U.S. Treasury securities having



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1 comparable periods of maturity to the loan maturity as of the
2 fifteenth day of the month immediately preceding the month in
3 which the application for the loan is received by the lender or
4 (ii) the total points and fees payable by the consumer at or
5 before closing will exceed the greater of 5% of the total loan
6 amount or $800. The $800 figure shall be adjusted annually on
7 January 1 by the annual percentage change in the Consumer Price
8 Index for All Urban Consumers for all items published by the
9 United States Department of Labor. "High risk home loan" does
10 not include a loan for reverse mortgage financing of
11 residential real estate, including under programs regulated by
12 the Federal Housing Administration (FHA), or a loan that is
13 made primarily for a business purpose unrelated to the
14 residential real property securing the loan or to an open-end
15 credit plan subject to 12 CFR 226 (2000, no subsequent
16 amendments or editions are included).
17     "Home equity loan" means any loan secured by the borrower's
18 primary residence where the proceeds are not used as purchase
19 money for the residence.
20     "Lender" means a natural or artificial person who
21 transfers, deals in, offers, or makes a high risk home loan.
22 "Lender" includes, but is not limited to, creditors and brokers
23 who transfer, deal in, offer, or make high risk home loans.
24 "Lender" does not include purchasers, assignees, or subsequent
25 holders of high risk home loans.
26     "Office" means the Office of Banks and Real Estate.



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1     "Points and fees" means all items required to be disclosed
2 as points and fees under 12 CFR 226.32 (2000, no subsequent
3 amendments or editions included); the premium of any single
4 premium credit life, credit disability, credit unemployment,
5 or any other life or health insurance that is financed directly
6 or indirectly into the loan; and compensation paid directly or
7 indirectly to a mortgage broker, including a broker that
8 originates a loan in its own name in a table-funded
9 transaction, not otherwise included in 12 CFR 226.4.
10     "Reasonable" means fair, proper, just, or prudent under the
11 circumstances.
12     "Servicer" means any entity chartered under the Illinois
13 Banking Act, the Savings Bank Act, the Illinois Credit Union
14 Act, or the Illinois Savings and Loan Act of 1985 and any
15 person or entity licensed under the Residential Mortgage
16 License Act of 1987, the Consumer Installment Loan Act, or the
17 Sales Finance Agency Act who is responsible for the collection
18 or remittance for, or has the right or obligation to collect or
19 remit for, any lender, note owner, or note holder or for a
20 licensee's own account, of payments, interest, principal, and
21 trust items (such as hazard insurance and taxes on a
22 residential mortgage loan) in accordance with the terms of the
23 residential mortgage loan, including loan payment follow-up,
24 delinquency loan follow-up, loan analysis, and any
25 notifications to the borrower that are necessary to enable the
26 borrower to keep the loan current and in good standing.



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1     "Total loan amount" has the same meaning as that term is
2 given in 12 CFR 226.32 and shall be calculated in accordance
3 with the Federal Reserve Board's Official Staff Commentary to
4 that regulation.
5 (Source: P.A. 93-561, eff. 1-1-04.)