State of Illinois
92nd General Assembly
Legislation

   [ Search ]   [ PDF text ]   [ Legislation ]   
[ Home ]   [ Back ]   [ Bottom ]


[ Engrossed ][ Enrolled ][ House Amendment 001 ]
[ Senate Amendment 001 ][ Senate Amendment 002 ]


92_HB2439

 
                                               LRB9205889REpc

 1        AN ACT to create the Home Loan Collateral Fund Act.

 2        Be it  enacted  by  the  People  of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section  1.   Short  title.  This Act may be cited as the
 5    Home Loan Collateral Fund Act.

 6        Section 5.  Definitions.  For purposes of this Act:
 7        "Financial institution" means a bank,  savings  and  loan
 8    association,  savings  bank, or credit union that is lawfully
 9    doing business in this State.
10        "Fund" means, unless the context requires otherwise,  the
11    Home Loan Collateral Fund established by this Act.
12        "Home  loan"  means a loan, other than an open-end credit
13    plan or a reverse mortgage transaction,  for  which  (i)  the
14    principal  amount  of  the  loan  does  not exceed 50% of the
15    conforming loan size limit for a  single-family  dwelling  as
16    established  from  time  to  time  by  the  Federal  National
17    Mortgage  Association, (ii) the borrower is a natural person,
18    (iii) the debt is incurred  by  the  borrower  primarily  for
19    personal, family, or household purposes, and (iv) the loan is
20    secured  by  a  mortgage or deed of trust on real estate upon
21    which there is located or there is to be located a  structure
22    designed principally for the occupancy of one family and that
23    is  or  will  be  occupied  by the borrower as the borrower's
24    principal dwelling.

25        Section 10.  Home Loan Collateral Fund.   The  Home  Loan
26    Collateral  Fund  is  created  as a special fund in the State
27    treasury.  The  Fund  shall  be  administered  by  the  State
28    Treasurer  to  provide  collateral  for Illinois citizens who
29    have applied for a home loan from a financial institution  or
30    who  have  an  existing  home  loan  that requires additional
 
                            -2-                LRB9205889REpc
 1    security to avoid foreclosure or other adverse  action.   All
 2    interest  earned  from  the  investment  or deposit of moneys
 3    accumulated in the Fund shall, pursuant to Section 4.1 of the
 4    State Finance Act, be deposited into  the  Fund.   The  State
 5    Treasurer shall transfer from the General Revenue Fund to the
 6    Fund   an   amount   equal  to  the  full  amount  of  moneys
 7    appropriated by the General  Assembly  for  transfer  to  the
 8    Fund.

 9        Section  15.   Administration.  The State Treasurer shall
10    administer the Fund as follows:
11        (1)  Upon  application   by   a   financial   institution
12    extending  a  home  loan  to an Illinois citizen purchasing a
13    home in Illinois, the State Treasurer may pledge a portion of
14    the Fund to the financial institution.   The  amount  of  the
15    Fund  pledged  to  secure a home loan shall not exceed 10% of
16    the appraised value of the home. In order for a home loan  to
17    qualify  for  collateralization  from the Fund, the financial
18    institution  making  the  loan  must  certify  to  the  State
19    Treasurer that the financial institution would not offer  the
20    borrower  a home loan pursuant to the financial institution's
21    prevailing credit standards without the pledge of  additional
22    collateral from the Fund.
23        (2)  Upon  application  by  a  financial institution, the
24    State Treasurer may  pledge  a  portion  of  the  Fund  to  a
25    financial  institution  that  has  made  a  home  loan  to an
26    Illinois citizen who has failed to make payments on the  home
27    loan  as  a  result  of a temporary layoff or disability.  To
28    qualify, the borrower must have resumed  making  payments  on
29    the  home  loan and have made at least 2 consecutive payments
30    at the time of application.  The pledge from the Fund must be
31    used to secure the payments on the home loan  that  are  past
32    due.   The  amount of the Fund that is pledged to a financial
33    institution for a home loan shall not exceed  the  amount  of
 
                            -3-                LRB9205889REpc
 1    the mortgage payments that are past due.
 2        (3)  No more than 3% of the Fund may be pledged to secure
 3    home  loans  that  are  or  would be outstanding from any one
 4    financial institution at any point in time.
 5        (4)  The State Treasurer's costs to administer  the  Fund
 6    may be paid from the Fund.  The amount paid from the Fund for
 7    this  purpose  may not exceed 5% of the amount of the Fund in
 8    any one State fiscal year.

 9        Section 20.  Participation by financial institutions.  No
10    financial institution shall be compelled in any  instance  to
11    apply  for  a pledge of collateral from the Fund or to modify
12    its credit standards with respect to any pending  application
13    for  a  home loan as a result of its decision to apply or not
14    to apply for a  pledge  of  collateral  from  the  Fund.  The
15    acceptance  of  a pledge of collateral from the Fund does not
16    prohibit the financial institution from exercising collection
17    actions or from taking other adverse action with respect to a
18    home loan  if  the  status  of  the  home  loan  deteriorates
19    subsequent to the acceptance of the pledge from the Fund.

20        Section  25.   Rules and procedures.  The State Treasurer
21    shall establish rules and procedures for  the  administration
22    of  the Fund and the Home Loan Collateral Fund Act including,
23    but  not  limited  to,  the  process  by  which  a  financial
24    institution may apply for a pledge of a portion of  the  Fund
25    and  the  process  or  criteria  that the State Treasurer may
26    employ in approving or denying an application by a  financial
27    institution.

28        Section  95.   The State Finance Act is amended by adding
29    Section 5.545 as follows:

30        (30 ILCS 105/5.545 new)
 
                            -4-                LRB9205889REpc
 1        Sec. 5.545.  The Home Loan Collateral Fund.  This Fund is
 2    not subject to the provisions of subsection (c) of Section 5.

 3        Section 99.  Effective date.  This Act takes effect  upon
 4    becoming law.

[ Top ]