Public Act 094-1029
 
SB0304 Enrolled LRB094 06877 JAM 36984 b

    AN ACT concerning government.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Residential Real Property Disclosure Act is
amended by changing Section 70 as follows:
 
    (765 ILCS 77/70)
    Sec. 70. Predatory lending database pilot program.
    (a) As used in this Article:
    "Borrower" means a person seeking a mortgage loan.
    "Broker" means a "broker" or "loan broker", as defined in
subsection (p) of Section 1-4 of the Residential Mortgage
License Act of 1987.
    "Closing agent" means an individual assigned by a title
insurance company or a broker or originator to ensure that the
execution of documents related to the closing of a real estate
sale or the refinancing of a real estate loan and the
disbursement of closing funds are in conformity with the
instructions of the entity financing the transaction.
    "Department" means the Department of Financial and
Professional Regulation.
    "Exempt person" means that term as it is defined in
subsections (d)(1) and (d)(1.5) of Section 1-4 of the
Residential Mortgage License Act of 1987.
    "Lender" means that term as it is defined in subsection (g)
of Section 1-4 of the Residential Mortgage License Act.
    "Licensee" means that term as it is defined in subsection
(e) of Section 1-4 of the Residential Mortgage License Act of
1987.
    "Mortgage loan" means that term as it is defined in
subsection (f) of Section 1-4 of the Residential Mortgage
License Act of 1987.
    "Originator" means a "loan originator" as defined in
subsection (hh) of Section 1-4 of the Residential Mortgage
License Act of 1987, except an exempt person.
    "Pilot program area" means all areas within Cook County
designated as such by the Department due to the high rate of
foreclosure on residential home mortgages that is primarily the
result of predatory lending practices. The Department shall
designate the pilot program area within 30 days after the
effective date of this amendatory Act of the 94th General
Assembly.
    "Title insurance company" means any domestic company
organized under the laws of this State for the purpose of
conducting the business of guaranteeing or insuring titles to
real estate and any title insurance company organized under the
laws of another State, the District of Columbia, or a foreign
government and authorized to transact the business of
guaranteeing or insuring titles to real estate in this State.
    (a-5) Inception date. The Secretary of Financial and
Professional Regulation shall declare in writing the date of
inception of the pilot program. The inception date shall be no
later than September 1, 2006, and shall be at least 30 days
after the date the Secretary issues a declaration establishing
that date. The Secretary's declaration shall be posted on the
Department's website, and the Department shall communicate the
declaration to affected licensees of the Department. Until the
inception date, none of the duties, obligations,
contingencies, or consequences of or from the pilot program
shall be imposed. The pilot program shall apply to all mortgage
applications that are governed by this Article and that are
made or taken on or after the inception of the pilot program.
    (b) A predatory lending database pilot program is
established within the pilot program area, effective upon the
inception date established by the Secretary of the Department.
The pilot program shall be in effect and operational continue
for a total of 4 years after its creation and shall be
administered in accordance with Article 3 of this Act. The
database created under this program shall be maintained and
administered by the Department. The database shall be designed
to allow brokers, originators, credit counselors, title
insurance companies, and closing agents to submit information
to the database online. The database shall not be designed to
allow those entities to retrieve information from the database,
except as otherwise provided in this Article. Information
submitted by the broker or originator to the Department may be
used to populate the online form submitted by a credit
counselor, title insurance company, or closing agent.
    (c) Within 10 days after taking a mortgage application, the
broker or originator for any mortgage on residential property
within the pilot program area must submit to the predatory
lending database all of the information required under Section
72 and any other information required by the Department by
rule. Within 7 days after receipt of the information, the
Department shall compare that information to credit counseling
standards developed by the Department by rule and issue to the
borrower and the broker or originator a determination of
whether credit counseling is recommended for the borrower. The
borrower may not waive credit counseling. If at any time after
submitting the information required under Section 72 the broker
or originator (i) changes the terms of the loan or (ii) issues
a new commitment to the borrower, then, within 5 days
thereafter, the broker or originator shall re-submit all of the
information required under Section 72 and, within 4 days after
receipt of the information re-submitted by the broker or
originator, the Department shall compare that information to
credit counseling standards developed by the Department by rule
and shall issue to the borrower and the broker or originator a
new determination of whether credit counseling is recommended
for the borrower based on the information re-submitted by the
broker or originator.
    (d) If the Department recommends credit counseling for the
borrower under subsection (c), then the Department shall notify
the borrower of all HUD-certified counseling agencies located
within the State and direct the borrower to interview with a
counselor associated with one of those agencies. Within 10 days
after receipt of the notice of HUD-certified counseling
agencies, the borrower shall select one of those agencies and
shall engage in an interview with a counselor associated with
that agency. Within 7 days after interviewing the borrower, the
credit counselor must submit to the predatory lending database
all of the information required under Section 74 and any other
information required by the Department by rule. Any costs
associated with credit counseling provided under the pilot
program shall be paid by the broker or originator. A credit
counselor who in good faith provides counseling services shall
not be liable to a broker or originator for civil damages,
except for willful or wanton misconduct on the part of the
counselor in providing the counseling services.
    (e) The broker or originator and the borrower may not take
any legally binding action concerning the loan transaction
until the later of the following:
        (1) the Department issues a determination not to
    recommend credit counseling for the borrower in accordance
    with subsection (c); or
        (2) the Department issues a determination that credit
    counseling is recommended for the borrower and the credit
    counselor submits all required information to the database
    in accordance with subsection (d).
    (f) Within 10 days after closing, the title insurance
company or closing agent must submit to the predatory lending
database all of the information required under Section 76 and
any other information required by the Department by rule.
    (g) The Upon recording the mortgage, the title insurance
company or closing agent shall attach to the mortgage must
simultaneously file with the recorder a certificate of its
compliance with the requirements of this Article, as generated
by the database. If the title insurance company or closing
agent fails to attach file the certificate of compliance, then
the mortgage is not recordable. In addition, if any lis pendens
for a residential mortgage foreclosure is recorded on the
property within the pilot program area, a certificate of
service must be simultaneously recorded that affirms that a
copy of the lis pendens was filed with the Department. If the
certificate of service is not recorded, then the lis pendens
pertaining to the residential mortgage foreclosure in question
is not recordable and is of no force and effect.
    (h) All information provided to the predatory lending
database under the program is confidential and is not subject
to disclosure under the Freedom of Information Act, except as
otherwise provided in this Article. Any borrower may authorize
in writing the release of database information. The Department
may use the information in the database without the consent of
the borrower: (i) for the purposes of administering and
enforcing the pilot program; (ii) to provide relevant
information to a credit counselor providing credit counseling
to a borrower under the pilot program; or (iii) to the
appropriate law enforcement agency or the applicable
administrative agency if the database information demonstrates
criminal, fraudulent, or otherwise illegal activity.
    (i) Nothing in this Article is intended to prevent a
borrower from making his or her own decision as to whether to
proceed with a transaction.
    (j) Any person who violates any provision of this Article
commits an unlawful practice within the meaning of the Consumer
Fraud and Deceptive Business Practices Act.
    (k) Not later than one year after the Department designates
the pilot program area and annually thereafter during the
existence of the pilot program, the Department shall report to
the Governor and to the General Assembly concerning its
administration and the effectiveness of the pilot program.
(Source: P.A. 94-280, eff. 1-1-06.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.