Rep. Margo McDermed

Filed: 4/17/2018

 

 


 

 


 
10000HB4404ham002LRB100 16949 XWW 38323 a

1
AMENDMENT TO HOUSE BILL 4404

2    AMENDMENT NO. ______. Amend House Bill 4404, AS AMENDED, by
3replacing everything after the enacting clause with the
4following:
 
5    "Section 5. The Residential Mortgage License Act of 1987 is
6amended by changing Sections 1-3 and 1-4 as follows:
 
7    (205 ILCS 635/1-3)  (from Ch. 17, par. 2321-3)
8    Sec. 1-3. Necessity for license; scope of Act.
9    (a) No person, partnership, association, corporation or
10other entity shall engage in the business of brokering,
11funding, originating, servicing or purchasing of residential
12mortgage loans without first obtaining a license from the
13Secretary in accordance with the licensing procedure provided
14in this Article I and such regulations as may be promulgated by
15the Secretary. The licensing provisions of this Section shall
16not apply to any entity engaged solely in commercial mortgage

 

 

10000HB4404ham002- 2 -LRB100 16949 XWW 38323 a

1lending or to any person, partnership association, corporation
2or other entity exempted pursuant to Section 1-4, subsection
3(d), of this Act or in accordance with regulations promulgated
4by the Secretary hereunder. No provision of this Act shall
5apply to an exempt person or entity as defined in items (1) and
6(1.5) of subsection (d) of Section 1-4 of this Act.
7Notwithstanding anything to the contrary in the preceding
8sentence, an individual acting as a mortgage loan originator
9who is not employed by and acting for an entity described in
10item (1) of subsection (tt) of Section 1-4 of this Act shall be
11subject to the mortgage loan originator licensing requirements
12of Article VII of this Act.
13    Effective January 1, 2011, no provision of this Act shall
14apply to an exempt person or entity as defined in item (1.8) of
15subsection (d) of Section 1-4 of this Act. Notwithstanding
16anything to the contrary in the preceding sentence, an
17individual acting as a mortgage loan originator who is not
18employed by and acting for an entity described in item (1) of
19subsection (tt) of Section 1-4 of this Act shall be subject to
20the mortgage loan originator licensing requirements of Article
21VII of this Act, and provided that an individual acting as a
22mortgage loan originator under item (1.8) of subsection (d) of
23Section 1-4 of this Act shall be further subject to a
24determination by the U.S. Department of Housing and Urban
25Development through final rulemaking or other authorized
26agency determination under the federal Secure and Fair

 

 

10000HB4404ham002- 3 -LRB100 16949 XWW 38323 a

1Enforcement for Mortgage Licensing Act of 2008.
2    (a-1) A person who is exempt from licensure pursuant to
3paragraph (ii) of item (1) of subsection (d) of Section 1-4 of
4this Act as a federally chartered savings bank that is
5registered with the Nationwide Multistate Mortgage Licensing
6System and Registry may apply to the Secretary for an exempt
7company registration for the purpose of sponsoring one or more
8individuals subject to the mortgage loan originator licensing
9requirements of Article VII of this Act. Registration with the
10Division of Banking of the Department shall not affect the
11exempt status of the applicant.
12        (1) A mortgage loan originator eligible for licensure
13    under this subsection shall (A) be covered under an
14    exclusive written contract with, and originate residential
15    mortgage loans solely on behalf of, that exempt person; and
16    (B) hold a current, valid insurance producer license under
17    Article XXXI of the Illinois Insurance Code.
18        (2) An exempt person shall: (A) fulfill any reporting
19    requirements required by the Nationwide Mortgage Licensing
20    System and Registry or the Secretary; (B) provide a blanket
21    surety bond pursuant to Section 7-12 of this Act covering
22    the activities of all its sponsored mortgage loan
23    originators; (C) reasonably supervise the activities of
24    all its sponsored mortgage loan originators; (D) comply
25    with all rules and orders (including the averments
26    contained in Section 2-4 of this Act as applicable to a

 

 

10000HB4404ham002- 4 -LRB100 16949 XWW 38323 a

1    non-licensed exempt entity provided for in this Section)
2    that the Secretary deems necessary to ensure compliance
3    with the federal SAFE Act; and (E) pay an annual
4    registration fee established by the Director.
5        (3) The Secretary may deny an exempt company
6    registration to an exempt person or fine, suspend, or
7    revoke an exempt company registration if the Secretary
8    finds one of the following:
9            (A) that the exempt person is not a person of
10        honesty, truthfulness, or good character;
11            (B) that the exempt person violated any applicable
12        law, rule, or order;
13            (C) that the exempt person refused or failed to
14        furnish, within a reasonable time, any information or
15        make any report that may be required by the Secretary;
16            (D) that the exempt person had a final judgment
17        entered against him or her in a civil action on grounds
18        of fraud, deceit, or misrepresentation, and the
19        conduct on which the judgment is based indicates that
20        it would be contrary to the interest of the public to
21        permit the exempt person to manage a loan originator;
22            (E) that the exempt person had an order entered
23        against him or her involving fraud, deceit, or
24        misrepresentation by an administrative agency of this
25        State, the federal government, or any other state or
26        territory of the United States, and the facts relating

 

 

10000HB4404ham002- 5 -LRB100 16949 XWW 38323 a

1        to the order indicate that it would be contrary to the
2        interest of the public to permit the exempt person to
3        manage a loan originator;
4            (F) that the exempt person made a material
5        misstatement or suppressed or withheld information on
6        the application for an exempt company registration or
7        any document required to be filed with the Secretary;
8        or
9            (G) that the exempt person violated Section 4-5 of
10        this Act.
11    (a-5) An entity that is exempt from licensure pursuant to
12item (7) of subsection (d) of Section 1-4 of this Act as an
13independent loan processing entity shall annually apply to the
14Secretary through the Nationwide Multistate Licensing System
15and Registry for an exempt company registration for the purpose
16of sponsoring one or more individuals subject to the mortgage
17loan originator licensing requirements of Article VII of this
18Act. A loan processor who performs clerical or support duties
19at the direction of and subject to the supervision and
20instruction of a licensed mortgage loan originator sponsored by
21an independent loan processing entity shall be exempt from his
22or her own licensing as a mortgage loan originator. An
23independent loan processing entity shall not be subject to
24examination by the Secretary. The Secretary may adopt rules to
25implement any provisions necessary for the administration of
26this subsection.

 

 

10000HB4404ham002- 6 -LRB100 16949 XWW 38323 a

1    (b) No person, partnership, association, corporation, or
2other entity except a licensee under this Act or an entity
3exempt from licensing pursuant to Section 1-4, subsection (d),
4of this Act shall do any business under any name or title, or
5circulate or use any advertising or make any representation or
6give any information to any person, which indicates or
7reasonably implies activity within the scope of this Act.
8    (c) The Secretary may, through the Attorney General,
9request the circuit court of either Cook or Sangamon County to
10issue an injunction to restrain any person from violating or
11continuing to violate any of the foregoing provisions of this
12Section.
13    (d) When the Secretary has reasonable cause to believe that
14any entity which has not submitted an application for licensure
15is conducting any of the activities described in subsection (a)
16hereof, the Secretary shall have the power to examine all books
17and records of the entity and any additional documentation
18necessary in order to determine whether such entity should
19become licensed under this Act.
20    (d-1) The Secretary may issue orders against any person if
21the Secretary has reasonable cause to believe that an unsafe,
22unsound, or unlawful practice has occurred, is occurring, or is
23about to occur, if any person has violated, is violating, or is
24about to violate any law, rule, or written agreement with the
25Secretary, or for the purposes of administering the provisions
26of this Act and any rule adopted in accordance with this Act.

 

 

10000HB4404ham002- 7 -LRB100 16949 XWW 38323 a

1    (e) Any person, partnership, association, corporation or
2other entity who violates any provision of this Section commits
3a business offense and shall be fined an amount not to exceed
4$25,000. A mortgage loan brokered, funded, originated,
5serviced, or purchased by a party who is not licensed under
6this Section shall not be held to be invalid solely on the
7basis of a violation under this Section. The changes made to
8this Section by this amendatory Act of the 99th General
9Assembly are declarative of existing law.
10    (f) Each person, partnership, association, corporation or
11other entity conducting activities regulated by this Act shall
12be issued one license. Each office, place of business or
13location at which a residential mortgage licensee conducts any
14part of his or her business must be recorded with the Secretary
15pursuant to Section 2-8 of this Act.
16    (g) Licensees under this Act shall solicit, broker, fund,
17originate, service and purchase residential mortgage loans
18only in conformity with the provisions of this Act and such
19rules and regulations as may be promulgated by the Secretary.
20    (h) This Act applies to all entities doing business in
21Illinois as residential mortgage bankers, as defined by "An Act
22to provide for the regulation of mortgage bankers", approved
23September 15, 1977, as amended, regardless of whether licensed
24under that or any prior Act. Any existing residential mortgage
25lender or residential mortgage broker in Illinois whether or
26not previously licensed, must operate in accordance with this

 

 

10000HB4404ham002- 8 -LRB100 16949 XWW 38323 a

1Act.
2    (i) This Act is a successor Act to and a continuance of the
3regulation of residential mortgage bankers provided in, "An Act
4to provide for the regulation of mortgage bankers", approved
5September 15, 1977, as amended.
6    Entities and persons subject to the predecessor Act shall
7be subject to this Act from and after its effective date.
8(Source: P.A. 98-492, eff. 8-16-13; 99-113, eff. 7-23-15.)
 
9    (205 ILCS 635/1-4)
10    Sec. 1-4. Definitions. The following words and phrases have
11the meanings given to them in this Section:
12        (a) "Residential real property" or "residential real
13    estate" shall mean any real property located in Illinois,
14    upon which is constructed or intended to be constructed a
15    dwelling. Those terms include a manufactured home as
16    defined in subdivision (53) of Section 9-102 of the Uniform
17    Commercial Code which is real property as defined in
18    Section 5-35 of the Conveyance and Encumbrance of
19    Manufactured Homes as Real Property and Severance Act.
20        (b) "Making a residential mortgage loan" or "funding a
21    residential mortgage loan" shall mean for compensation or
22    gain, either directly or indirectly, advancing funds or
23    making a commitment to advance funds to a loan applicant
24    for a residential mortgage loan.
25        (c) "Soliciting, processing, placing, or negotiating a

 

 

10000HB4404ham002- 9 -LRB100 16949 XWW 38323 a

1    residential mortgage loan" shall mean for compensation or
2    gain, either directly or indirectly, accepting or offering
3    to accept an application for a residential mortgage loan,
4    assisting or offering to assist in the processing of an
5    application for a residential mortgage loan on behalf of a
6    borrower, or negotiating or offering to negotiate the terms
7    or conditions of a residential mortgage loan with a lender
8    on behalf of a borrower including, but not limited to, the
9    submission of credit packages for the approval of lenders,
10    the preparation of residential mortgage loan closing
11    documents, including a closing in the name of a broker.
12        (d) "Exempt person or entity" shall mean the following:
13            (1) (i) Any banking organization or foreign
14        banking corporation licensed by the Illinois
15        Commissioner of Banks and Real Estate or the United
16        States Comptroller of the Currency to transact
17        business in this State; (ii) any national bank,
18        federally chartered savings and loan association,
19        federal savings bank, federal credit union; (iii)
20        (blank); (iv) any bank, savings and loan association,
21        savings bank, or credit union organized under the laws
22        of this or any other state; (v) any Illinois Consumer
23        Installment Loan Act licensee; (vi) any insurance
24        company authorized to transact business in this State;
25        (vii) any entity engaged solely in commercial mortgage
26        lending; (viii) any service corporation of a savings

 

 

10000HB4404ham002- 10 -LRB100 16949 XWW 38323 a

1        and loan association or savings bank organized under
2        the laws of this State or the service corporation of a
3        federally chartered savings and loan association or
4        savings bank having its principal place of business in
5        this State, other than a service corporation licensed
6        or entitled to reciprocity under the Real Estate
7        License Act of 2000; or (ix) any first tier subsidiary
8        of a bank, the charter of which is issued under the
9        Illinois Banking Act by the Illinois Commissioner of
10        Banks and Real Estate, or the first tier subsidiary of
11        a bank chartered by the United States Comptroller of
12        the Currency and that has its principal place of
13        business in this State, provided that the first tier
14        subsidiary is regularly examined by the Illinois
15        Commissioner of Banks and Real Estate or the
16        Comptroller of the Currency, or a consumer compliance
17        examination is regularly conducted by the Federal
18        Reserve Board.
19            (1.5) Any employee of a person or entity mentioned
20        in item (1) of this subsection, when acting for such
21        person or entity, or any registered mortgage loan
22        originator when acting for an entity described in
23        subsection (tt) of this Section.
24            (1.8) Any person or entity that does not originate
25        mortgage loans in the ordinary course of business, but
26        makes or acquires residential mortgage loans with his

 

 

10000HB4404ham002- 11 -LRB100 16949 XWW 38323 a

1        or her own funds for his or her or its own investment
2        without intent to make, acquire, or resell more than 3
3        residential mortgage loans in any one calendar year.
4            (2) (Blank).
5            (3) Any person employed by a licensee to assist in
6        the performance of the residential mortgage licensee's
7        activities regulated by this Act who is compensated in
8        any manner by only one licensee.
9            (4) (Blank).
10            (5) Any individual, corporation, partnership, or
11        other entity that originates, services, or brokers
12        residential mortgage loans, as these activities are
13        defined in this Act, and who or which receives no
14        compensation for those activities, subject to the
15        Commissioner's regulations and the federal Secure and
16        Fair Enforcement for Mortgage Licensing Act of 2008 and
17        the rules promulgated under that Act with regard to the
18        nature and amount of compensation.
19            (6) (Blank).
20            (7) Any entity engaged solely in providing loan
21        processing services through the sponsoring of
22        individuals acting pursuant to subsection (d) of
23        Section 7-1A of this Act.
24        (e) "Licensee" or "residential mortgage licensee"
25    shall mean a person, partnership, association,
26    corporation, or any other entity who or which is licensed

 

 

10000HB4404ham002- 12 -LRB100 16949 XWW 38323 a

1    pursuant to this Act to engage in the activities regulated
2    by this Act.
3        (f) "Mortgage loan" "residential mortgage loan" or
4    "home mortgage loan" shall mean any loan primarily for
5    personal, family, or household use that is secured by a
6    mortgage, deed of trust, or other equivalent consensual
7    security interest on a dwelling as defined in Section
8    103(v) of the federal Truth in Lending Act, or residential
9    real estate upon which is constructed or intended to be
10    constructed a dwelling.
11        (g) "Lender" shall mean any person, partnership,
12    association, corporation, or any other entity who either
13    lends or invests money in residential mortgage loans.
14        (h) "Ultimate equitable owner" shall mean a person who,
15    directly or indirectly, owns or controls an ownership
16    interest in a corporation, foreign corporation, alien
17    business organization, trust, or any other form of business
18    organization regardless of whether the person owns or
19    controls the ownership interest through one or more persons
20    or one or more proxies, powers of attorney, nominees,
21    corporations, associations, partnerships, trusts, joint
22    stock companies, or other entities or devices, or any
23    combination thereof.
24        (i) "Residential mortgage financing transaction" shall
25    mean the negotiation, acquisition, sale, or arrangement
26    for or the offer to negotiate, acquire, sell, or arrange

 

 

10000HB4404ham002- 13 -LRB100 16949 XWW 38323 a

1    for, a residential mortgage loan or residential mortgage
2    loan commitment.
3        (j) "Personal residence address" shall mean a street
4    address and shall not include a post office box number.
5        (k) "Residential mortgage loan commitment" shall mean
6    a contract for residential mortgage loan financing.
7        (l) "Party to a residential mortgage financing
8    transaction" shall mean a borrower, lender, or loan broker
9    in a residential mortgage financing transaction.
10        (m) "Payments" shall mean payment of all or any of the
11    following: principal, interest and escrow reserves for
12    taxes, insurance and other related reserves, and
13    reimbursement for lender advances.
14        (n) "Commissioner" shall mean the Commissioner of
15    Banks and Real Estate, except that, beginning on April 6,
16    2009 (the effective date of Public Act 95-1047), all
17    references in this Act to the Commissioner of Banks and
18    Real Estate are deemed, in appropriate contexts, to be
19    references to the Secretary of Financial and Professional
20    Regulation, or his or her designee, including the Director
21    of the Division of Banking of the Department of Financial
22    and Professional Regulation.
23        (n-1) "Director" shall mean the Director of the
24    Division of Banking of the Department of Financial and
25    Professional Regulation, except that, beginning on July
26    31, 2009 (the effective date of Public Act 96-112), all

 

 

10000HB4404ham002- 14 -LRB100 16949 XWW 38323 a

1    references in this Act to the Director are deemed, in
2    appropriate contexts, to be the Secretary of Financial and
3    Professional Regulation, or his or her designee, including
4    the Director of the Division of Banking of the Department
5    of Financial and Professional Regulation.
6        (o) "Loan brokering", "brokering", or "brokerage
7    service" shall mean the act of helping to obtain from
8    another entity, for a borrower, a loan secured by
9    residential real estate situated in Illinois or assisting a
10    borrower in obtaining a loan secured by residential real
11    estate situated in Illinois in return for consideration to
12    be paid by either the borrower or the lender including, but
13    not limited to, contracting for the delivery of residential
14    mortgage loans to a third party lender and soliciting,
15    processing, placing, or negotiating residential mortgage
16    loans.
17        (p) "Loan broker" or "broker" shall mean a person,
18    partnership, association, corporation, or limited
19    liability company, other than those persons, partnerships,
20    associations, corporations, or limited liability companies
21    exempted from licensing pursuant to Section 1-4,
22    subsection (d), of this Act, who performs the activities
23    described in subsections (c), (o), and (yy) of this
24    Section.
25        (q) "Servicing" shall mean the collection or
26    remittance for or the right or obligation to collect or

 

 

10000HB4404ham002- 15 -LRB100 16949 XWW 38323 a

1    remit for any lender, noteowner, noteholder, or for a
2    licensee's own account, of payments, interests, principal,
3    and trust items such as hazard insurance and taxes on a
4    residential mortgage loan in accordance with the terms of
5    the residential mortgage loan; and includes loan payment
6    follow-up, delinquency loan follow-up, loan analysis and
7    any notifications to the borrower that are necessary to
8    enable the borrower to keep the loan current and in good
9    standing. "Servicing" includes management of third-party
10    entities acting on behalf of a residential mortgage
11    licensee for the collection of delinquent payments and the
12    use by such third-party entities of said licensee's
13    servicing records or information, including their use in
14    foreclosure.
15        (r) "Full service office" shall mean an office,
16    provided by the licensee and not subleased from the
17    licensee's employees, and staff in Illinois reasonably
18    adequate to handle efficiently communications, questions,
19    and other matters relating to any application for, or an
20    existing home mortgage secured by residential real estate
21    situated in Illinois with respect to which the licensee is
22    brokering, funding originating, purchasing, or servicing.
23    The management and operation of each full service office
24    must include observance of good business practices such as
25    proper signage; adequate, organized, and accurate books
26    and records; ample phone lines, hours of business, staff

 

 

10000HB4404ham002- 16 -LRB100 16949 XWW 38323 a

1    training and supervision, and provision for a mechanism to
2    resolve consumer inquiries, complaints, and problems. The
3    Commissioner shall issue regulations with regard to these
4    requirements and shall include an evaluation of compliance
5    with this Section in his or her periodic examination of
6    each licensee.
7        (s) "Purchasing" shall mean the purchase of
8    conventional or government-insured mortgage loans secured
9    by residential real estate situated in Illinois from either
10    the lender or from the secondary market.
11        (t) "Borrower" shall mean the person or persons who
12    seek the services of a loan broker, originator, or lender.
13        (u) "Originating" shall mean the issuing of
14    commitments for and funding of residential mortgage loans.
15        (v) "Loan brokerage agreement" shall mean a written
16    agreement in which a broker or loan broker agrees to do
17    either of the following:
18            (1) obtain a residential mortgage loan for the
19        borrower or assist the borrower in obtaining a
20        residential mortgage loan; or
21            (2) consider making a residential mortgage loan to
22        the borrower.
23        (w) "Advertisement" shall mean the attempt by
24    publication, dissemination, or circulation to induce,
25    directly or indirectly, any person to enter into a
26    residential mortgage loan agreement or residential

 

 

10000HB4404ham002- 17 -LRB100 16949 XWW 38323 a

1    mortgage loan brokerage agreement relative to a mortgage
2    secured by residential real estate situated in Illinois.
3        (x) "Residential Mortgage Board" shall mean the
4    Residential Mortgage Board created in Section 1-5 of this
5    Act.
6        (y) "Government-insured mortgage loan" shall mean any
7    mortgage loan made on the security of residential real
8    estate insured by the Department of Housing and Urban
9    Development or Farmers Home Loan Administration, or
10    guaranteed by the Veterans Administration.
11        (z) "Annual audit" shall mean a certified audit of the
12    licensee's books and records and systems of internal
13    control performed by a certified public accountant in
14    accordance with generally accepted accounting principles
15    and generally accepted auditing standards.
16        (aa) "Financial institution" shall mean a savings and
17    loan association, savings bank, credit union, or a bank
18    organized under the laws of Illinois or a savings and loan
19    association, savings bank, credit union or a bank organized
20    under the laws of the United States and headquartered in
21    Illinois.
22        (bb) "Escrow agent" shall mean a third party,
23    individual or entity charged with the fiduciary obligation
24    for holding escrow funds on a residential mortgage loan
25    pending final payout of those funds in accordance with the
26    terms of the residential mortgage loan.

 

 

10000HB4404ham002- 18 -LRB100 16949 XWW 38323 a

1        (cc) "Net worth" shall have the meaning ascribed
2    thereto in Section 3-5 of this Act.
3        (dd) "Affiliate" shall mean:
4            (1) any entity that directly controls or is
5        controlled by the licensee and any other company that
6        is directly affecting activities regulated by this Act
7        that is controlled by the company that controls the
8        licensee;
9            (2) any entity:
10                (A) that is controlled, directly or
11            indirectly, by a trust or otherwise, by or for the
12            benefit of shareholders who beneficially or
13            otherwise control, directly or indirectly, by
14            trust or otherwise, the licensee or any company
15            that controls the licensee; or
16                (B) a majority of the directors or trustees of
17            which constitute a majority of the persons holding
18            any such office with the licensee or any company
19            that controls the licensee;
20            (3) any company, including a real estate
21        investment trust, that is sponsored and advised on a
22        contractual basis by the licensee or any subsidiary or
23        affiliate of the licensee.
24        (ee) "First tier subsidiary" shall be defined by
25    regulation incorporating the comparable definitions used
26    by the Office of the Comptroller of the Currency and the

 

 

10000HB4404ham002- 19 -LRB100 16949 XWW 38323 a

1    Illinois Commissioner of Banks and Real Estate.
2        (ff) "Gross delinquency rate" means the quotient
3    determined by dividing (1) the sum of (i) the number of
4    government-insured residential mortgage loans funded or
5    purchased by a licensee in the preceding calendar year that
6    are delinquent and (ii) the number of conventional
7    residential mortgage loans funded or purchased by the
8    licensee in the preceding calendar year that are delinquent
9    by (2) the sum of (i) the number of government-insured
10    residential mortgage loans funded or purchased by the
11    licensee in the preceding calendar year and (ii) the number
12    of conventional residential mortgage loans funded or
13    purchased by the licensee in the preceding calendar year.
14        (gg) "Delinquency rate factor" means the factor set by
15    rule of the Commissioner that is multiplied by the average
16    gross delinquency rate of licensees, determined annually
17    for the immediately preceding calendar year, for the
18    purpose of determining which licensees shall be examined by
19    the Commissioner pursuant to subsection (b) of Section 4-8
20    of this Act.
21        (hh) "Loan originator" means any natural person who,
22    for compensation or in the expectation of compensation,
23    either directly or indirectly makes, offers to make,
24    solicits, places, or negotiates a residential mortgage
25    loan. This definition applies only to Section 7-1 of this
26    Act.

 

 

10000HB4404ham002- 20 -LRB100 16949 XWW 38323 a

1        (ii) "Confidential supervisory information" means any
2    report of examination, visitation, or investigation
3    prepared by the Commissioner under this Act, any report of
4    examination visitation, or investigation prepared by the
5    state regulatory authority of another state that examines a
6    licensee, any document or record prepared or obtained in
7    connection with or relating to any examination,
8    visitation, or investigation, and any record prepared or
9    obtained by the Commissioner to the extent that the record
10    summarizes or contains information derived from any
11    report, document, or record described in this subsection.
12    "Confidential supervisory information" does not include
13    any information or record routinely prepared by a licensee
14    and maintained in the ordinary course of business or any
15    information or record that is required to be made publicly
16    available pursuant to State or federal law or rule.
17        (jj) "Mortgage loan originator" means an individual
18    who for compensation or gain or in the expectation of
19    compensation or gain:
20            (i) takes a residential mortgage loan application;
21        or
22            (ii) offers or negotiates terms of a residential
23        mortgage loan.
24        "Mortgage loan originator" includes an individual
25    engaged in loan modification activities as defined in
26    subsection (yy) of this Section. A mortgage loan originator

 

 

10000HB4404ham002- 21 -LRB100 16949 XWW 38323 a

1    engaged in loan modification activities shall report those
2    activities to the Department of Financial and Professional
3    Regulation in the manner provided by the Department;
4    however, the Department shall not impose a fee for
5    reporting, nor require any additional qualifications to
6    engage in those activities beyond those provided pursuant
7    to this Act for mortgage loan originators.
8        "Mortgage loan originator" does not include an
9    individual engaged solely as a loan processor or
10    underwriter except as otherwise provided in subsection (d)
11    of Section 7-1A of this Act.
12        "Mortgage loan originator" does not include a person or
13    entity that only performs real estate brokerage activities
14    and is licensed in accordance with the Real Estate License
15    Act of 2000, unless the person or entity is compensated by
16    a lender, a mortgage broker, or other mortgage loan
17    originator, or by any agent of that lender, mortgage
18    broker, or other mortgage loan originator.
19        "Mortgage loan originator" does not include a person or
20    entity solely involved in extensions of credit relating to
21    timeshare plans, as that term is defined in Section
22    101(53D) of Title 11, United States Code.
23        (kk) "Depository institution" has the same meaning as
24    in Section 3 of the Federal Deposit Insurance Act, and
25    includes any credit union.
26        (ll) "Dwelling" means a residential structure or

 

 

10000HB4404ham002- 22 -LRB100 16949 XWW 38323 a

1    mobile home which contains one to 4 family housing units,
2    or individual units of condominiums or cooperatives.
3        (mm) "Immediate family member" means a spouse, child,
4    sibling, parent, grandparent, or grandchild, and includes
5    step-parents, step-children, step-siblings, or adoptive
6    relationships.
7        (nn) "Individual" means a natural person.
8        (oo) "Loan processor or underwriter" means an
9    individual who performs clerical or support duties as an
10    employee at the direction of and subject to the supervision
11    and instruction of a person licensed, or exempt from
12    licensing, under this Act. "Clerical or support duties"
13    includes subsequent to the receipt of an application:
14            (i) the receipt, collection, distribution, and
15        analysis of information common for the processing or
16        underwriting of a residential mortgage loan; and
17            (ii) communicating with a consumer to obtain the
18        information necessary for the processing or
19        underwriting of a loan, to the extent that the
20        communication does not include offering or negotiating
21        loan rates or terms, or counseling consumers about
22        residential mortgage loan rates or terms. An
23        individual engaging solely in loan processor or
24        underwriter activities shall not represent to the
25        public, through advertising or other means of
26        communicating or providing information, including the

 

 

10000HB4404ham002- 23 -LRB100 16949 XWW 38323 a

1        use of business cards, stationery, brochures, signs,
2        rate lists, or other promotional items, that the
3        individual can or will perform any of the activities of
4        a mortgage loan originator.
5        (pp) "Nationwide Mortgage Licensing System and
6    Registry" means a mortgage licensing system developed and
7    maintained by the Conference of State Bank Supervisors and
8    the American Association of Residential Mortgage
9    Regulators for the licensing and registration of licensed
10    mortgage loan originators.
11        (qq) "Nontraditional mortgage product" means any
12    mortgage product other than a 30-year fixed rate mortgage.
13        (rr) "Person" means a natural person, corporation,
14    company, limited liability company, partnership, or
15    association.
16        (ss) "Real estate brokerage activity" means any
17    activity that involves offering or providing real estate
18    brokerage services to the public, including:
19            (1) acting as a real estate agent or real estate
20        broker for a buyer, seller, lessor, or lessee of real
21        property;
22            (2) bringing together parties interested in the
23        sale, purchase, lease, rental, or exchange of real
24        property;
25            (3) negotiating, on behalf of any party, any
26        portion of a contract relating to the sale, purchase,

 

 

10000HB4404ham002- 24 -LRB100 16949 XWW 38323 a

1        lease, rental, or exchange of real property, other than
2        in connection with providing financing with respect to
3        any such transaction;
4            (4) engaging in any activity for which a person
5        engaged in the activity is required to be registered or
6        licensed as a real estate agent or real estate broker
7        under any applicable law; or
8            (5) offering to engage in any activity, or act in
9        any capacity, described in this subsection (ss).
10        (tt) "Registered mortgage loan originator" means any
11    individual that:
12            (1) meets the definition of mortgage loan
13        originator and is an employee of:
14                (A) a depository institution;
15                (B) a subsidiary that is:
16                    (i) owned and controlled by a depository
17                institution; and
18                    (ii) regulated by a federal banking
19                agency; or
20                (C) an institution regulated by the Farm
21            Credit Administration; and
22            (2) is registered with, and maintains a unique
23        identifier through, the Nationwide Mortgage Licensing
24        System and Registry.
25        (uu) "Unique identifier" means a number or other
26    identifier assigned by protocols established by the

 

 

10000HB4404ham002- 25 -LRB100 16949 XWW 38323 a

1    Nationwide Mortgage Licensing System and Registry.
2        (vv) "Residential mortgage license" means a license
3    issued pursuant to Section 1-3, 2-2, or 2-6 of this Act.
4        (ww) "Mortgage loan originator license" means a
5    license issued pursuant to Section 7-1A, 7-3, or 7-6 of
6    this Act.
7        (xx) "Secretary" means the Secretary of the Department
8    of Financial and Professional Regulation, or a person
9    authorized by the Secretary or by this Act to act in the
10    Secretary's stead.
11        (yy) "Loan modification" means, for compensation or
12    gain, either directly or indirectly offering or
13    negotiating on behalf of a borrower or homeowner to adjust
14    the terms of a residential mortgage loan in a manner not
15    provided for in the original or previously modified
16    mortgage loan.
17        (zz) "Short sale facilitation" means, for compensation
18    or gain, either directly or indirectly offering or
19    negotiating on behalf of a borrower or homeowner to
20    facilitate the sale of residential real estate subject to
21    one or more residential mortgage loans or debts
22    constituting liens on the property in which the proceeds
23    from selling the residential real estate will fall short of
24    the amount owed and the lien holders are contacted to agree
25    to release their lien on the residential real estate and
26    accept less than the full amount owed on the debt.

 

 

10000HB4404ham002- 26 -LRB100 16949 XWW 38323 a

1    The Commissioner may define by rule and regulation any
2terms used in this Act for the efficient and clear
3administration of this Act.
4(Source: P.A. 98-749, eff. 7-16-14; 98-1081, eff. 1-1-15;
599-78, eff. 7-20-15.)
 
6    Section 99. Effective date. This Act takes effect upon
7becoming law.".