093_HB2576

 
                                     LRB093 09887 JLS 10136 b

 1        AN ACT concerning residential mortgage licensees.

 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
 5    is  amended by changing Sections 1-4, 1-5, and 4-8 and adding
 6    Sections 4-8.1, 4-8.2, 4-8.3,  4-8.4,  4-8.5,  4-8.6,  4-8.7,
 7    4-8.8, 4-8.9, 4-8.10, and 4-8.11  as follows:

 8        (205 ILCS 635/1-4) (from Ch. 17, par. 2321-4)
 9        Sec. 1-4.  Definitions.
10        (a)  "Residential  real  property"  or  "residential real
11    estate" shall  mean  real  property  located  in  this  State
12    improved  by  a one-to-four family dwelling used or occupied,
13    wholly or partly, as the home or residence  of  one  or  more
14    persons   and  may  refer,  subject  to  regulations  of  the
15    Commissioner, to unimproved real property  upon  which  those
16    kinds dwellings are to be constructed.
17        (b)  "Making  a  residential mortgage loan" or "funding a
18    residential mortgage loan" shall  mean  for  compensation  or
19    gain,  either  directly  or  indirectly,  advancing  funds or
20    making a commitment to advance funds to a loan applicant  for
21    a residential mortgage loan.
22        (c)  "Soliciting,  processing,  placing, or negotiating a
23    residential mortgage loan" shall  mean  for  compensation  or
24    gain, either directly or indirectly, accepting or offering to
25    accept  an  application  for  a  residential  mortgage  loan,
26    assisting  or  offering  to  assist  in  the processing of an
27    application for a residential mortgage loan on  behalf  of  a
28    borrower,  or  negotiating or offering to negotiate the terms
29    or conditions of a residential mortgage loan with a lender on
30    behalf of a borrower  including,  but  not  limited  to,  the
31    submission  of  credit  packages for the approval of lenders,
 
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 1    the  preparation  of  residential   mortgage   loan   closing
 2    documents, including a closing in the name of a broker.
 3        (d)  "Exempt entity" shall mean the following:
 4             (1) (i)  Any banking organization or foreign banking
 5        corporation  licensed  by  the  Illinois  Commissioner of
 6        Banks and Real Estate or the United States Comptroller of
 7        the Currency to transact business in this State; (ii) any
 8        national  bank,  federally  chartered  savings  and  loan
 9        association, federal savings bank, federal credit  union;
10        (iii)  any  pension  trust,  bank  trust,  or  bank trust
11        company; (iv) any savings and loan  association,  savings
12        bank, or credit union organized under the laws of this or
13        any  other  state;  (v) any Illinois Consumer Installment
14        Loan Act licensee; (vi) any insurance company  authorized
15        to  transact  business  in  this  State; (vii) any entity
16        engaged solely in commercial mortgage lending; (viii) any
17        service corporation of a savings and loan association  or
18        savings  bank  organized  under the laws of this State or
19        the service corporation of a federally chartered  savings
20        and loan association or savings bank having its principal
21        place  of  business  in  this State, other than a service
22        corporation licensed or entitled to reciprocity under the
23        Real Estate License Act of 2000; or (ix) any  first  tier
24        subsidiary  of  a  bank,  the  charter of which is issued
25        under  the  Illinois  Banking   Act   by   the   Illinois
26        Commissioner  of Banks and Real Estate, or the first tier
27        subsidiary of a  bank  chartered  by  the  United  States
28        Comptroller  of  the  Currency and that has its principal
29        place of business in this State, provided that the  first
30        tier  subsidiary  is  regularly  examined by the Illinois
31        Commissioner of Banks and Real Estate or the  Comptroller
32        of  the Currency, or a consumer compliance examination is
33        regularly conducted by the Federal Reserve Board.
34             (2)  Any person or entity  that  either  (i)  has  a
 
                            -3-      LRB093 09887 JLS 10136 b
 1        physical  presence in Illinois or (ii) does not originate
 2        mortgage loans in the ordinary course of business  making
 3        or  acquiring  residential mortgage loans with his or her
 4        or its own funds for his or her  or  its  own  investment
 5        without  intent  to make, acquire, or resell more than 10
 6        residential mortgage loans in any one calendar year.
 7             (3)  Any person employed by a licensee to assist  in
 8        the  performance  of the activities regulated by this Act
 9        who is compensated in any manner by only one licensee.
10             (4)  Any person licensed pursuant to the Real Estate
11        License Act of 2000, who engages only in  the  taking  of
12        applications  and  credit  and  appraisal  information to
13        forward to a licensee or an exempt entity under this  Act
14        and  who is compensated by either a licensee or an exempt
15        entity under this Act, but is not compensated  by  either
16        the buyer (applicant) or the seller.
17             (5)  Any  individual,  corporation,  partnership, or
18        other  entity  that  originates,  services,  or   brokers
19        residential  mortgage  loans,  as  these  activities  are
20        defined  in  this  Act,  and  who  or  which  receives no
21        compensation  for  those  activities,  subject   to   the
22        Commissioner's  regulations with regard to the nature and
23        amount of compensation.
24             (6)  A person who prepares supporting  documentation
25        for  a  residential  mortgage loan application taken by a
26        licensee and performs  ministerial functions pursuant  to
27        specific   instructions   of  the  licensee  who  neither
28        requires nor permits the preparer to exercise his or  her
29        discretion  or  judgment;  provided that this activity is
30        engaged in  pursuant  to  a  binding,  written  agreement
31        between the licensee and the preparer that:
32                  (A)  holds  the  licensee fully accountable for
33             the preparer's action; and
34                  (B)  otherwise meets the requirements  of  this
 
                            -4-      LRB093 09887 JLS 10136 b
 1             Section   and  this  Act,  does  not  undermine  the
 2             purposes  of  this  Act,  and  is  approved  by  the
 3             Commissioner.
 4        (e)  "Licensee" or "residential mortgage licensee"  shall
 5    mean  a person, partnership, association, corporation, or any
 6    other entity who or which is licensed pursuant to this Act to
 7    engage in the activities regulated by this Act.
 8        (f)  "Mortgage loan",  "residential  mortgage  loan",  or
 9    "home  mortgage loan" shall mean a loan to or for the benefit
10    of any natural person made primarily for personal, family, or
11    household use, primarily secured  by  either  a  mortgage  on
12    residential  real  property or certificates of stock or other
13    evidence of ownership interests  in  and  proprietary  leases
14    from,   corporations,   partnerships,  or  limited  liability
15    companies formed for the purpose of cooperative ownership  of
16    residential real property, all located in Illinois.
17        (g)  "Lender"   shall   mean   any  person,  partnership,
18    association, corporation, or  any  other  entity  who  either
19    lends or invests money in residential mortgage loans.
20        (h)  "Ultimate  equitable owner" shall mean a person who,
21    directly  or  indirectly,  owns  or  controls  an   ownership
22    interest   in   a  corporation,  foreign  corporation,  alien
23    business organization, trust, or any other form  of  business
24    organization   regardless  of  whether  the  person  owns  or
25    controls the ownership interest through one or  more  persons
26    or  one  or  more  proxies,  powers  of  attorney,  nominees,
27    corporations, associations, partnerships, trusts, joint stock
28    companies,  or  other entities or devices, or any combination
29    thereof.
30        (i)  "Residential mortgage financing  transaction"  shall
31    mean  the  negotiation, acquisition, sale, or arrangement for
32    or the offer to negotiate, acquire, sell, or arrange  for,  a
33    residential   mortgage  loan  or  residential  mortgage  loan
34    commitment.
 
                            -5-      LRB093 09887 JLS 10136 b
 1        (j)  "Personal residence address"  shall  mean  a  street
 2    address and shall not include a post office box number.
 3        (k)  "Residential  mortgage loan commitment" shall mean a
 4    contract for residential mortgage loan financing.
 5        (l)  "Party   to   a   residential   mortgage   financing
 6    transaction" shall mean a borrower, lender, or loan broker in
 7    a residential mortgage financing transaction.
 8        (m)  "Payments" shall mean payment of all or any  of  the
 9    following: principal, interest and escrow reserves for taxes,
10    insurance  and  other related reserves, and reimbursement for
11    lender advances.
12        (n)  "Commissioner" shall mean the Commissioner of  Banks
13    and  Real  Estate or a person authorized by the Commissioner,
14    the Office of Banks and Real Estate Act, or this Act  to  act
15    in the Commissioner's stead.
16        (o)  "Loan   brokering",   "brokering",   or   "brokerage
17    service" shall mean the act of helping to obtain from another
18    entity,  for  a  borrower, a loan secured by residential real
19    estate situated  in  Illinois  or  assisting  a  borrower  in
20    obtaining  a loan secured by residential real estate situated
21    in Illinois in return for consideration to be paid by  either
22    the  borrower  or  the  lender including, but not limited to,
23    contracting for the delivery of residential mortgage loans to
24    a third party lender and soliciting, processing, placing,  or
25    negotiating residential mortgage loans.
26        (p)  "Loan  broker"  or  "broker"  shall  mean  a person,
27    partnership, association, corporation, or  limited  liability
28    company,    other    than    those   persons,   partnerships,
29    associations, corporations, or  limited  liability  companies
30    exempted  from  licensing pursuant to Section 1-4, subsection
31    (d), of this Act, who performs the  activities  described  in
32    subsections (c) and (o) of this Section.
33        (q)  "Servicing"  shall mean the collection or remittance
34    for or the right or obligation to collect or  remit  for  any
 
                            -6-      LRB093 09887 JLS 10136 b
 1    lender,  noteowner,  noteholder,  or  for  a  licensee's  own
 2    account,  of  payments, interests, principal, and trust items
 3    such as hazard insurance and taxes on a residential  mortgage
 4    loan in accordance with the terms of the residential mortgage
 5    loan;  and  includes loan payment follow-up, delinquency loan
 6    follow-up,  loan  analysis  and  any  notifications  to   the
 7    borrower  that  are  necessary to enable the borrower to keep
 8    the loan current and in good standing.
 9        (r)  "Full service office" shall mean office and staff in
10    Illinois   reasonably   adequate   to   handle    efficiently
11    communications,  questions, and other matters relating to any
12    application for, or an  existing  home  mortgage  secured  by
13    residential  real estate situated in Illinois with respect to
14    which  the  licensee  is  brokering,   funding   originating,
15    purchasing,  or  servicing.   The management and operation of
16    each full service office  must  include  observance  of  good
17    business  practices such as adequate, organized, and accurate
18    books and records; ample  phone  lines,  hours  of  business,
19    staff training and supervision, and provision for a mechanism
20    to resolve consumer inquiries, complaints, and problems.  The
21    Commissioner  shall  issue  regulations  with regard to these
22    requirements and shall include an  evaluation  of  compliance
23    with  this Section in his or her periodic examination of each
24    licensee.
25        (s)  "Purchasing" shall mean the purchase of conventional
26    or government-insured mortgage loans secured  by  residential
27    real  estate  situated  in Illinois from either the lender or
28    from the secondary market.
29        (t)  "Borrower" shall mean the person or persons who seek
30    the services of a loan broker, originator, or lender.
31        (u)  "Originating" shall mean the issuing of  commitments
32    for and funding of residential mortgage loans.
33        (v)  "Loan  brokerage  agreement"  shall  mean  a written
34    agreement in which a broker  or  loan  broker  agrees  to  do
 
                            -7-      LRB093 09887 JLS 10136 b
 1    either of the following:
 2             (1)  obtain  a  residential  mortgage  loan  for the
 3        borrower  or  assist  the   borrower   in   obtaining   a
 4        residential mortgage loan; or
 5             (2)  consider  making a residential mortgage loan to
 6        the borrower.
 7        (w)  "Advertisement"   shall   mean   the   attempt    by
 8    publication,   dissemination,   or   circulation  to  induce,
 9    directly  or  indirectly,  any  person  to   enter   into   a
10    residential  mortgage  loan agreement or residential mortgage
11    loan brokerage agreement relative to a  mortgage  secured  by
12    residential real estate situated in Illinois.
13        (x)  "Residential   Mortgage   Board"   shall   mean  the
14    Residential Mortgage Board created in  Section  1-5  of  this
15    Act.
16        (y)  "Government-insured  mortgage  loan"  shall mean any
17    mortgage loan made on the security of residential real estate
18    insured by the Department of Housing and Urban Development or
19    Farmers  Home  Loan  Administration,  or  guaranteed  by  the
20    Veterans Administration.
21        (z)  "Annual audit" shall mean a certified audit  of  the
22    licensee's  books and records and systems of internal control
23    performed by a certified public accountant in accordance with
24    generally  accepted  accounting  principles   and   generally
25    accepted auditing standards.
26        (aa)  "Financial  institution"  shall  mean a savings and
27    loan association, savings  bank,  credit  union,  or  a  bank
28    organized  under  the  laws of Illinois or a savings and loan
29    association, savings bank, credit union or a  bank  organized
30    under  the  laws  of  the  United States and headquartered in
31    Illinois.
32        (bb)  "Escrow agent" shall mean a third party, individual
33    or entity charged with the fiduciary obligation  for  holding
34    escrow  funds  on  a  residential mortgage loan pending final
 
                            -8-      LRB093 09887 JLS 10136 b
 1    payout of those funds in accordance with  the  terms  of  the
 2    residential mortgage loan.
 3        (cc)  "Net worth" shall have the meaning ascribed thereto
 4    in Section 3-5 of this Act.
 5        (dd)  "Affiliate" shall mean:
 6             (1)  any   entity   that  directly  controls  or  is
 7        controlled by the licensee and any other company that  is
 8        directly  affecting activities regulated by this Act that
 9        is controlled by the company that controls the licensee;
10             (2)  any entity:
11                  (A)  that   is    controlled,    directly    or
12             indirectly,  by  a trust or otherwise, by or for the
13             benefit  of   shareholders   who   beneficially   or
14             otherwise  control, directly or indirectly, by trust
15             or otherwise,  the  licensee  or  any  company  that
16             controls the licensee; or
17                  (B)  a majority of the directors or trustees of
18             which  constitute  a majority of the persons holding
19             any such office with the  licensee  or  any  company
20             that controls the licensee;
21             (3)  any company, including a real estate investment
22        trust,  that  is  sponsored  and advised on a contractual
23        basis by the licensee or any subsidiary or  affiliate  of
24        the licensee.
25        The  Commissioner  may  define by rule and regulation any
26    terms  used  in  this  Act  for  the  efficient   and   clear
27    administration of this Act.
28        (ee)  "First   tier   subsidiary"  shall  be  defined  by
29    regulation incorporating the comparable definitions  used  by
30    the  Office  of  the  Comptroller  of  the  Currency  and the
31    Illinois Commissioner of Banks and Real Estate.
32        (ff)  "Gross  delinquency  rate"   means   the   quotient
33    determined  by  dividing  (1)  the  sum  of (i) the number of
34    government-insured  residential  mortgage  loans  funded   or
 
                            -9-      LRB093 09887 JLS 10136 b
 1    purchased  by  a licensee in the preceding calendar year that
 2    are  delinquent  and  (ii)   the   number   of   conventional
 3    residential   mortgage  loans  funded  or  purchased  by  the
 4    licensee in the preceding calendar year that  are  delinquent
 5    by  (2)  the  sum  of  (i)  the  number of government-insured
 6    residential  mortgage  loans  funded  or  purchased  by   the
 7    licensee  in  the preceding calendar year and (ii) the number
 8    of  conventional  residential  mortgage   loans   funded   or
 9    purchased by the licensee in the preceding calendar year.
10        (gg)  "Delinquency  rate  factor" means the factor set by
11    rule of the Commissioner that is multiplied  by  the  average
12    gross  delinquency rate of licensees, determined annually for
13    the immediately preceding calendar year, for the  purpose  of
14    determining   which   licensees  shall  be  examined  by  the
15    Commissioner pursuant to subsection (b)  of  Section  4-8  of
16    this Act.
17    (Source: P.A. 90-772, eff. 1-1-99; 91-245, eff. 12-31-99.)

18        (205 ILCS 635/1-5) (from Ch. 17, par. 2321-5)
19        Sec. 1-5.  Residential Mortgage Board.
20        (a)  Board  composition,  compensation.  There is created
21    the Residential  Mortgage  Board  composed  of  7  5  members
22    appointed  by the Commissioner of Banks and Real Estate.  The
23    majority of persons on the  Board  shall  have  no  financial
24    interest  in any residential mortgage business and one member
25    shall be a  representative  of  the  Mortgage  Banking  Trade
26    Association,  and one member shall be a representative of the
27    Mortgage Broker Trade Association,  one  member  shall  be  a
28    representative  of  the  National  Training  and  Information
29    Center  and  one  member  shall  be  a  representative of the
30    Woodstock Institute.  Members of the  Board  serving  on  the
31    effective  date of this amendatory Act of 1996 shall continue
32    to serve their unexpired terms as members of the  Residential
33    Mortgage  Board.  Thereafter, on or before January 15 of each
 
                            -10-     LRB093 09887 JLS 10136 b
 1    year, the  Commissioner  shall  appoint  one  or  more  board
 2    members,  as  shall  be  necessary  to  maintain a 7 5 member
 3    Board, whose terms shall be for 3 years commencing February 1
 4    of the year in which they are respectively appointed.
 5        If a vacancy occurs on the  Residential  Mortgage  Board,
 6    the  Commissioner  shall  within 60 days appoint a new member
 7    who shall hold office for the remainder of the vacated term.
 8        The Board shall meet a minimum of 4 times  each  calendar
 9    year  and  at  the  call  of  the  chairman, who along with a
10    Secretary, shall be selected by  the  Board  from  among  its
11    members.
12        Members  of  the Board shall be entitled to receive a per
13    diem allowance of $25 for each day or part of a day spent  on
14    Board  work  and shall be entitled to their expenses actually
15    and necessarily incurred in the performance of their  duties.
16    The  members  of  the  Board  serve  at  the  pleasure of the
17    Commissioner.
18        (b)  Duties of  Board.  The  Residential  Mortgage  Board
19    shall assist the Commissioner by:
20             (1)  submitting  recommendations to the Commissioner
21        for the efficient administration of this Act; and
22             (2)  submitting recommendations to the  Commissioner
23        for  establishing  guidelines for professional conduct of
24        licensees under this  Act,  for  the  conduct  of  formal
25        disciplinary  proceedings brought under this Act, and for
26        establishing guidelines for qualifications of  applicants
27        under this Act;
28             (3)  participating in hearings conducted pursuant to
29        Section 4-8.3 of this Act; and
30             (4)  (2)  performing  other duties as are prescribed
31        by the Commissioner.
32        (c)  Notice of proposed rulemaking shall  be  transmitted
33    to  the Board, and the Commissioner shall review the response
34    of the Board and any recommendations made in their  response.
 
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 1    The Commissioner, at any time, may seek the expert advice and
 2    knowledge  of  the  Board  on  any  matter  relating  to  the
 3    administration or enforcement of this Act.
 4        (d)  (c)  Conflict of interest declarations.  Each member
 5    of the Residential Mortgage Board  shall  file  annually,  no
 6    later  than  February 1, with the Commissioner a statement of
 7    his  or  her   current   business   transactions   or   other
 8    affiliations   with   any  licensee  under  this  Act.    The
 9    Commissioner may adopt rules to avoid conflicts  of  interest
10    on  the  part of members of the Residential Mortgage Board in
11    connection with their position on the Board.
12    (Source: P.A. 89-355, eff. 8-17-95; 89-508, eff. 7-3-96.)

13        (205 ILCS 635/4-8) (from Ch. 17, par. 2324-8)
14        Sec. 4-8.  Default rate; examination.
15        (a)  The  Commissioner  shall  obtain   from   the   U.S.
16    Department  of Housing and Urban Development on a semi-annual
17    basis that Department's default claim rates for  endorsements
18    issued by that Department.
19        (b)  The  Commissioner  shall  conduct  an examination of
20    each licensee having a default rate equal to or greater  than
21    5%.
22        This subsection shall not be construed as a limitation of
23    the Commissioner's examination authority under Section 4-2 of
24    this   Act   or  as  otherwise  provided  in  this  Act.  The
25    Commissioner may require a licensee to provide  loan  default
26    data  as  the  Commissioner  deems  necessary  for the proper
27    enforcement of the Act.
28        (c)  The purpose of the examination under subsection  (b)
29    shall  be  to  determine  whether  the  default  rate  of the
30    licensee has resulted from practices which deviate from sound
31    and accepted mortgage underwriting practices,  including  but
32    not  limited  to  credit  fraud, appraisal fraud and property
33    inspection  fraud.    For  the  purpose  of  conducting  this
 
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 1    examination, the Commissioner may accept  materials  prepared
 2    for  the U.S. Department of Housing and Urban Development. At
 3    the conclusion of the  examination,  the  Commissioner  shall
 4    provide make his or her findings available to the Residential
 5    Mortgage Board.
 6        (d)  The Commissioner, at his or her discretion, may hold
 7    public  hearings,  or  at  the  direction  of the Residential
 8    Mortgage Board, shall hold public  hearings.  Such  testimony
 9    shall  be  by  a  homeowner  or mortgagor or his agent, whose
10    residential interest is affected by  the  activities  of  the
11    residential  mortgage  licensee  subject  to such hearing. At
12    such public hearing, a witness may present testimony  on  his
13    or  her  behalf  concerning  only  his  or  her home, or home
14    mortgage or a witness may authorize a third party  to  appear
15    on  his  or her behalf.  The testimony shall be restricted to
16    information and comments related to a specific  residence  or
17    specific residential mortgage application or applications for
18    a  residential mortgage or residential loan transaction.  The
19    testimony must be preceded by either a letter of complaint or
20    a  completed  consumer  complaint  form  prescribed  by   the
21    Commissioner.
22        (e)  The  Commissioner  shall,  at  the conclusion of the
23    public hearings, release his or her findings and  shall  also
24    make  public  any  action taken with respect to the licensee.
25    The Commissioner shall also give full  consideration  to  the
26    findings  of  this examination whenever reapplication is made
27    by the licensee for a new license under this Act.
28        (f)  A licensee that is examined pursuant  to  subsection
29    (b)  shall  submit  to the Commissioner a plan which shall be
30    designed to reduce that licensee's default rate to  a  figure
31    that  is  less than 5%.  The plan shall be implemented by the
32    licensee as approved by the Commissioner.  A licensee that is
33    examined pursuant to subsection (b) shall report monthly, for
34    a one year period, one, 2, and 3 month defaults.
 
                            -13-     LRB093 09887 JLS 10136 b
 1        (g)  Whenever the Commissioner finds  that  a  licensee's
 2    default  rate on insured mortgages is unusually high within a
 3    particular geographic area, he  or  she  shall  require  that
 4    licensee  to  submit  such  information  as  is  necessary to
 5    determine whether that licensee's practices have  constituted
 6    credit  fraud,  appraisal fraud or property inspection fraud.
 7    The Commissioner shall promulgate such rules as are necessary
 8    to determine whether any licensee's default rate is unusually
 9    high within a particular area.
10    (Source: P.A.  89-355,  eff.  1-1-96;  89-626,  eff.  8-9-96;
11    90-301, eff. 8-1-97.)

12        (205 ILCS 635/4-8.1 new)
13        Sec.  4-8.1.  Investigations; notice of hearing. Upon the
14    motion of either the Commissioner or the Residential Mortgage
15    Board or upon the verified complaint in writing of any person
16    setting  forth  facts  which,  if  proven,  would  constitute
17    grounds for refusal, suspension,  or  revocation  of  license
18    under  this  Act,  the  Commissioner  shall  investigate  the
19    actions of any person, hereinafter called the "licensee", who
20    holds or represents that he or she holds a license under this
21    Act.   The  Commissioner  shall, before suspending, revoking,
22    placing  on  probationary  status,  or   taking   any   other
23    disciplinary  action as the Commissioner may deem proper with
24    regard to any registration, at least 30  days  prior  to  the
25    date  set  for the hearing, notify the licensee in writing of
26    any charges made and of the time and place for a  hearing  on
27    the  charges. The Commissioner shall also direct the licensee
28    to file a written answer to the charges under oath within  20
29    days  after  the  service of the notice upon the licensee and
30    inform the licensee that if  he  or  she  fails  to  file  an
31    answer,  his  or  her  certificate  of  registration  may  be
32    suspended,  revoked, or placed on probationary status or that
33    other disciplinary action may be taken with  regard  thereto,
 
                            -14-     LRB093 09887 JLS 10136 b
 1    as  the  Commissioner may deem proper. The written notice and
 2    any notice in  the  proceeding  may  be  served  by  delivery
 3    personally to the licensee or by registered or certified mail
 4    to  the  address specified by the licensee in his or her last
 5    notification to  the  Commissioner.  The  Commissioner  shall
 6    preserve a record of all proceedings at the formal hearing of
 7    any   case   involving  the  refusal  to  issue  or  renew  a
 8    registration or discipline  of  a  licensee.  The  notice  of
 9    hearing,  the complaint, all other documents in the nature of
10    pleadings and written motions filed in the  proceedings,  the
11    transcript  of  testimony,  the  report of the Board, and the
12    orders of  the  Commissioner  shall  be  the  record  of  the
13    proceedings.

14        (205 ILCS 635/4-8.2 new)
15        Sec. 4-8.2.  Disciplinary actions.
16        (a)  If a licensee, after receiving notice, fails to file
17    an  answer,  his or her license may, in the discretion of the
18    Commissioner, having first received the recommendation of the
19    Board, be  suspended,  revoked,  or  placed  on  probationary
20    status,  or  the  Commissioner may take whatever disciplinary
21    action he or she may deem proper, including the imposition of
22    a fine, without  a  hearing,  if  the  act  or  acts  charged
23    constitute sufficient grounds for such action under this Act.
24        (b)  The   Commissioner   may   temporarily  suspend  the
25    registration of a licensee without a hearing, simultaneous to
26    the institution of proceedings for a hearing under this  Act,
27    if  the  Commissioner  finds  that evidence in his possession
28    indicates that the person's continuation of use of the  title
29    would  constitute  an  immediate danger to the public. In the
30    event  that  the  Commissioner   temporarily   suspends   the
31    registration  of  a  licensee  without  a  hearing, a hearing
32    pursuant to Section 4-8.3 must be held within 15  days  after
33    the  suspension  has  occurred  and must be concluded without
 
                            -15-     LRB093 09887 JLS 10136 b
 1    appreciable delay.

 2        (205 ILCS 635/4-8.3 new)
 3        Sec. 4-8.3.  Hearings. At the time and place fixed in the
 4    notice of hearing, the Commissioner shall proceed to hear the
 5    charges before the Board,  and  both  the  licensee  and  the
 6    complainant shall be accorded ample opportunity to present in
 7    person,  or by counsel, such statements, testimony, evidence,
 8    and arguments as may be pertinent to the charges or to  their
 9    defense.  The Commissioner may continue the hearing from time
10    to  time.  If  the Board is not sitting at the time and place
11    fixed in the notice or at the time and  place  to  which  the
12    hearing  has  been continued, the Commissioner shall continue
13    the  hearing  for  a  period  not  to  exceed  30  days.  The
14    Commissioner shall have power to subpoena  and  bring  before
15    him  or her any licensee under this Act and to take testimony
16    either orally or by deposition, or both, with the  same  fees
17    and  mileage  and  in the same manner as prescribed for civil
18    actions in this State. The Commissioner shall have  power  to
19    administer  oaths at any hearing at which the Commissioner is
20    authorized by law to conduct.

21        (205 ILCS 635/4-8.4 new)
22        Sec.  4-8.4.  Attendance  of  witnesses;  production   of
23    documents.  Any  circuit  court,  upon the application of the
24    Commissioner, may order the attendance of witnesses  and  the
25    production  of  relevant  books  and  papers  in  any hearing
26    relative to the application for a suspension  of,  revocation
27    of,  or refusal to renew a registration of, or the discipline
28    of a licensee. The court may compel obedience to its order by
29    proceedings for contempt.

30        (205 ILCS 635/4-8.5 new)
31        Sec.  4-8.5.  Recommendations  for  disciplinary  action;
 
                            -16-     LRB093 09887 JLS 10136 b
 1    action by Commissioner. The Board may advise the Commissioner
 2    that probation be granted or that other disciplinary  action,
 3    including  the limitation of the use of license, be taken, as
 4    it deems proper. If disciplinary action other than suspension
 5    or revocation is taken, the Board may advise the Commissioner
 6    to impose reasonable limitations and  requirements  upon  the
 7    licensee to insure compliance with the terms of the probation
 8    or   other   disciplinary   action  in  such  manner  as  the
 9    Commissioner may require. The  Board  shall  present  to  the
10    Commissioner   a   written   report   of   its  findings  and
11    recommendations. A copy of the report shall  be  served  upon
12    the licensee, either personally or by registered or certified
13    mail.  Within  20  days  after such service, the licensee may
14    present to the Commissioner  his  motion  in  writing  for  a
15    rehearing,  specifying  the particular grounds for rehearing.
16    If the licensee orders and  pays  for  a  transcript  of  the
17    record,  the  time elapsing until the transcript is ready for
18    delivery to him shall not be counted as part of such 20 days.
19    At the expiration of the time allowed for filing a motion for
20    rehearing, the Commissioner may take the  action  recommended
21    by  the  Board.  Upon  suspension,  revocation,  placement on
22    probationary status, or the taking of any other  disciplinary
23    action,  including  the  limiting  of the use of the license,
24    deemed  proper  by  the  Commissioner,  the  licensee   shall
25    surrender  his  or her license to the Commissioner if ordered
26    to do so by the Commissioner.  Upon a failure or  refusal  to
27    do  so,  the  Commissioner  may  seize  the  license.  In all
28    instances in which the Board has rendered a recommendation to
29    the Commissioner with respect to  a  particular  person,  the
30    Commissioner  shall,  to  the extent that he or she disagrees
31    with or takes action contrary to the  recommendation  of  the
32    Board,  file  with  the Board his specific written reasons of
33    disagreement. The reasons shall be filed within 30 days after
34    the Commissioner has taken the contrary position. Each  order
 
                            -17-     LRB093 09887 JLS 10136 b
 1    of revocation, suspension, or other disciplinary action shall
 2    contain  a  brief  and  concise  statement  of  the ground or
 3    grounds upon which the Commissioner's  action  is  based,  as
 4    well  as  the  specific  terms and conditions of that action.
 5    Whenever  the  Commissioner  is  satisfied  that  substantial
 6    justice has not been done either in an examination or in  the
 7    revocation,  suspension,  or  refusal  to  issue a license or
 8    other disciplinary  action,  the  Commissioner  may  order  a
 9    re-examination or rehearing.

10        (205 ILCS 635/4-8.6 new)
11        Sec.  4-8.6.  Hearing  officer.  The Commissioner has the
12    authority to appoint any attorney duly licensed  to  practice
13    law  in the State of Illinois to serve as the hearing officer
14    for any disciplinary  action  under  this  Act.  The  hearing
15    officer shall have full authority to conduct the hearing. The
16    hearing   officer  shall  report  his  or  her  findings  and
17    recommendations to the the Commissioner and  the  Board.  The
18    Board shall have 60 days from receipt of the report to review
19    the report of the hearing officer and present its findings of
20    fact,   conclusions   of  law,  and  recommendations  to  the
21    Commissioner. If the Board fails to present its report within
22    the 60 day period, the Commissioner may issue an order  based
23    on  the  report  of  the hearing officer. If the Commissioner
24    disagrees in any regard with the Board's report,  he  or  she
25    may issue an order in contravention of the Board's report.

26        (205 ILCS 635/4-8.7 new)
27        Sec.  4-8.7.  Restoration.  At any time after suspension,
28    revocation, placement on probationary status, or  the  taking
29    of  any other disciplinary action with regard to any license,
30    the Commissioner may restore the license, or take  any  other
31    action to reinstate the license without examination, for good
32    cause shown in the opinion of the Commissioner.
 
                            -18-     LRB093 09887 JLS 10136 b
 1        (205 ILCS 635/4-8.8 new)
 2        Sec.   4-8.8.  Administrative   Review   Law.  All  final
 3    administrative decisions of the Commissioner are  subject  to
 4    judicial  review  under the Administrative Review Law and its
 5    rules. The term "administrative decision" is  defined  as  in
 6    Section 3-101 of the Code of Civil Procedure. Proceedings for
 7    judicial  review  shall  be commenced in the circuit court of
 8    the county in which the party applying  for  review  resides,
 9    but  if  the party is not a resident of this State, the venue
10    shall be in Sangamon County or Cook County. The  Commissioner
11    shall  not  be required to certify any record to the court or
12    file any answer in court or otherwise appear in any court  in
13    a  judicial  review  proceeding, unless there is filed in the
14    court with the complaint  a  receipt  from  the  Commissioner
15    acknowledging   payment   of  the  costs  of  furnishing  and
16    certifying the record. Exhibits shall  be  certified  without
17    cost.  Failure on the part of the plaintiff to file a receipt
18    in court shall be grounds for dismissal of the action. During
19    the pendency and hearing of any and all judicial  proceedings
20    incident to a disciplinary action, any sanctions imposed upon
21    the  licensee  by the Commissioner shall remain in full force
22    and effect.

23        (205 ILCS 635/4-8.9 new)
24        Sec. 4-8.9.  Revocation orders. An order  of  revocation,
25    suspension, placement on probationary status, or other formal
26    disciplinary action as the Commissioner may deem proper, or a
27    certified copy thereof, over the seal of the Commissioner and
28    purporting  to  be signed by the Commissioner, is prima facie
29    proof that:
30             (1)  the signature is the genuine signature  of  the
31        Commissioner;
32             (2)  the   Commissioner   is   duly   appointed  and
33        qualified; and
 
                            -19-     LRB093 09887 JLS 10136 b
 1             (3)  the  Board  and   the   members   thereof   are
 2        qualified.

 3        (205 ILCS 635/4-8.10 new)
 4        Sec.  4-8.10.  Confidential  information;  disclosure. In
 5    hearings conducted under this Act, information presented into
 6    evidence that was acquired by the licensee when  serving  any
 7    individual   in   connection  with  a  residential  mortgage,
 8    including all financial information of the individual,  shall
 9    be  deemed  strictly  confidential  and  shall  only  be made
10    available either as part of the record of a hearing hereunder
11    or otherwise:  (1)  when  the  record  is  required,  in  its
12    entirety,  for  purposes  of judicial review; or (2) upon the
13    express written consent of the individual served, or  in  the
14    case of his or her death or disability, the consent of his or
15    her personal representative.

16        (205 ILCS 635/4-8.11 new)
17        Sec.  4-8.11.  Reports  of violation. Any person licensed
18    under this Act, or  any  other  person,  may  report  to  the
19    Commissioner  any  information  that  person  may  have  that
20    appears  to  show that a licensee under this Act is or may be
21    in violation of this Act.

22        Section 99.  Effective date. This Act takes  effect  upon
23    becoming law.