93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
HB5197


 
Introduced 02/05/04, by Michael K. Smith
 
SYNOPSIS AS INTRODUCED:
 		
















205 ILCS 5/5a
  from Ch. 17, par. 312


205 ILCS 105/1-6a
  from Ch. 17, par. 3301-6a







    Amends the Illinois Banking Act and the Illinois Savings and Loan Act of 1985. Provides for a civil penalty of $50,000 for violations of law in connection with reverse mortgage loans made to elderly persons. Requires the penalty to be paid into the Community Senior Services and Resources Fund. Effective immediately.
















LRB093 15959 SAS 41582 b

















FISCAL NOTE ACT MAY APPLY
















 


 


A BILL FOR









 











HB5197

LRB093 15959 SAS 41582 b






1
    AN ACT concerning reverse mortgage loans.

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


 
4
    Section 5. The Illinois Banking Act is amended  by changing 
5
Section 5a as follows:
 



6
    (205 ILCS 5/5a)  (from Ch. 17, par. 312)



7
    Sec. 5a. Reverse mortgage loans. Notwithstanding any other 
8
provision of
this Act, a bank may engage in making "reverse 
9
mortgage" loans.

10
    For purposes of this Section, a "reverse mortgage" loan 
11
shall be a loan
extended on the basis of existing equity in 
12
homestead property.  A bank,
in making a "reverse mortgage" 
13
loan, may add deferred interest to principal
or otherwise 
14
provide for the charging of interest or premium on the deferred

15
interest.

16
    The loans shall be repaid upon sale of the property or upon 
17
the death
of the owner or, if the property is in joint tenancy, 
18
upon the death of
the last surviving joint tenant who had an 
19
interest in the property
at the time the loan was initiated.

20
    "Homestead" property, for purposes of this Section, means 
21
the domicile
and contiguous real estate owned and occupied by 
22
the mortgagor.

23
    With respect to the advertising, solicitation, sale, 
24
billings, or collections relating to reverse mortgages when the 
25
consumer is an elderly person, an additional civil penalty of 
26
$50,000 may be imposed for each violation. The civil penalty 
27
must be deposited in the Community Senior Services and 
28
Resources Fund. For purposes of this Section, "elderly person" 
29
means a person 60 years of age or older.

30
    The Commissioner of Banks and Real Estate shall
prescribe 
31
rules governing this Section and
Section 1-6a of the Illinois 
32
Savings and Loan Act of 1985.

 


 






HB5197
- 2 -
LRB093 15959 SAS 41582 b




1
(Source: P.A. 88-643, eff. 1-1-95; 89-508, eff. 7-3-96.)

 
2
    Section 10. The Illinois Savings and Loan Act of 1985 is 
3
amended  by changing Section 1-6a as follows:
 



4
    (205 ILCS 105/1-6a)  (from Ch. 17, par. 3301-6a)



5
    Sec. 1-6a. Reverse mortgage loans. Notwithstanding any 
6
other provision
of this Act, an association may engage in 
7
making "reverse mortgage" loans to
persons for the purpose of 
8
making home improvements or repairs, paying
insurance 
9
premiums, or paying real estate taxes on the homestead 
10
properties of
those persons.

11
    For purposes of this Section, a "reverse mortgage" loan 
12
shall be a loan
extended on the basis of existing equity in 
13
homestead property.  An
association, in making a "reverse 
14
mortgage" loan, may add deferred interest to
principal or 
15
otherwise provide for the charging of interest or premium on 
16
the
deferred interest. 

17
    The loans shall be repaid upon sale of the property or upon 
18
the death
of the owner or, if the property is in joint tenancy, 
19
upon the death of
the last surviving joint tenant who had an 
20
interest in the property
at the time the loan was initiated.

21
    "Homestead" property, for purposes of this Section, means 
22
the domicile
and contiguous real estate owned and occupied by 
23
the mortgagor.

24
    With respect to the advertising, solicitation, sale, 
25
billings, or collections relating to reverse mortgages when the 
26
consumer is an elderly person, an additional civil penalty of 
27
$50,000 may be imposed for each violation. The civil penalty 
28
must be deposited in the Community Senior Services and 
29
Resources Fund. For purposes of this Section, "elderly person" 
30
means a person 60 years of age or older.

31
    The Commissioner of Banks and Real Estate shall
prescribe 
32
rules governing this Section and
Section 5a of the Illinois 
33
Banking Act.

34
(Source: P.A. 89-508, eff. 7-3-96.)

 

 


 






HB5197
- 3 -
LRB093 15959 SAS 41582 b




1
    Section 99. Effective date. This Act takes effect upon 
2
becoming law.