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1 | AN ACT concerning reverse mortgage loans.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Banking Act is amended by changing | ||||||||||||||||||||||||||
5 | Section 5a as follows:
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6 | (205 ILCS 5/5a) (from Ch. 17, par. 312)
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7 | Sec. 5a. Reverse mortgage loans. Notwithstanding any other | ||||||||||||||||||||||||||
8 | provision of
this Act, a bank may engage in making "reverse | ||||||||||||||||||||||||||
9 | mortgage" loans.
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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
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15 | interest.
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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.
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20 | "Homestead" property, for purposes of this Section, means | ||||||||||||||||||||||||||
21 | the domicile
and contiguous real estate owned and occupied by | ||||||||||||||||||||||||||
22 | the mortgagor.
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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.
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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.
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1 | (Source: P.A. 88-643, eff. 1-1-95; 89-508, eff. 7-3-96.)
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2 | Section 10. The Illinois Savings and Loan Act of 1985 is | ||||||
3 | amended by changing Section 1-6a as follows:
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4 | (205 ILCS 105/1-6a) (from Ch. 17, par. 3301-6a)
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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.
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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.
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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.
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21 | "Homestead" property, for purposes of this Section, means | ||||||
22 | the domicile
and contiguous real estate owned and occupied by | ||||||
23 | the mortgagor.
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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.
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31 | The Commissioner of Banks and Real Estate shall
prescribe | ||||||
32 | rules governing this Section and
Section 5a of the Illinois | ||||||
33 | Banking Act.
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34 | (Source: P.A. 89-508, eff. 7-3-96.)
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1 | Section 99. Effective date. This Act takes effect upon | ||||||
2 | becoming law.
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