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Sen. William R. Haine
Filed: 3/24/2004
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| AMENDMENT TO SENATE BILL 2908
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| AMENDMENT NO. ______. Amend Senate Bill 2908 by replacing |
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| everything after the enacting clause with the following:
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| by replacing everything after the enacting clause with the |
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| following:
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| "Section 5. The Residential Mortgage License Act of 1987 is |
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| amended by changing Sections 1-3, 1-4, 1-5, 2-2, 2-4, 2-6, 3-1, |
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| 3-2, 3-4, 3-5, 4-1, 4-2, 4-5, and 6-2 and by adding Section |
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| 4-9.1 as follows:
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| (205 ILCS 635/1-3) (from Ch. 17, par. 2321-3)
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| Sec. 1-3. Necessity for License; Scope of Act.
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| (a) No person, partnership, association, corporation or |
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| other entity
shall engage in the business of brokering, |
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| funding, originating, servicing
or purchasing of residential |
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| mortgage loans without first obtaining a
license from the |
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| Commissioner in accordance with the licensing procedure
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| provided in this Article I and such regulations as may be |
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| promulgated by
the Commissioner. The licensing provisions of |
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| this Section shall not apply
to any entity engaged solely in |
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| commercial mortgage lending or
to any person, partnership |
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| association, corporation or other entity
exempted pursuant to |
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| Section 1-4, subsection (d), of this Act or in accordance
with |
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| regulations promulgated by the Commissioner hereunder.
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| (b) No person, partnership, association, corporation, or |
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| other entity
except a licensee under this Act or an entity |
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| exempt from licensing
pursuant to Section 1-4, subsection (d), |
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| of this Act shall do any business
under any name or title, or |
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| circulate or use any advertising or make any
representation or |
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| give any information to any person, which indicates or
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| reasonably implies activity within the scope
of this Act.
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| (c) The Commissioner may, through the Attorney General, |
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| request the circuit
court of either Cook or Sangamon County to |
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| issue an injunction to restrain
any person from violating or |
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| continuing to violate any of the foregoing
provisions of this |
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| Section.
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| (d) When the Commissioner has reasonable cause to believe |
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| that any
entity which has not submitted an application for |
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| licensure is conducting
any of the activities described in |
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| subsection (a) hereof, the Commissioner
shall have the power to |
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| examine all books and records of the entity and any
additional |
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| documentation necessary in order to determine whether such
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| entity should become licensed under this Act.
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| (d-1) The Commissioner shall have the power to issue orders |
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| against any person, if the Commissioner has reasonable cause to |
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| believe that an unsafe, unsound, or unlawful practice has |
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| occurred, is occurring, or is about to occur, if any person has |
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| violated, is violating, or is about to violate any law, rule, |
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| or written agreement with the Commissioner, or for the purpose |
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| of administering the provisions of this Act and any rule |
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| promulgated in accordance with this Act.
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| (e) Any person, partnership, association, corporation or |
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| other entity
who violates any provision of this Section commits |
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| a business offense and
shall be fined an amount not to exceed |
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| $25,000
$5,000 .
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| (f) Each person, partnership, association, corporation or |
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| other entity
conducting activities regulated by this Act shall |
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| be issued one license.
Each office, place of business or |
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| location at which a residential mortgage
licensee conducts any |
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| part of his or her business must
be recorded with the |
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| Commissioner pursuant to Section 2-8 of this Act.
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| (g) Licensees under this Act shall solicit, broker, fund, |
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| originate,
service and purchase residential mortgage loans |
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| only in conformity with the
provisions of this Act and such |
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| rules and regulations as may be promulgated
by the |
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| Commissioner.
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| (h) This Act applies to all entities doing business in |
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| Illinois as
residential mortgage bankers, as defined by "An Act |
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| to provide for the
regulation of mortgage bankers", approved |
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| September 15, 1977, as amended,
regardless of whether licensed |
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| under that or any prior Act. Any existing
residential mortgage |
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| lender or residential mortgage broker in Illinois
whether or |
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| not previously licensed, must operate in accordance with this |
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| Act.
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| (i) This Act is a successor Act to and a continuance of the |
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| regulation
of residential mortgage bankers provided in, "An Act |
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| to provide for the
regulation of mortgage bankers", approved |
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| September 15, 1977, as amended.
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| Entities and persons subject to the predecessor Act shall |
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| be subject to
this Act from and after its effective date.
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| (Source: P.A. 86-137; 87-642.)
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| (205 ILCS 635/1-4) (from Ch. 17, par. 2321-4)
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| Sec. 1-4. Definitions.
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| (a) "Residential real property" or "residential real |
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| estate" shall mean
real property located in this State improved |
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| by a one-to-four family
dwelling used or occupied, wholly or |
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| partly, as the home or residence of
one or more persons and may |
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| refer, subject to regulations of the
Commissioner, to |
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| unimproved real property upon which those kinds dwellings
are |
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| to be constructed.
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| (b) "Making a residential mortgage loan" or "funding a |
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| residential mortgage
loan" shall mean for compensation or gain, |
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| either directly or indirectly,
advancing funds or making a |
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| commitment to advance funds to a loan applicant
for a |
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| residential mortgage loan.
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| (c) "Soliciting, processing, placing, or negotiating a |
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| residential
mortgage loan" shall mean for compensation or gain, |
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| either directly or
indirectly, accepting or offering to accept |
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| an application for a
residential mortgage loan, assisting or |
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| offering to assist in the
processing of an application for a |
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| residential mortgage loan on behalf of a
borrower, or |
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| negotiating or offering to negotiate the terms or conditions
of |
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| a residential mortgage loan with a lender on behalf of a |
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| borrower
including, but not limited to, the submission of |
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| credit packages for the
approval of lenders, the preparation of |
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| residential mortgage loan closing
documents, including a |
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| closing in the name of a broker.
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| (d) "Exempt person or entity" shall mean the following:
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| (1) (i) Any banking organization or foreign banking |
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| corporation
licensed by the Illinois Commissioner of Banks |
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| and Real Estate or the
United States Comptroller of the |
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| Currency to transact business in this
State; (ii) any |
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| national bank, federally chartered savings and loan
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| association, federal savings bank, federal credit union; |
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| (iii) any pension
trust, bank trust, or bank trust company; |
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| (iv) any bank, savings and loan
association, savings bank, |
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| or credit union organized under the laws of this
or any |
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| other state; (v) any Illinois Consumer Installment Loan Act |
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| licensee;
(vi) any insurance company authorized to |
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| transact business in this State;
(vii) any entity engaged |
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| solely in commercial mortgage lending; (viii) any
service |
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| corporation of a savings and loan association or savings |
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| bank organized
under the laws of this State or the service |
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| corporation of a federally
chartered savings and loan |
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| association or savings bank having
its principal place of |
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| business in this State, other than a service
corporation |
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| licensed or entitled to reciprocity under the Real Estate
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| License Act of 2000; or (ix) any first tier subsidiary of a
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| bank, the charter of which is issued under the Illinois |
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| Banking Act
by the Illinois Commissioner of Banks and Real |
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| Estate,
or the first tier subsidiary of a bank chartered by |
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| the United States
Comptroller of the Currency and that has |
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| its principal place of business
in this State, provided |
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| that the first tier subsidiary is regularly
examined by the |
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| Illinois Commissioner of Banks and Real Estate
or the |
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| Comptroller of the Currency, or a consumer compliance |
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| examination is
regularly conducted by the Federal Reserve |
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| Board.
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| (1.5) Any employee of a person or entity mentioned in
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| item (1) of this subsection.
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| (2) Any person or entity that does not originate
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| mortgage loans in the ordinary course of
business making or |
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| acquiring residential mortgage loans
with his or her or its |
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| own funds for his or her or its own investment
without |
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| intent to
make, acquire, or resell more than 10 residential |
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| mortgage loans in
any one calendar year.
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| (3) Any person employed by a licensee to assist in the |
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| performance of
the activities regulated by this Act who is |
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| compensated in any manner by
only one licensee.
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| (4) Any person licensed pursuant to the Real Estate
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| License Act of
2000, who engages only in the taking of |
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| applications and credit
and
appraisal information to |
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| forward to a licensee or an exempt entity under this
Act |
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| and who is compensated by either a licensee or an exempt |
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| entity under this
Act, but is not compensated by either the |
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| buyer (applicant) or the seller.
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| (5) Any individual, corporation, partnership, or other |
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| entity that
originates, services, or brokers residential |
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| mortgage loans, as these
activities are defined in this |
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| Act, and who or which receives no
compensation for those |
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| activities, subject to the Commissioner's
regulations with |
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| regard to the nature and amount of compensation.
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| (6) A person who prepares supporting documentation for |
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| a residential
mortgage loan application taken by a licensee |
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| and performs ministerial
functions pursuant to specific |
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| instructions of the licensee who neither
requires nor |
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| permits the preparer to exercise his or her discretion or
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| judgment; provided that this activity is engaged in |
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| pursuant to a binding,
written agreement between the |
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| licensee and the preparer that:
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| (A) holds the licensee fully accountable for the |
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| preparer's action; and
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| (B) otherwise meets the requirements of this |
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| Section and this Act, does
not undermine the purposes |
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| of this Act, and is approved by the
Commissioner.
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| (e) "Licensee" or "residential mortgage licensee" shall |
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| mean a person,
partnership, association, corporation, or any |
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| other entity who or which is
licensed pursuant to this Act to |
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| engage in the activities regulated by
this Act.
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| (f) "Mortgage loan" "residential mortgage loan" or "home
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| mortgage loan" shall mean a loan to or for the benefit of any
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| natural person made primarily for personal, family, or |
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| household use,
primarily secured by either a mortgage on |
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| residential real property or
certificates of stock or other |
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| evidence of ownership interests in and
proprietary leases from, |
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| corporations, partnerships, or limited
liability companies |
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| formed for the purpose
of cooperative ownership of residential |
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| real property, all located in Illinois.
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| (g) "Lender" shall mean any person, partnership, |
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| association,
corporation, or any other entity who either lends |
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| or invests money in
residential mortgage loans.
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| (h) "Ultimate equitable owner" shall mean a person who, |
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| directly
or indirectly, owns or controls an ownership interest |
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| in a corporation,
foreign corporation, alien business |
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| organization, trust, or any other form
of business organization |
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| regardless of whether the person owns or controls
the ownership |
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| interest through one or more persons or one or more proxies,
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| powers of attorney, nominees, corporations, associations, |
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| partnerships,
trusts, joint stock companies, or other entities |
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| or devices, or any
combination thereof.
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| (i) "Residential mortgage financing transaction" shall |
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| mean the negotiation,
acquisition, sale, or arrangement for or |
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| the offer to negotiate, acquire,
sell, or arrange for, a |
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| residential mortgage loan or residential mortgage
loan |
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| commitment.
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| (j) "Personal residence address" shall mean a street |
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| address and shall
not include a post office box number.
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| (k) "Residential mortgage loan commitment" shall mean a |
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| contract for
residential mortgage loan financing.
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| (l) "Party to a residential mortgage financing |
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| transaction" shall mean a
borrower, lender, or loan broker in a |
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| residential mortgage financing
transaction.
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| (m) "Payments" shall mean payment of all or any of the |
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| following:
principal, interest and escrow reserves for taxes, |
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| insurance and other related
reserves, and reimbursement for |
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| lender advances.
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| (n) "Commissioner" shall mean the Commissioner of Banks and |
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| Real Estate
or a person authorized by the Commissioner, the |
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| Office of Banks and Real Estate
Act, or this Act to act in the |
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| Commissioner's stead.
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| (o) "Loan brokering", "brokering", or "brokerage service" |
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| shall mean the act
of helping to obtain from another entity, |
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| for a borrower, a loan secured by
residential real estate |
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| situated in Illinois or assisting a borrower in
obtaining a |
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| loan secured by residential real estate situated in Illinois in
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| return for consideration to be paid by either the borrower or |
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| the lender
including, but not limited to, contracting for the |
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| delivery of residential
mortgage loans to a third party lender |
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| and soliciting, processing, placing,
or negotiating |
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| residential mortgage loans.
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| (p) "Loan broker" or "broker" shall mean a person, |
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| partnership,
association, corporation, or limited liability |
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| company, other than
those persons, partnerships,
associations, |
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| corporations, or limited liability companies exempted
from |
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| licensing pursuant to Section
1-4, subsection (d), of this Act, |
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| who performs the activities described
in subsections (c) and |
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| (o) of this Section.
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| (q) "Servicing" shall mean the collection or remittance for |
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| or the
right or obligation to collect or remit for any lender, |
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| noteowner,
noteholder, or for a licensee's own account, of |
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| payments, interests,
principal, and trust items such as hazard |
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| insurance and taxes on a
residential mortgage loan in |
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| accordance with the terms of the residential
mortgage loan; and |
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| includes loan payment follow-up, delinquency loan
follow-up, |
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| loan analysis and any notifications to the borrower that are
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| necessary to enable the borrower to keep the loan current and |
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| in good standing.
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| (r) "Full service office" shall mean office and staff in |
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| Illinois
reasonably adequate to handle efficiently |
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| communications, questions, and
other matters relating to any |
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| application for, or an existing home mortgage
secured by |
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| residential real estate situated in Illinois
with respect to |
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| which the licensee is brokering, funding originating,
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| purchasing, or servicing. The management and operation of each |
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| full service
office must include observance of good business |
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| practices such as adequate,
organized, and accurate books and |
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| records; ample phone lines, hours of
business, staff training |
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| and supervision, and provision for a mechanism to
resolve |
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| consumer inquiries, complaints, and problems. The Commissioner
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| shall issue regulations with regard to these requirements and |
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| shall include
an evaluation of compliance with this Section in |
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| his or her periodic
examination of each licensee.
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| (s) "Purchasing" shall mean the purchase of conventional or
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| government-insured mortgage loans secured by residential real |
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| estate
situated in Illinois from either the lender or from the |
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| secondary market.
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| (t) "Borrower" shall mean the person or persons who seek |
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| the services of
a loan broker, originator, or lender.
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| (u) "Originating" shall mean the issuing of commitments for |
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| and funding of
residential mortgage loans.
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| (v) "Loan brokerage agreement" shall mean a written |
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| agreement in which a
broker or loan broker agrees to do either |
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| of the following:
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| (1) obtain a residential mortgage loan for the borrower |
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| or assist the
borrower in obtaining a residential mortgage |
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| loan; or
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| (2) consider making a residential mortgage loan to the |
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| borrower.
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| (w) "Advertisement" shall mean the attempt by publication,
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| dissemination, or circulation to induce, directly or |
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| indirectly,
any person to enter into a residential mortgage |
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| loan agreement or
residential mortgage loan brokerage |
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| agreement relative to a
mortgage secured by residential real |
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| estate situated in Illinois.
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| (x) "Residential Mortgage Board" shall mean the |
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| Residential Mortgage
Board created in Section 1-5 of this Act.
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| (y) "Government-insured mortgage loan" shall mean any |
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| mortgage loan made
on the security of residential real estate |
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| insured by the Department of
Housing and Urban Development or |
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| Farmers Home Loan Administration, or
guaranteed by the Veterans |
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| Administration.
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| (z) "Annual audit" shall mean a certified audit of the |
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| licensee's books and
records and systems of internal control |
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| performed by a certified public
accountant in accordance with |
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| generally accepted accounting principles
and generally |
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| accepted auditing standards.
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| (aa) "Financial institution" shall mean a savings and loan
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| association, savings bank, credit union, or a bank organized |
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| under the
laws of Illinois or a savings and loan association, |
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| savings bank,
credit union or a bank organized under the laws |
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| of the United States and
headquartered in Illinois.
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| (bb) "Escrow agent" shall mean a third party, individual or |
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| entity
charged with the fiduciary obligation for holding escrow |
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| funds on a
residential mortgage loan pending final payout of |
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| those funds
in accordance with the terms of the residential |
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| mortgage loan.
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| (cc) "Net worth" shall have the meaning ascribed thereto in |
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| Section 3-5
of this Act.
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| (dd) "Affiliate" shall mean:
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| (1) any entity that directly controls or is controlled |
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| by the licensee
and any other company that is directly |
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| affecting activities regulated by
this Act that is |
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| controlled by the company that controls the licensee;
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| (2) any entity:
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| (A) that is controlled, directly or indirectly, by |
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| a trust or otherwise,
by or for the benefit of |
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| shareholders who beneficially or otherwise
control, |
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| directly or indirectly, by trust or otherwise, the |
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| licensee or any
company that controls the licensee; or
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| (B) a majority of the directors or trustees of |
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| which constitute a
majority of the persons holding any |
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| such office with the licensee or any
company that |
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| controls the licensee;
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| (3) any company, including a real estate investment |
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| trust, that is
sponsored and advised on a contractual basis |
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| by the licensee or any
subsidiary or affiliate of the |
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| licensee.
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| The Commissioner may define by rule and regulation any |
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| terms used
in this Act for the efficient and clear |
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| administration of this Act.
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| (ee) "First tier subsidiary" shall be defined by regulation
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| incorporating the comparable definitions used by the Office of |
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| the
Comptroller of the Currency and the Illinois Commissioner |
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| of Banks
and Real Estate.
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| (ff) "Gross delinquency rate" means the quotient |
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| determined by dividing
(1) the sum of (i) the number of |
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| government-insured residential mortgage loans
funded or |
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| purchased by a licensee in the preceding calendar year that are
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| delinquent and (ii) the number of conventional residential |
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| mortgage loans
funded or purchased by the licensee in the |
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| preceding calendar year that are
delinquent by (2) the sum of |
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| (i) the number of government-insured residential
mortgage |
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| loans funded or purchased by the licensee in the preceding |
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| calendar
year and (ii) the number of conventional residential |
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| mortgage loans funded or
purchased by the licensee in the |
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| preceding calendar year.
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| (gg) "Delinquency rate factor" means the factor set by rule |
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| of the
Commissioner that is multiplied by the average gross |
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| delinquency rate of
licensees, determined annually for the |
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| immediately preceding calendar year, for
the purpose of |
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| determining which licensees shall be examined by the
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| Commissioner pursuant to subsection (b) of Section 4-8 of this |
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| Act.
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| (hh) "Loan originator" means any natural person who, for |
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| compensation or in
the expectation of compensation, either |
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| directly or indirectly makes, offers to
make, solicits, places, |
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| or negotiates a residential mortgage loan.
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| (ii) "Confidential supervisory information" means any |
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| report of examination, visitation, or investigation prepared |
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| by the Commissioner under this Act, any report of examination, |
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| visitation, or investigation prepared by the state regulatory |
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| authority of another state that examines a licensee, any |
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| document or record prepared or obtained in connection with or |
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| relating to any examination, visitation, or investigation, and |
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| any record prepared or obtained by the Commissioner to the |
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| extent that the record summarizes or contains information |
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| derived from any report, document, or record described in this |
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| subdivision (ii). "Confidential supervisory information" does |
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| not include any information or record routinely prepared by a |
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| licensee and maintained in the ordinary course of business or |
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| any information or record that is required to be made publicly |
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| available pursuant to State or federal law or rule.
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| (Source: P.A. 93-561, eff. 1-1-04.)
|
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| (205 ILCS 635/1-5) (from Ch. 17, par. 2321-5)
|
12 |
| Sec. 1-5. Residential Mortgage Board.
|
13 |
| (a) Board composition, compensation. There is created the |
14 |
| Residential
Mortgage Board composed of 5 members appointed by |
15 |
| the Commissioner of Banks
and Real Estate. The majority of |
16 |
| persons
on the Board shall have no financial interest in any |
17 |
| residential mortgage
business and one member shall be a |
18 |
| representative of the Mortgage Banking Trade
Association and |
19 |
| one member shall be a representative of the Mortgage Broker
|
20 |
| Trade Association. Members of the Board serving on the |
21 |
| effective
date of this amendatory Act of 1996 shall continue to |
22 |
| serve their
unexpired terms as members of the Residential |
23 |
| Mortgage Board. Thereafter, on
or before January 15 of each |
24 |
| year, the Commissioner shall appoint one or more
board members, |
25 |
| as shall be necessary to maintain a 5 member Board, whose terms
|
26 |
| shall be for 3 years commencing February 1 of the year in which |
27 |
| they are
respectively appointed.
|
28 |
| If a vacancy occurs on the Residential Mortgage Board, the |
29 |
| Commissioner
shall within 60 days appoint a new member who |
30 |
| shall hold office for the
remainder of the vacated term.
|
31 |
| The Board shall meet at the call of the chairman, who along |
32 |
| with a
Secretary, shall be selected by the Board from among its |
33 |
| members.
|
|
|
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| Members of the Board shall be entitled to receive a per |
2 |
| diem allowance of
$25 for each day or part of a day spent on |
3 |
| Board work and shall be entitled
to their expenses actually and |
4 |
| necessarily incurred in the performance of
their duties. The |
5 |
| members of the Board serve at the pleasure of the
Commissioner.
|
6 |
| (b) Duties of Board. The Residential Mortgage Board shall |
7 |
| assist the
Commissioner by:
|
8 |
| (1) submitting recommendations to the Commissioner for |
9 |
| the efficient
administration of this Act; and
|
10 |
| (2) performing other duties as are prescribed by the |
11 |
| Commissioner.
|
12 |
| (c) Conflict of interest declarations. Each member of the |
13 |
| Residential
Mortgage Board shall file annually, no later than |
14 |
| February 1, with the
Commissioner a statement of his or her |
15 |
| current business transactions or
other affiliations with any |
16 |
| licensee under this Act.
The Commissioner may adopt rules to |
17 |
| avoid conflicts of interest on the
part of members of the |
18 |
| Residential Mortgage Board in connection with their
position on |
19 |
| the Board.
|
20 |
| (Source: P.A. 89-355, eff. 8-17-95; 89-508, eff. 7-3-96.)
|
21 |
| (205 ILCS 635/2-2) (from Ch. 17, par. 2322-2)
|
22 |
| Sec. 2-2. Application process; investigation; fee.
|
23 |
| (a) The Commissioner shall issue a license upon completion |
24 |
| of all of the
following:
|
25 |
| (1) The filing of an application for license.
|
26 |
| (2) The filing with the Commissioner of a listing of |
27 |
| judgments entered
against, and bankruptcy petitions by, |
28 |
| the license applicant for the
preceding 10 years.
|
29 |
| (3) The payment, in certified funds, of
investigation |
30 |
| and application fees, the total of which shall be in an
|
31 |
| amount equal to $2,700 annually, however, the Commissioner |
32 |
| may
increase the
investigation and application fees by rule |
33 |
| as provided in Section 4-11.
|
|
|
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| (4) Except for a broker applying to renew a license, |
2 |
| the filing of an
audited balance sheet including all |
3 |
| footnotes prepared by a certified public
accountant in |
4 |
| accordance with generally accepted accounting principles |
5 |
| and
generally accepted auditing principles which evidences |
6 |
| that the applicant meets
the net worth requirements of |
7 |
| Section 3-5.
|
8 |
| (5) The filing of proof satisfactory to the |
9 |
| Commissioner that the
applicant, the members thereof if the |
10 |
| applicant is a partnership or
association, the members or |
11 |
| managers thereof that retain any authority or
|
12 |
| responsibility under the operating agreement if the |
13 |
| applicant is a limited
liability company, or the officers |
14 |
| thereof if the applicant
is a corporation have 3 years |
15 |
| experience preceding application
in real estate finance. |
16 |
| Instead of this requirement, the applicant and the
|
17 |
| applicant's officers or members, as applicable, may
|
18 |
| satisfactorily complete a program of education in real |
19 |
| estate finance and
fair lending, as
approved by the |
20 |
| Commissioner, prior to receiving the
initial license.
The |
21 |
| Commissioner shall promulgate rules regarding proof of |
22 |
| experience
requirements and educational requirements and |
23 |
| the satisfactory completion of
those requirements. The |
24 |
| Commissioner may establish by rule a list of duly
licensed |
25 |
| professionals and others who may be exempt from this |
26 |
| requirement.
|
27 |
| (6) An investigation of the averments required by |
28 |
| Section 2-4, which
investigation must allow the |
29 |
| Commissioner to issue positive findings stating
that the |
30 |
| financial responsibility, experience, character, and |
31 |
| general fitness
of the license applicant and of the members |
32 |
| thereof if the license applicant is
a partnership or |
33 |
| association, of the officers and directors thereof if the
|
34 |
| license applicant is a corporation, and of the managers and |
|
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| members that retain
any authority or responsibility under |
2 |
| the operating agreement if the license
applicant is a |
3 |
| limited liability company are such as to command the |
4 |
| confidence
of the community and to warrant belief that the |
5 |
| business will be operated
honestly, fairly and efficiently |
6 |
| within the purpose of this Act. If the
Commissioner shall |
7 |
| not so find, he or she shall not issue such license, and he
|
8 |
| or she shall notify the license applicant of the denial.
|
9 |
| The Commissioner shall have the power to impose conditions |
10 |
| on any approval issued by
the Commissioner if the Commissioner |
11 |
| determines that the conditions are necessary or appropriate. |
12 |
| These conditions shall be imposed in writing and shall continue |
13 |
| in effect for the period prescribed by the Commissioner.
|
14 |
| (b) All licenses shall be issued in duplicate with one copy
|
15 |
| being transmitted to the license applicant and the second being
|
16 |
| retained with the Commissioner.
|
17 |
| Upon receipt of such license, a residential mortgage |
18 |
| licensee shall be
authorized to engage in the business |
19 |
| regulated by this Act. Such license
shall remain in full force |
20 |
| and effect until it expires without renewal, is
surrendered by |
21 |
| the licensee or revoked or suspended as hereinafter provided.
|
22 |
| (Source: P.A. 93-32, eff. 7-1-03.)
|
23 |
| (205 ILCS 635/2-4) (from Ch. 17, par. 2322-4)
|
24 |
| Sec. 2-4. Averments of Licensee. Each application for |
25 |
| license or for the
renewal of a license shall be accompanied by |
26 |
| the following averments stating
that the applicant:
|
27 |
| (a) Will maintain at least one full service office |
28 |
| within the
State of Illinois pursuant to Section 3-4 of |
29 |
| this Act;
|
30 |
| (b) Will maintain staff reasonably adequate to meet the |
31 |
| requirements of
Section 3-4 of this Act;
|
32 |
| (c) Will keep and maintain for 36 months the same |
33 |
| written records
as required by the federal Equal Credit |
|
|
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| Opportunity Act, and any other
information required by |
2 |
| regulations of the Commissioner regarding any home
|
3 |
| mortgage in the course of the conduct of its residential |
4 |
| mortgage business;
|
5 |
| (d) Will file with the Commissioner, when due, any |
6 |
| report or reports
which it is required to file under any of |
7 |
| the provisions of this Act;
|
8 |
| (e) Will not engage, whether as principal or agent, in |
9 |
| the practice of
rejecting residential mortgage |
10 |
| applications without reasonable cause, or
varying terms or |
11 |
| application procedures without reasonable cause, for home
|
12 |
| mortgages on real estate within any specific geographic |
13 |
| area from the terms
or procedures generally provided by the |
14 |
| licensee within other geographic
areas of the State;
|
15 |
| (f) Will not engage in fraudulent home mortgage |
16 |
| underwriting practices;
|
17 |
| (g) Will not make payment, whether directly or |
18 |
| indirectly, of any kind
to any in house or fee appraiser of |
19 |
| any government or private money lending
agency with which |
20 |
| an application for a home mortgage has been filed for the
|
21 |
| purpose of influencing the independent judgment of the |
22 |
| appraiser with respect
to the value of any real estate |
23 |
| which is to be covered by such home mortgage;
|
24 |
| (h) Has filed tax returns (State and Federal) for the |
25 |
| past 3
years or filed with the Commissioner an accountant's |
26 |
| or attorney's
statement as to why no return was filed;
|
27 |
| (i) Will not engage in any discrimination or redlining |
28 |
| activities
prohibited by Section 3-8 of this Act;
|
29 |
| (j) Will not knowingly make any false promises likely |
30 |
| to influence or
persuade, or pursue a course of |
31 |
| misrepresentation and false promises
through agents, |
32 |
| solicitors, advertising or otherwise;
|
33 |
| (k) Will not knowingly misrepresent, circumvent or |
34 |
| conceal, through
whatever subterfuge or device, any of the |
|
|
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| material particulars or the
nature thereof, regarding a |
2 |
| transaction to which it is a party to the
injury of another |
3 |
| party thereto;
|
4 |
| (l) Will disburse funds in accordance with its |
5 |
| agreements;
|
6 |
| (m) Has not committed a crime against the law of this |
7 |
| State, any other
state or of the United States, involving |
8 |
| moral turpitude, fraudulent or
dishonest dealing, and that |
9 |
| no final judgment has been entered against it in
a civil |
10 |
| action upon grounds of fraud, misrepresentation or deceit |
11 |
| which has
not been previously reported to the Commissioner;
|
12 |
| (n) Will account or deliver to any person any personal |
13 |
| property such as
money, fund, deposit, check, draft, |
14 |
| mortgage, other document or thing of
value, which has come |
15 |
| into its possession, and which is not its property,
or |
16 |
| which it is not in law or equity entitled to retain under |
17 |
| the
circumstances, at the time which has been agreed upon |
18 |
| or is required
by law, or, in the absence of a fixed time, |
19 |
| upon demand of the person
entitled to such accounting and |
20 |
| delivery;
|
21 |
| (o) Has not engaged in any conduct which would be cause |
22 |
| for denial of a
license;
|
23 |
| (p) Has not become insolvent;
|
24 |
| (q) Has not submitted an application for a license |
25 |
| under this Act which
contains a material misstatement;
|
26 |
| (r) Has not demonstrated by course of conduct, |
27 |
| negligence or incompetence
in performing any act for which |
28 |
| it is required to hold a license under this
Act;
|
29 |
| (s) Will advise the Commissioner in writing of any |
30 |
| changes to the
information submitted on the most recent |
31 |
| application for license within 30
days of said change. The |
32 |
| written notice must be signed in the same form as
the |
33 |
| application for license being amended;
|
34 |
| (t) Will comply with the provisions of this Act, or |
|
|
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| with any lawful
order, rule or regulation made or issued |
2 |
| under the provisions of this Act;
|
3 |
| (u) Will submit to periodic examination by the |
4 |
| Commissioner as required
by this Act;
|
5 |
| (v) Will advise the Commissioner in writing of |
6 |
| judgments entered
against, and bankruptcy petitions by, |
7 |
| the license applicant within 5
days of occurrence;
|
8 |
| (w) Will advise the Commissioner in writing within 30 |
9 |
| days when the
license applicant requests a licensee under |
10 |
| this Act to repurchase a loan, and
the circumstances |
11 |
| therefor; and
|
12 |
| (x) Will advise the Commissioner in writing within 30 |
13 |
| days when the
license applicant is requested by another |
14 |
| entity to repurchase a loan, and the
circumstances |
15 |
| therefor ;
.
|
16 |
| (y) Will at all times act in a manner consistent with |
17 |
| subsections (a) and
(b) of Section 1-2 of this Act ;
.
|
18 |
| (z)
(x) Will not knowingly hire or employ a loan |
19 |
| originator who is
not registered with the Commissioner as |
20 |
| required under Section 7-1 of this Act ; and |
21 |
| (z-1) Will not knowingly employ or otherwise permit, |
22 |
| except with prior written consent of the Commissioner, an |
23 |
| individual to serve as an officer, director, or employee |
24 |
| for the licensee if the individual has been convicted of a |
25 |
| felony or any criminal offense relating to dishonesty or |
26 |
| breach of trust .
|
27 |
| A licensee who fails to fulfill obligations of an averment, |
28 |
| to comply with
averments made, or otherwise violates any of the |
29 |
| averments made under this
Section shall be subject to the |
30 |
| penalties in Section 4-5 of this Act.
|
31 |
| (Source: P.A. 93-561, eff. 1-1-04; revised 10-9-03.)
|
32 |
| (205 ILCS 635/2-6) (from Ch. 17, par. 2322-6)
|
33 |
| Sec. 2-6. License issuance and renewal; fee.
|
|
|
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|
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| (a) Beginning July 1, 2003, licenses shall be renewed every |
2 |
| year on the
anniversary of the date of issuance of the original |
3 |
| license.
Properly completed renewal application forms and |
4 |
| filing fees must be received
by the Commissioner 60 days prior |
5 |
| to the renewal date.
|
6 |
| (b) It shall be the responsibility of each licensee to |
7 |
| accomplish renewal
of its license; failure of the licensee to |
8 |
| receive renewal forms absent a
request sent by certified mail |
9 |
| for such forms will not waive said
responsibility. Failure by a |
10 |
| licensee to submit a properly completed
renewal application |
11 |
| form and fees in a timely fashion, absent a written
extension |
12 |
| from the Commissioner, will result in the assessment of
|
13 |
| additional fees, as follows:
|
14 |
| (1) A fee of $750 will be assessed to the licensee 30 |
15 |
| days
after the
proper renewal date and $1,500 each month |
16 |
| thereafter, until the
license is
either renewed or expires |
17 |
| pursuant to Section 2-6, subsections (c) and (d),
of this |
18 |
| Act.
|
19 |
| (2) Such fee will be assessed without prior notice to |
20 |
| the licensee, but
will be assessed only in cases wherein |
21 |
| the Commissioner has in his or her
possession documentation |
22 |
| of the licensee's continuing activity for which
the |
23 |
| unrenewed license was issued.
|
24 |
| (c) A license which is not renewed by the date required in |
25 |
| this Section
shall automatically become inactive. No activity |
26 |
| regulated by this Act
shall be conducted by the licensee when a |
27 |
| license becomes inactive. The Commissioner may require the |
28 |
| licensee to provide a plan for the disposition of any |
29 |
| residential mortgage loans not closed or funded when the |
30 |
| license becomes inactive. The Commissioner may approve the |
31 |
| licensee conducting activities regulated by this Act with an |
32 |
| inactive license for the sole purpose of assisting borrowers in |
33 |
| the closing or funding of loans for which the licensee had an |
34 |
| active license at the time the loan application was taken from |
|
|
|
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|
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| a borrower. An
inactive license may be reactivated by filing a |
2 |
| completed reactivation
application with the Commissioner upon
|
3 |
| , payment of the renewal fee, and payment
of a reactivation fee |
4 |
| equal to the renewal fee.
|
5 |
| (d) A license which is not renewed within one year of |
6 |
| becoming inactive
shall expire.
|
7 |
| (e) A licensee ceasing an activity or activities regulated |
8 |
| by this Act
and desiring to no longer be licensed shall so |
9 |
| inform the Commissioner in
writing and, at the same time, |
10 |
| convey the license and all other symbols or
indicia of |
11 |
| licensure. The licensee shall include a plan for the withdrawal
|
12 |
| from regulated business, including a timetable for the |
13 |
| disposition of the
business. Upon receipt of such written |
14 |
| notice, the Commissioner shall issue
a certified statement |
15 |
| canceling the license.
|
16 |
| (Source: P.A. 93-32, eff. 7-1-03; 93-561, eff. 1-1-04; revised |
17 |
| 9-23-03.)
|
18 |
| (205 ILCS 635/3-1) (from Ch. 17, par. 2323-1)
|
19 |
| Sec. 3-1. Bonds of licensees.
|
20 |
| (a) Every licensee, with respect to any person appointed or |
21 |
| elected
to any position requiring the receipt of payment, |
22 |
| management, or use of money
belonging to a residential mortgage |
23 |
| licensee engaged in the activities of
originating, servicing, |
24 |
| or purchasing mortgage loans or whose duties permit him
or her |
25 |
| to have access to or custody of any of its money or securities |
26 |
| or
custody of any money or securities belonging to third |
27 |
| parties or whose duties
permit him or her regularly to make |
28 |
| entries in the books or other records of a
licensee, shall, |
29 |
| before assuming his or her duties, maintain a fidelity bond in
|
30 |
| the amount of $100,000 by some fidelity insurance company |
31 |
| licensed to do
business in this State.
|
32 |
| (b) Each bond shall be for any loss the licensee may |
33 |
| sustain in money or
other property through the commission of |
|
|
|
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| any dishonest or criminal act or
omission by any person |
2 |
| required to be bonded, whether committed alone or in
concert |
3 |
| with another. The bond shall be in the form and amount approved
|
4 |
| by the Commissioner who may at any time require one or more |
5 |
| additional
bonds. A true copy of every bond, including all |
6 |
| riders and endorsements
executed subsequent to the effective |
7 |
| date of the bond, shall be filed at
all times with the |
8 |
| Commissioner. Each bond shall provide that a
cancellation |
9 |
| thereof shall not become effective unless and until
30 days |
10 |
| notice in writing first shall have been given to the |
11 |
| Commissioner
unless he or she shall have approved the |
12 |
| cancellation earlier.
If the Commissioner believes the |
13 |
| licensee's business is being conducted in
an unsafe manner due |
14 |
| to the lack of bonds or the inadequacy of bonds,
he or she may |
15 |
| proceed against the licensee as provided for in Section 4-5.
|
16 |
| (c) All licensees shall maintain a bond in accordance with |
17 |
| this subsection.
Each bond shall be for the recovery of |
18 |
| expenses, fines, or fees due to or
levied by the Commissioner |
19 |
| in accordance with this Act. The bond shall be
payable when the |
20 |
| licensee fails to comply with any provisions of this Act and
|
21 |
| shall be in the form of a surety or licensure bond in the |
22 |
| amount and form as
prescribed by the Commissioner pursuant to |
23 |
| rules and regulations. The bond
shall be payable to the Office |
24 |
| of Banks and Real Estate and shall be issued by some insurance |
25 |
| company
authorized to do business in this State. A copy of the |
26 |
| bond, including any and
all riders and endorsements executed |
27 |
| subsequent to the effective date of the
bond, shall be placed |
28 |
| on file with the Office of Banks and Real Estate within 10 days |
29 |
| of the
execution thereof.
|
30 |
| (d) The Commissioner may promulgate rules with respect to |
31 |
| bonding
requirements for residential mortgage licensees that |
32 |
| are
reasonable and necessary to accomplish the purposes of this |
33 |
| Act.
|
34 |
| (e) The Commissioner may require licensees to maintain a |
|
|
|
09300SB2908sam001 |
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| bond for errors and omissions in performing activities |
2 |
| regulated by this Act.
|
3 |
| (Source: P.A. 89-508, eff. 7-3-96.)
|
4 |
| (205 ILCS 635/3-2) (from Ch. 17, par. 2323-2)
|
5 |
| Sec. 3-2. Annual audit.
|
6 |
| (a) At the licensee's fiscal year-end, but in no
case more |
7 |
| than 12 months after the last audit conducted pursuant to this
|
8 |
| Section, except as otherwise provided in this Section, it shall |
9 |
| be
mandatory for each residential mortgage licensee to
cause |
10 |
| its books and accounts to be audited by a certified public |
11 |
| accountant
not connected with such licensee. The books and |
12 |
| records of all licensees
under this Act shall be maintained on |
13 |
| an accrual basis. The audit must be
sufficiently comprehensive |
14 |
| in scope to permit
the expression of an opinion on the |
15 |
| financial statements, which must be
prepared in accordance with |
16 |
| generally accepted accounting principles, and
must be |
17 |
| performed in accordance with generally accepted auditing |
18 |
| standards. Notwithstanding
the requirements of this |
19 |
| subsection, a licensee that is a first tier subsidiary
may |
20 |
| submit audited consolidated financial statements of its parent |
21 |
| as long as
the consolidated statements are supported by |
22 |
| consolidating statements. The
licensee's chief financial |
23 |
| officer shall attest to the licensee's financial
statements |
24 |
| disclosed in the consolidating statements.
|
25 |
| (b) As used herein, the term "expression of opinion" |
26 |
| includes either
(1) an unqualified opinion, (2) a qualified |
27 |
| opinion, (3) a disclaimer of
opinion, or (4) an adverse |
28 |
| opinion.
|
29 |
| (c) If a qualified or adverse opinion is expressed or if an |
30 |
| opinion is
disclaimed, the reasons therefore must be fully |
31 |
| explained. An opinion,
qualified as to a scope limitation, |
32 |
| shall not be acceptable.
|
33 |
| (d) The most recent audit report shall be filed with the
|
|
|
|
09300SB2908sam001 |
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|
1 |
| Commissioner within 90 days after the end of the licensee's |
2 |
| fiscal year. The report
filed with the Commissioner shall be |
3 |
| certified by the certified public
accountant conducting the |
4 |
| audit. The Commissioner may promulgate rules
regarding late |
5 |
| audit reports.
|
6 |
| (e) If any licensee required to make an audit shall fail to |
7 |
| cause an
audit to be made, the Commissioner shall cause the |
8 |
| same to be made by a
certified public accountant at the |
9 |
| licensee's expense. The Commissioner
shall select such |
10 |
| certified public accountant by advertising for bids or
by such |
11 |
| other fair and impartial means as he or she establishes by |
12 |
| regulation.
|
13 |
| (f) In lieu of the audit or compilation financial statement
|
14 |
| required by this Section, a licensee shall submit and the |
15 |
| Commissioner may
accept any audit made in conformance with the |
16 |
| audit
requirements of the U.S. Department of Housing and Urban |
17 |
| Development.
|
18 |
| (g) With respect to licensees who solely broker residential |
19 |
| mortgage
loans as defined in subsection (o) of Section 1-4, |
20 |
| instead of the audit
required by this Section, the Commissioner |
21 |
| may
accept
compilation financial statements prepared at least |
22 |
| every 12 months, and
the compilation financial statement must |
23 |
| be prepared by an independent
certified public accountant |
24 |
| licensed under the Illinois Public Accounting Act or by an |
25 |
| equivalent state licensing law
with full disclosure in |
26 |
| accordance with generally accepted accounting
principles
|
27 |
| principals and must be submitted within 90 days after the end |
28 |
| of
the licensee's fiscal year. If a
licensee
under this Section |
29 |
| fails to file a compilation as required, the Commissioner
shall |
30 |
| cause an audit of the licensee's books and accounts to be made |
31 |
| by a
certified public accountant at the licensee's expense. The |
32 |
| Commissioner shall
select the certified public accountant by |
33 |
| advertising for bids or by such other
fair and impartial means |
34 |
| as he or she establishes by rule. A licensee who
files false or |
|
|
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| misleading compilation financial statements is guilty of a
|
2 |
| business offense and shall be fined not less than $5,000.
|
3 |
| (h) The workpapers of the certified public accountants |
4 |
| employed
by each
licensee for purposes of this Section are to |
5 |
| be made available to the
Commissioner or the Commissioner's |
6 |
| designee upon request and may be
reproduced by the Commissioner |
7 |
| or the Commissioner's designee to enable to
the Commissioner to |
8 |
| carry out the purposes of this Act.
|
9 |
| (i) Notwithstanding any other provision of this Section, if |
10 |
| a licensee
relying on subsection (g) of this Section causes its |
11 |
| books to be audited at any
other time or causes its financial |
12 |
| statements to be reviewed, a complete copy
of the audited or |
13 |
| reviewed financial statements shall be delivered to the
|
14 |
| Commissioner at the time of the annual license renewal payment |
15 |
| following
receipt by the licensee of the audited or reviewed |
16 |
| financial statements. All workpapers shall be made available to |
17 |
| the
Commissioner upon request. The financial statements and |
18 |
| workpapers may be
reproduced by the Commissioner or the |
19 |
| Commissioner's designee to carry out the
purposes of this Act.
|
20 |
| (Source: P.A. 93-561, eff. 1-1-04.)
|
21 |
| (205 ILCS 635/3-4) (from Ch. 17, par. 2323-4)
|
22 |
| Sec. 3-4. Office and staff within the State.
|
23 |
| (a) A licensee whose principal place of business is located |
24 |
| in the State
of Illinois shall
maintain at least one full |
25 |
| service office with
staff reasonably adequate to handle |
26 |
| efficiently communications, questions,
and all other matters |
27 |
| relating to any application for a home mortgage or an
existing |
28 |
| home mortgage with respect
to which such licensee is performing |
29 |
| services, regardless of kind, for any
borrower or lender, note |
30 |
| owner or holder, or for himself or herself while
engaged in the |
31 |
| residential
mortgage business. The location and operation of a |
32 |
| full service office shall be in compliance with any applicable |
33 |
| zoning laws or ordinances and home office or business |
|
|
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| regulations.
|
2 |
| (b) In lieu of maintaining a full service office in the |
3 |
| State of
Illinois,
a licensee whose principal place of business |
4 |
| is located outside the
State of Illinois
must submit a |
5 |
| certified audit as required in Section 3-2 of this Act
|
6 |
| evidencing a minimum net worth of $100,000, which must be |
7 |
| maintained at all
times, and shall submit and maintain a |
8 |
| fidelity bond in the amount of
$100,000.
|
9 |
| (Source: P.A. 89-355, eff. 8-17-95; 90-301, eff. 8-1-97; |
10 |
| 90-772, eff. 1-1-99.)
|
11 |
| (205 ILCS 635/3-5) (from Ch. 17, par. 2323-5)
|
12 |
| Sec. 3-5. Net worth requirement. A licensee that holds a |
13 |
| license on the
effective date of this amendatory Act of the |
14 |
| 93rd General Assembly shall have and
maintain a net worth of |
15 |
| not less than $100,000; however, no later than 2
years after |
16 |
| the effective date of this amendatory
Act of the 93rd General |
17 |
| Assembly, the licensee must maintain a net worth of not
less |
18 |
| than $150,000. A licensee that first obtains a license after |
19 |
| the effective
date of this amendatory Act of the 93rd General |
20 |
| Assembly must have and maintain
a net worth of not less than |
21 |
| $150,000.
Notwithstanding other requirements of this Section, |
22 |
| the net worth
requirement for a residential mortgage licensee |
23 |
| whose
only licensable
activity is that of brokering residential |
24 |
| mortgage loans and that holds a
license on the effective date |
25 |
| of this amendatory Act of the 93rd General
Assembly shall be |
26 |
| $35,000; however, no later than 2 years after the
effective |
27 |
| date of this amendatory
Act of the 93rd General Assembly, the |
28 |
| licensee must maintain a net worth of
not less than $50,000. |
29 |
| Such a licensee that first obtains a license after the
|
30 |
| effective date of this amendatory Act of the 93rd General |
31 |
| Assembly
must have and maintain a net worth of not less than |
32 |
| $50,000.
Net worth shall be evidenced by a balance sheet |
33 |
| prepared by a certified
public accountant in accordance with |
|
|
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| generally accepted accounting principles
and generally |
2 |
| accepted auditing standards or by the compilation financial
|
3 |
| statements authorized under subsection (g) of Section 3-2. The |
4 |
| Commissioner
may promulgate
rules with respect to net worth |
5 |
| definitions
and requirements for residential mortgage |
6 |
| licensees as necessary to
accomplish the purposes of this Act. |
7 |
| In promulgating such rules, the Commissioner may consider |
8 |
| establishing separate net worth requirements for not for profit |
9 |
| entities or their affiliates that are serving economically |
10 |
| depressed or financially underserved areas. In lieu of the net |
11 |
| worth requirement
established by this Section, the |
12 |
| Commissioner may accept evidence of
conformance by the licensee |
13 |
| with the net worth requirements of the United
States Department |
14 |
| of Housing and Urban Development.
|
15 |
| (Source: P.A. 93-561, eff. 1-1-04.)
|
16 |
| (205 ILCS 635/4-1) (from Ch. 17, par. 2324-1)
|
17 |
| Sec. 4-1. Commissioner of Banks and Real Estate; functions, |
18 |
| powers, and duties. The functions,
powers, and duties of the |
19 |
| Commissioner of Banks and Real Estate shall include the |
20 |
| following:
|
21 |
| (a) To issue or refuse to issue any license as provided by |
22 |
| this Act;
|
23 |
| (b) To revoke or suspend for cause any license issued under |
24 |
| this Act;
|
25 |
| (c) To keep records of all licenses issued under this Act;
|
26 |
| (d) To receive, consider, investigate, and act upon |
27 |
| complaints made by
any person in connection with any |
28 |
| residential mortgage licensee in this State;
|
29 |
| (e) To consider and act upon any recommendations from the |
30 |
| Residential
Mortgage Board;
|
31 |
| (f) To prescribe the forms of and receive:
|
32 |
| (1) applications for licenses; and
|
33 |
| (2) all reports and all books and records required to |
|
|
|
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| be made by
any licensee under this Act, including annual |
2 |
| audited financial statements
and annual reports of |
3 |
| mortgage activity;
|
4 |
| (g) To adopt rules and regulations necessary and proper for |
5 |
| the
administration of this Act;
|
6 |
| (h) To subpoena documents and witnesses and compel their |
7 |
| attendance and
production, to administer oaths, and to require |
8 |
| the production of any books,
papers, or other materials |
9 |
| relevant to any inquiry authorized by this Act;
|
10 |
| (h-1) To issue orders against any person, if the
|
11 |
| Commissioner has reasonable cause to believe that an unsafe, |
12 |
| unsound, or unlawful practice has occurred, is occurring, or is |
13 |
| about to occur, if any person has violated, is violating, or is |
14 |
| about to violate any law, rule, or written agreement with the |
15 |
| Commissioner, or for the purpose of administering the |
16 |
| provisions of this Act and any rule promulgated in accordance |
17 |
| with this Act. |
18 |
| (h-2) To address any inquiries to any licensee, or the |
19 |
| officers thereof, in relation to its activities and conditions, |
20 |
| or any other matter connected with its affairs, and it shall be |
21 |
| the duty of any licensee or person so addressed, to promptly |
22 |
| reply in writing to such inquiries. The Commissioner may also |
23 |
| require reports from any licensee at any time the Commissioner |
24 |
| may deem desirable.
|
25 |
| (i) To require information with regard to any license |
26 |
| applicant
as he or she may deem desirable, with due regard to |
27 |
| the paramount interests
of the public as to the experience, |
28 |
| background, honesty, truthfulness,
integrity, and competency |
29 |
| of the license applicant as to financial
transactions involving |
30 |
| primary or subordinate mortgage financing, and where
the |
31 |
| license applicant is an entity other than an individual, as to |
32 |
| the
honesty, truthfulness, integrity, and competency of any |
33 |
| officer or director
of the corporation, association, or other |
34 |
| entity, or the members of a
partnership;
|
|
|
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| (j) To examine the books and records of every licensee |
2 |
| under this Act at
intervals as specified in Section 4-2;
|
3 |
| (k) To enforce provisions of this Act;
|
4 |
| (l) To levy fees, fines, and charges for services performed |
5 |
| in administering
this Act; the aggregate of all fees collected |
6 |
| by the Commissioner on and after
the effective date of this Act |
7 |
| shall be paid promptly after receipt of the
same, accompanied |
8 |
| by a detailed statement thereof, into the Savings and
|
9 |
| Residential Finance Regulatory Fund; the amounts deposited |
10 |
| into that Fund shall
be used for the ordinary and contingent |
11 |
| expenses of the Office of Banks and
Real Estate. Nothing in |
12 |
| this Act shall prevent continuing the practice of paying
|
13 |
| expenses involving salaries, retirement, social security, and |
14 |
| State-paid
insurance of State officers by appropriation from |
15 |
| the General Revenue Fund.
|
16 |
| (m) To appoint examiners, supervisors, experts, and |
17 |
| special assistants as
needed to effectively and efficiently |
18 |
| administer this Act; and
|
19 |
| (n) To conduct hearings for the purpose of:
|
20 |
| (1) appeals of orders of the Commissioner;
|
21 |
| (2) suspensions or revocations of licenses, or fining |
22 |
| of licensees;
|
23 |
| (3) investigating:
|
24 |
| (i) complaints against licensees; or
|
25 |
| (ii) annual gross delinquency rates; and
|
26 |
| (4) carrying out the purposes of this Act ;
.
|
27 |
| (o) To exercise exclusive visitorial power over a licensee |
28 |
| and to permit a foreign residential mortgage regulator with an |
29 |
| appropriate supervisory interest in the parent or affiliate of |
30 |
| a licensee to exercise exclusive visitorial power over a |
31 |
| licensee; |
32 |
| (p) To enter into cooperative agreements with state |
33 |
| regulatory authorities of other states to provide for |
34 |
| examination of corporate offices or branches of those states |
|
|
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| and to accept reports of such examinations; and |
2 |
| (q) To assign an examiner or examiners to monitor the |
3 |
| affairs of a licensee with whatever frequency the Commissioner |
4 |
| determines appropriate and to charge the licensee for |
5 |
| reasonable and necessary expenses of the Commissioner, if in |
6 |
| the opinion of the Commissioner an emergency exists or appears |
7 |
| likely to occur or if the licensee is engaged in unsafe, |
8 |
| unsound, or unlawful activity or the interest of consumers |
9 |
| appears to be in jeopardy. |
10 |
| (Source: P.A. 89-355, eff. 8-17-95; 89-508, eff. 7-3-96.)
|
11 |
| (205 ILCS 635/4-2) (from Ch. 17, par. 2324-2)
|
12 |
| Sec. 4-2. Examination; prohibited activities.
|
13 |
| (a) The business affairs of a licensee under this Act shall |
14 |
| be examined
for compliance with this Act as often as the |
15 |
| Commissioner deems necessary and
proper. The Commissioner |
16 |
| shall promulgate rules with respect to the frequency
and manner |
17 |
| of examination. The Commissioner shall appoint a suitable |
18 |
| person
to perform such
examination. The Commissioner and his |
19 |
| appointees may examine the
entire
books, records, documents, |
20 |
| and operations of each licensee and may examine
any of the |
21 |
| licensee's officers, directors, employees and agents under |
22 |
| oath.
|
23 |
| (b) The Commissioner shall prepare a
sufficiently
detailed
|
24 |
| report of each
licensee's examination, shall issue a copy of |
25 |
| such report to each
licensee's principals, officers, or |
26 |
| directors and shall take appropriate
steps to ensure correction |
27 |
| of violations of this Act.
|
28 |
| (c) Affiliates of a licensee shall be subject to |
29 |
| examination by the
Commissioner on the same terms as the |
30 |
| licensee, but only when reports
from, or examination of a |
31 |
| licensee provides for documented evidence of
unlawful activity |
32 |
| between a licensee and affiliate benefiting, affecting or
|
33 |
| deriving from the activities regulated by this Act.
|
|
|
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LRB093 18470 WGH 48875 a |
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|
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| (d) The expenses of any examination of the licensee and |
2 |
| affiliates shall
be borne by the licensee and assessed by the |
3 |
| Commissioner as established
by regulation.
|
4 |
| (e) Upon completion of the examination, the Commissioner |
5 |
| shall issue a
report to the licensee. All confidential |
6 |
| supervisory information, including the
The examination report ,
|
7 |
| and the work papers
of the report , shall belong to the |
8 |
| Commissioner's office and may not be
disclosed to anyone other |
9 |
| than the licensee, law enforcement officials or other
|
10 |
| regulatory agencies that have an appropriate regulatory |
11 |
| interest as determined by the Commissioner
shall be defined in |
12 |
| rules promulgated by the
Commissioner , or to a party presenting |
13 |
| a lawful subpoena to the Office of the
Commissioner. The |
14 |
| Commissioner may immediately appeal to the court of |
15 |
| jurisdiction the disclosure of such confidential supervisory |
16 |
| information and seek a stay of the subpoena pending the outcome |
17 |
| of the appeal. Reports required of licensees by the |
18 |
| Commissioner under this Act
and results of examinations |
19 |
| performed by the Commissioner under this Act shall
be the |
20 |
| property of only the licensee and the Commissioner , but may be |
21 |
| shared with the licensee . Access under this
Act to the books |
22 |
| and records of each licensee shall be limited to the
|
23 |
| Commissioner and his agents as provided in this Act and to the |
24 |
| licensee and its
authorized agents and designees. No other |
25 |
| person shall have access to the
books and records of a licensee |
26 |
| under this Act. Any person upon whom a demand for production of |
27 |
| confidential supervisory information is made, whether by |
28 |
| subpoena, order, or other judicial or administrative process, |
29 |
| must withhold production of the confidential supervisory |
30 |
| information and must notify the Commissioner of the demand, at |
31 |
| which time the Commissioner is authorized to intervene for the |
32 |
| purpose of enforcing the limitations of this Section or seeking |
33 |
| the withdrawal or termination of the attempt to compel |
34 |
| production of the confidential information. The Commissioner |
|
|
|
09300SB2908sam001 |
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| may impose any conditions and limitations on the disclosure of |
2 |
| confidential supervisory information that are necessary to |
3 |
| protect the confidentiality of such information. Except as |
4 |
| authorized by the Commissioner, no person obtaining access to |
5 |
| confidential supervisory information may make a copy of the |
6 |
| confidential supervisory information. The Commissioner may |
7 |
| condition a decision to disclose confidential supervisory |
8 |
| information on entry of a protective order by the court or |
9 |
| administrative tribunal presiding in the particular case or on |
10 |
| a written agreement of confidentiality. In a case in which a |
11 |
| protective order or agreement has already been entered between |
12 |
| parties other than the Commissioner, the Commissioner may |
13 |
| nevertheless condition approval for release of confidential |
14 |
| supervisory information upon the inclusion of additional or |
15 |
| amended provisions in the protective order. The Commissioner |
16 |
| may authorize a party who obtained the records for use in one |
17 |
| case to provide them to another party in another case, subject |
18 |
| to any conditions that the Commissioner may impose on either or |
19 |
| both parties. The requestor shall promptly notify other parties |
20 |
| to a case of the release of confidential supervisory |
21 |
| information obtained and, upon entry of a protective order, |
22 |
| shall provide copies of confidential supervisory information |
23 |
| to the other parties.
|
24 |
| (f) The Commissioner, deputy commissioners, and employees
|
25 |
| of the Office of Banks and Real Estate shall be subject to the |
26 |
| restrictions
provided in Section 2.5 of the Office of Banks and |
27 |
| Real Estate Act including,
without limitation, the |
28 |
| restrictions on (i) owning shares of stock or holding
any other |
29 |
| equity interest in an entity regulated under this Act or in any
|
30 |
| corporation or company that owns or controls an entity |
31 |
| regulated under this
Act; (ii) being an officer, director, |
32 |
| employee, or agent of an entity regulated
under this Act; and |
33 |
| (iii) obtaining a loan or accepting a gratuity from an
entity |
34 |
| regulated under this Act.
|
|
|
|
09300SB2908sam001 |
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LRB093 18470 WGH 48875 a |
|
|
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| (g) After the initial examination for those licensees whose |
2 |
| only mortgage
activity is servicing fewer than 1,000 Illinois |
3 |
| residential loans,
the
examination required in subsection (a) |
4 |
| may be waived upon submission of a
letter from the licensee's |
5 |
| independent certified auditor that the licensee
serviced fewer |
6 |
| than 1,000 Illinois residential loans during the
year
in which |
7 |
| the
audit was performed.
|
8 |
| (Source: P.A. 90-301, eff. 8-1-97; 91-586, eff. 8-14-99.)
|
9 |
| (205 ILCS 635/4-5) (from Ch. 17, par. 2324-5)
|
10 |
| Sec. 4-5. Suspension, revocation of licenses; fines.
|
11 |
| (a) Upon written notice to a licensee, the Commissioner may |
12 |
| suspend
or revoke any license issued pursuant to this Act if he |
13 |
| or she shall make a
finding of one or more of the following in |
14 |
| the notice that:
|
15 |
| (1) Through separate acts or an act or a course of |
16 |
| conduct, the licensee
has violated any provisions of this |
17 |
| Act, any rule or regulation
promulgated by the Commissioner |
18 |
| or of any other law, rule or regulation of
this State or |
19 |
| the United States.
|
20 |
| (2) Any fact or condition exists which, if it had |
21 |
| existed at the time of
the original application for such |
22 |
| license would have warranted the
Commissioner in refusing |
23 |
| originally to issue such license.
|
24 |
| (3) If a licensee is other than an individual, any |
25 |
| ultimate
equitable owner, officer, director, or member of |
26 |
| the licensed partnership,
association, corporation, or |
27 |
| other entity has so acted or failed to act as
would be |
28 |
| cause for suspending or revoking a license to that party as |
29 |
| an
individual.
|
30 |
| (b) No license shall be suspended or revoked, except as |
31 |
| provided in this
Section, nor shall any licensee be fined |
32 |
| without notice of his or her right
to a hearing as provided in |
33 |
| Section 4-12 of this Act.
|
|
|
|
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LRB093 18470 WGH 48875 a |
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|
1 |
| (c) The Commissioner, on good cause shown that an emergency |
2 |
| exists, may
suspend any license for a period not
exceeding 180 |
3 |
| days, pending investigation. Upon a showing that a
licensee has |
4 |
| failed to meet the experience or educational requirements of
|
5 |
| Section 2-2 or the requirements of subsection (g) of Section |
6 |
| 3-2, the
Commissioner shall suspend, prior to hearing as |
7 |
| provided in Section 4-12, the
license until those requirements |
8 |
| have been met.
|
9 |
| (d) The provisions of subsection (e) of Section 2-6 of this |
10 |
| Act
shall not affect a licensee's civil or criminal liability
|
11 |
| for acts committed prior to surrender of a license.
|
12 |
| (e) No revocation, suspension or surrender of any license |
13 |
| shall impair
or affect the obligation of any pre-existing |
14 |
| lawful contract between the
licensee and any person.
|
15 |
| (f) Every license issued under this Act shall remain in |
16 |
| force and effect
until the same shall have expired without |
17 |
| renewal, have been surrendered,
revoked or suspended in |
18 |
| accordance with the provisions of this Act, but the
|
19 |
| Commissioner shall have authority to reinstate a suspended |
20 |
| license or to
issue a new license to a licensee whose license |
21 |
| shall have been revoked if
no fact or condition then exists |
22 |
| which would have warranted the
Commissioner in refusing |
23 |
| originally to issue such license under this Act.
|
24 |
| (g) Whenever the Commissioner shall revoke or suspend a |
25 |
| license issued
pursuant to this Act or fine a licensee under |
26 |
| this Act, he or she shall
forthwith execute in duplicate a |
27 |
| written order to that effect. The
Commissioner shall publish |
28 |
| notice of such order in the Illinois Register
and post notice |
29 |
| of such order on an agency Internet site maintained by the |
30 |
| Commissioner
a newspaper of general circulation in the county |
31 |
| in which the license
is located and shall forthwith serve a |
32 |
| copy of such order upon the
licensee. Any such order may be |
33 |
| reviewed in the manner provided by
Section 4-12 of this Act.
|
34 |
| (h) When the Commissioner finds any person in violation of |
|
|
|
09300SB2908sam001 |
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LRB093 18470 WGH 48875 a |
|
|
1 |
| the grounds
set forth in subsection (i), he or she may enter an |
2 |
| order imposing one or
more of the following penalties:
|
3 |
| (1) Revocation of license;
|
4 |
| (2) Suspension of a license subject to reinstatement |
5 |
| upon satisfying all
reasonable conditions the Commissioner |
6 |
| may specify;
|
7 |
| (3) Placement of the licensee or applicant on probation |
8 |
| for a period of
time and subject to all reasonable |
9 |
| conditions as the Commissioner may specify;
|
10 |
| (4) Issuance of a reprimand;
|
11 |
| (5) Imposition of a fine not to exceed $25,000 for each
|
12 |
| count of
separate offense; and
|
13 |
| (6) Denial of a license.
|
14 |
| (i) The following acts shall constitute grounds for which |
15 |
| the
disciplinary actions specified in subsection (h) above may |
16 |
| be taken:
|
17 |
| (1) Being convicted or found guilty, regardless of |
18 |
| pendency of an
appeal, of a crime in any jurisdiction which |
19 |
| involves fraud, dishonest
dealing, or any other act of |
20 |
| moral turpitude;
|
21 |
| (2) Fraud, misrepresentation, deceit or negligence in |
22 |
| any mortgage
financing transaction;
|
23 |
| (3) A material or intentional misstatement of fact on |
24 |
| an initial or
renewal application;
|
25 |
| (4) Failure to follow the Commissioner's regulations |
26 |
| with respect to
placement of funds in escrow accounts;
|
27 |
| (5) Insolvency or filing under any provision of the |
28 |
| Bankruptcy Code
as a debtor;
|
29 |
| (6) Failure to account or deliver to any person any |
30 |
| property such as any
money, fund, deposit, check, draft, |
31 |
| mortgage, or other document or thing of
value, which has |
32 |
| come into his or her hands and which is not his or her
|
33 |
| property or which he or she is not in law or equity |
34 |
| entitled to retain,
under the circumstances and at the time |
|
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| which has been agreed upon or is
required by law or, in the |
2 |
| absence of a fixed time, upon demand of the
person entitled |
3 |
| to such accounting and delivery;
|
4 |
| (7) Failure to disburse funds in accordance with |
5 |
| agreements;
|
6 |
| (8) Any misuse, misapplication, or misappropriation of |
7 |
| trust funds
or escrow funds;
|
8 |
| (9) Having a license, or the equivalent, to practice |
9 |
| any profession or
occupation revoked, suspended, or |
10 |
| otherwise acted against, including the
denial of licensure |
11 |
| by a licensing authority of this State or another
state, |
12 |
| territory or country for fraud, dishonest dealing or any |
13 |
| other act
of moral turpitude;
|
14 |
| (10) Failure to issue a satisfaction of mortgage when |
15 |
| the residential
mortgage has been executed and proceeds |
16 |
| were not disbursed to the benefit
of the mortgagor and when |
17 |
| the mortgagor has fully paid licensee's costs
and |
18 |
| commission;
|
19 |
| (11) Failure to comply with any order of the |
20 |
| Commissioner or rule made
or issued under the provisions of |
21 |
| this Act;
|
22 |
| (12) Engaging in activities regulated by this Act |
23 |
| without a current,
active license unless specifically |
24 |
| exempted by this Act;
|
25 |
| (13) Failure to pay in a timely manner any fee, charge |
26 |
| or fine under
this Act;
|
27 |
| (14) Failure to maintain, preserve, and keep available |
28 |
| for examination,
all books, accounts or other documents |
29 |
| required by the provisions of this
Act and the rules of the |
30 |
| Commissioner;
|
31 |
| (15) Refusal to permit an investigation or examination |
32 |
| of the licensee's
or its affiliates' books and records or |
33 |
| refusal to comply with the
Commissioner's subpoena or |
34 |
| subpoena duces tecum;
|
|
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| (16) A pattern of substantially underestimating the |
2 |
| maximum closing costs;
|
3 |
| (17) Failure to comply with or violation of any |
4 |
| provision of this Act.
|
5 |
| (j) A licensee shall be subject to the disciplinary actions |
6 |
| specified in
this Act for violations of subsection (i) by any |
7 |
| officer, director,
shareholder, joint venture, partner, |
8 |
| ultimate equitable owner, or employee
of the licensee.
|
9 |
| (k) Such licensee shall be subject to suspension or |
10 |
| revocation for
employee actions only if there is a pattern of |
11 |
| repeated violations by
employees or the licensee has knowledge |
12 |
| of the violations.
|
13 |
| (l) Procedure for surrender of license:
|
14 |
| (1) The Commissioner may, after 10 days notice by |
15 |
| certified mail to the
licensee at the address set forth on |
16 |
| the license, stating the contemplated
action and in general |
17 |
| the grounds therefor and the date, time and place of
a |
18 |
| hearing thereon, and after providing the licensee with a |
19 |
| reasonable
opportunity to be heard prior to such action, |
20 |
| fine such licensee an amount
not exceeding $25,000
$10,000
|
21 |
| per violation, or revoke or suspend any license
issued |
22 |
| hereunder if he or she finds that:
|
23 |
| (i) The licensee has failed to comply with any |
24 |
| provision of this Act or
any order, decision, finding, |
25 |
| rule, regulation or direction of the
Commissioner |
26 |
| lawfully made pursuant to the authority of this Act; or
|
27 |
| (ii) Any fact or condition exists which, if it had |
28 |
| existed at the time
of the original application for the |
29 |
| license, clearly would have warranted
the Commissioner |
30 |
| in refusing to issue the license.
|
31 |
| (2) Any licensee may surrender a license by delivering |
32 |
| to the
Commissioner written notice that he or she thereby |
33 |
| surrenders such license,
but surrender shall not affect the |
34 |
| licensee's civil or criminal liability
for acts committed |
|
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| prior to surrender or entitle the licensee to a return
of |
2 |
| any part of the license fee.
|
3 |
| (Source: P.A. 93-561, eff. 1-1-04.)
|
4 |
| (205 ILCS 635/4-9.1 new) |
5 |
| Sec. 4-9.1. Annual report of mortgage and servicing |
6 |
| activities. On or before March 1 of each year, each licensee, |
7 |
| except residential mortgage loan brokers, shall file a report |
8 |
| with the Commissioner that shall disclose information as the |
9 |
| Commissioner deems required. |
10 |
| If the Commissioner finds that another report that the |
11 |
| licensee is required to compile is equivalent to the Annual |
12 |
| Report of Mortgage and Servicing Activities, then the |
13 |
| Commissioner may accept that report as fulfilling the reporting |
14 |
| requirements of this Section. The report required pursuant to |
15 |
| the Home Mortgage Disclosure Act of 1975, 12 U.S.C. 2801 et |
16 |
| seq. and Federal Reserve Board Regulation C, 12 C.F.R. Part |
17 |
| 203, is an example of a report that the Commissioner may find |
18 |
| fulfills the requirements of this Section, if the Commissioner |
19 |
| finds the report equivalent to the Annual Report of Mortgage |
20 |
| and Servicing Activities.
|
21 |
| (205 ILCS 635/6-2) (from Ch. 17, par. 2326-2)
|
22 |
| Sec. 6-2. Removal and prohibition. Upon making any one or |
23 |
| more of the
following findings, the Commissioner may issue a |
24 |
| notice of intent to issue an
order of removal or prohibition, |
25 |
| or an order of removal and prohibition, which
order may remove |
26 |
| a named person, persons, or entity or entities from
|
27 |
| participating in the affairs of one or more licensees and may |
28 |
| be permanent or
for a specific shorter period of time. The |
29 |
| findings required under this Section
may be any one or more of |
30 |
| the following:
|
31 |
| (1) A finding that the party or entity subject to the |
32 |
| order has been
convicted of a crime involving material |
|
|
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| financial loss to a licensee, a
federally insured |
2 |
| depository institution, a government sponsored enterprise, |
3 |
| a
Federal Home Loan Bank, a Federal Reserve Bank, or any |
4 |
| other person.
|
5 |
| (2) A finding that the person or entity subject to the |
6 |
| order has
submitted or caused to be submitted any document |
7 |
| that contains multiple willful
and material misstatements |
8 |
| of facts, and that includes the signature of the
person or |
9 |
| entity specified in the Commissioner's order, or that is |
10 |
| notarized,
certified, verified or is in any other way |
11 |
| attested to, as to its veracity. An
application for |
12 |
| licensure or license renewal may be considered such a |
13 |
| document.
|
14 |
| (3) Conviction of a business offense under subsection |
15 |
| (e) of Section 1-3
or subsection (g) of Section 3-2.
|
16 |
| (4) A finding prepared by a hearing officer pursuant to |
17 |
| a hearing held
under Section 4-1(n) of this Act that the |
18 |
| person subject to the order, while
an employee of a |
19 |
| licensee, has knowingly submitted or caused to be submitted
|
20 |
| any document that contains willful and material |
21 |
| misstatement of facts and which
is used in connection with |
22 |
| any licensable activity as defined in Section 1-3(a)
of |
23 |
| this Act.
|
24 |
| (5) Whenever, in the opinion of the Commissioner, any |
25 |
| director, officer, or employee of a licensee has violated |
26 |
| any law, rule, or order relating to that licensee, has |
27 |
| obstructed or impeded any examination or investigation by |
28 |
| the Commissioner, has engaged in an unsafe, unsound, or |
29 |
| unlawful practice in conducting the business of the |
30 |
| licensee, or has violated any law or engaged or |
31 |
| participated in any unsafe, unsound, or unlawful practice |
32 |
| in connection with any licensee or other business entity |
33 |
| such that the character and fitness of the director, |
34 |
| officer, or employee does not assure reasonable promise of |
|
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| safe, sound, and lawful operation of the licensee, the |
2 |
| Commissioner may issue an order of removal. If, in the |
3 |
| opinion of the Commissioner, any former director, officer, |
4 |
| or employee of a licensee, prior to the termination of his |
5 |
| or her service with that licensee, violated any law, rule, |
6 |
| or order relating to that licensee, obstructed or impeded |
7 |
| any examination or investigation by the Commissioner, |
8 |
| engaged in an unsafe or unsound practice in conducting the |
9 |
| business of that licensee or any subsidiary or holding |
10 |
| company of the licensee, or violated any law or engaged or |
11 |
| participated in any unsafe, unsound, or unlawful practice |
12 |
| in connection with any financial institution or other |
13 |
| business entity such that the character and fitness of the |
14 |
| director, officer, or employee would not have assured |
15 |
| reasonable promise of safe, sound, and lawful operation of |
16 |
| the licensee, the Commissioner may issue an order |
17 |
| prohibiting that person from further service with a |
18 |
| licensee as a director, officer, or employee. An order |
19 |
| issued pursuant to this subdivision (5) shall be served |
20 |
| upon the director, officer, or employee. A copy of the |
21 |
| order shall be sent to each owner or director of the |
22 |
| licensee affected by registered mail. The person affected |
23 |
| by the action may make a request to the Commissioner for a |
24 |
| hearing pursuant to subsection (n) of Section 4-1 within 10 |
25 |
| days after receipt of the order. The hearing shall be held |
26 |
| before a hearing officer within 30 days after the request |
27 |
| has been received by the Commissioner. The hearing officer |
28 |
| shall prepare a finding and report the finding to the |
29 |
| Commissioner who shall consider the finding in making his |
30 |
| or her determination approving, modifying, or disapproving |
31 |
| his or her order as a final administrative decision. If a |
32 |
| hearing is held before a hearing officer, the Commissioner |
33 |
| shall make his or her determination within 60 days from the |
34 |
| conclusion of the hearing. Any person affected by a |
|
|
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| decision of the Commissioner under this subdivision (5) may |
2 |
| have the decision reviewed only under and in accordance |
3 |
| with the Administrative Review Law and the rules adopted |
4 |
| pursuant to the Administrative Review Law. A copy of the |
5 |
| order shall also be served upon the licensee of which he or |
6 |
| she is a director, officer, or employee, whereupon he or |
7 |
| she shall cease to be a director, officer, or employee of |
8 |
| that licensee. The Commissioner may institute a civil |
9 |
| action against the director, officer, or employee of the |
10 |
| licensee to enforce compliance with or to enjoin any |
11 |
| violation of the terms of the order. Any person who has |
12 |
| been the subject of an order of removal or an order of |
13 |
| prohibition issued by the Commissioner under this |
14 |
| subdivision (5) may not thereafter serve as director, |
15 |
| officer, or employee of any licensee, or of any other |
16 |
| entity that is subject to licensure or regulation by the |
17 |
| Commissioner or the Office of Banks and Real Estate unless |
18 |
| the Commissioner has granted prior approval in writing.
|
19 |
| (Source: P.A. 89-355, eff. 8-17-95; 90-772, eff. 1-1-99.)".
|