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1     AN ACT concerning regulation.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Residential Real Property Disclosure Act is
5 amended by changing Section 70 as follows:
 
6     (765 ILCS 77/70)
7     Sec. 70. Predatory lending database pilot program.
8     (a) As used in this Article:
9     "Borrower" means a person seeking a mortgage loan.
10     "Broker" means a "broker" or "loan broker", as defined in
11 subsection (p) of Section 1-4 of the Residential Mortgage
12 License Act of 1987.
13     "Closing agent" means an individual assigned by a title
14 insurance company or a broker or originator to ensure that the
15 execution of documents related to the closing of a real estate
16 sale or the refinancing of a real estate loan and the
17 disbursement of closing funds are in conformity with the
18 instructions of the entity financing the transaction.
19     "Department" means the Department of Financial and
20 Professional Regulation.
21     "Exempt person" means that term as it is defined in
22 subsections (d)(1) and (d)(1.5) of Section 1-4 of the
23 Residential Mortgage License Act of 1987.
24     "Lender" means that term as it is defined in subsection (g)
25 of Section 1-4 of the Residential Mortgage License Act.
26     "Licensee" means that term as it is defined in subsection
27 (e) of Section 1-4 of the Residential Mortgage License Act of
28 1987.
29     "Mortgage loan" means that term as it is defined in
30 subsection (f) of Section 1-4 of the Residential Mortgage
31 License Act of 1987.
32     "Originator" means a "loan originator" as defined in

 

 

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1 subsection (hh) of Section 1-4 of the Residential Mortgage
2 License Act of 1987, except an exempt person.
3     "Pilot program area" means all areas within Cook County
4 designated as such by the Department due to the high rate of
5 foreclosure on residential home mortgages that is primarily the
6 result of predatory lending practices. The Department shall
7 designate the pilot program area within 30 days after the
8 effective date of this amendatory Act of the 94th General
9 Assembly.
10     "Title insurance company" means any domestic company
11 organized under the laws of this State for the purpose of
12 conducting the business of guaranteeing or insuring titles to
13 real estate and any title insurance company organized under the
14 laws of another State, the District of Columbia, or a foreign
15 government and authorized to transact the business of
16 guaranteeing or insuring titles to real estate in this State.
17     (a-5) Inception date. The Secretary of Financial and
18 Professional Regulation shall declare in writing the date of
19 inception of the pilot program. The inception date shall be at
20 least 30 days after the date the Secretary issues a declaration
21 establishing that date. The Secretary's declaration shall be
22 posted on the Department's website, and the Department shall
23 communicate the declaration to affected licensees of the
24 Department. Until the inception date, none of the duties,
25 obligations, contingencies, or consequences of or from the
26 pilot program shall be imposed. The pilot program shall apply
27 to all mortgage applications made or taken on or after the
28 inception of the pilot program.
29     (b) A predatory lending database pilot program is
30 established within the pilot program area, effective upon the
31 inception date established by the Secretary of the Department.
32 The pilot program shall be in effect and operational continue
33 for a total of 4 years after its creation and shall be
34 administered in accordance with Article 3 of this Act. The
35 database created under this program shall be maintained and
36 administered by the Department. The database shall be designed

 

 

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1 to allow brokers, originators, credit counselors, title
2 insurance companies, and closing agents to submit information
3 to the database online. The database shall not be designed to
4 allow those entities to retrieve information from the database,
5 except as otherwise provided in this Article. Information
6 submitted by the broker or originator to the Department may be
7 used to populate the online form submitted by a credit
8 counselor, title insurance company, or closing agent.
9     (c) Within 10 days after taking a mortgage application, the
10 broker or originator for any mortgage on residential property
11 within the pilot program area must submit to the predatory
12 lending database all of the information required under Section
13 72 and any other information required by the Department by
14 rule. Within 7 days after receipt of the information, the
15 Department shall compare that information to credit counseling
16 standards developed by the Department by rule and issue to the
17 borrower and the broker or originator a determination of
18 whether credit counseling is recommended for the borrower. The
19 borrower may not waive credit counseling. If at any time after
20 submitting the information required under Section 72 the broker
21 or originator (i) changes the terms of the loan or (ii) issues
22 a new commitment to the borrower, then, within 5 days
23 thereafter, the broker or originator shall re-submit all of the
24 information required under Section 72 and, within 4 days after
25 receipt of the information re-submitted by the broker or
26 originator, the Department shall compare that information to
27 credit counseling standards developed by the Department by rule
28 and shall issue to the borrower and the broker or originator a
29 new determination of whether credit counseling is recommended
30 for the borrower based on the information re-submitted by the
31 broker or originator.
32     (d) If the Department recommends credit counseling for the
33 borrower under subsection (c), then the Department shall notify
34 the borrower of all HUD-certified counseling agencies located
35 within the State and direct the borrower to interview with a
36 counselor associated with one of those agencies. Within 10 days

 

 

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1 after receipt of the notice of HUD-certified counseling
2 agencies, the borrower shall select one of those agencies and
3 shall engage in an interview with a counselor associated with
4 that agency. Within 7 days after interviewing the borrower, the
5 credit counselor must submit to the predatory lending database
6 all of the information required under Section 74 and any other
7 information required by the Department by rule. Any costs
8 associated with credit counseling provided under the pilot
9 program shall be paid by the broker or originator.
10     (e) The broker or originator and the borrower may not take
11 any legally binding action concerning the loan transaction
12 until the later of the following:
13         (1) the Department issues a determination not to
14     recommend credit counseling for the borrower in accordance
15     with subsection (c); or
16         (2) the Department issues a determination that credit
17     counseling is recommended for the borrower and the credit
18     counselor submits all required information to the database
19     in accordance with subsection (d).
20     (f) Within 10 days after closing, the title insurance
21 company or closing agent must submit to the predatory lending
22 database all of the information required under Section 76 and
23 any other information required by the Department by rule.
24     (g) The Upon recording the mortgage, the title insurance
25 company or closing agent shall attach to the mortgage must
26 simultaneously file with the recorder a certificate of its
27 compliance with the requirements of this Article, as generated
28 by the database. If the title insurance company or closing
29 agent fails to attach file the certificate of compliance, then
30 the mortgage is not recordable. In addition, if any lis pendens
31 for a residential mortgage foreclosure is recorded on the
32 property within the pilot program area, a certificate of
33 service must be simultaneously recorded that affirms that a
34 copy of the lis pendens was filed with the Department. If the
35 certificate of service is not recorded, then the lis pendens
36 pertaining to the residential mortgage foreclosure in question

 

 

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1 is not recordable and is of no force and effect.
2     (h) All information provided to the predatory lending
3 database under the program is confidential and is not subject
4 to disclosure under the Freedom of Information Act, except as
5 otherwise provided in this Article. Any borrower may authorize
6 in writing the release of database information. The Department
7 may use the information in the database without the consent of
8 the borrower: (i) for the purposes of administering and
9 enforcing the pilot program; (ii) to provide relevant
10 information to a credit counselor providing credit counseling
11 to a borrower under the pilot program; or (iii) to the
12 appropriate law enforcement agency or the applicable
13 administrative agency if the database information demonstrates
14 criminal, fraudulent, or otherwise illegal activity.
15     (i) Nothing in this Article is intended to prevent a
16 borrower from making his or her own decision as to whether to
17 proceed with a transaction.
18     (j) Any person who violates any provision of this Article
19 commits an unlawful practice within the meaning of the Consumer
20 Fraud and Deceptive Business Practices Act.
21     (k) Not later than one year after the Department designates
22 the pilot program area and annually thereafter during the
23 existence of the pilot program, the Department shall report to
24 the Governor and to the General Assembly concerning its
25 administration and the effectiveness of the pilot program.
26 (Source: P.A. 94-280, eff. 1-1-06.)
 
27     Section 99. Effective date. This Act takes effect upon
28 becoming law.