HB4011 Enrolled LRB096 05294 MJR 15360 b

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 Mortgage License Act of 1987 is
5 amended by changing Sections 1-2, 1-3, 1-4, 2-2, 2-3, 2-4, 2-6,
6 3-1, 3-2, 3-4, 4-1, 4-2, 4-5, 4-8.3, 7-1, and the heading of
7 Article VII and by adding Sections 4-7, 4-8.1A, 4-9.1, 7-1A,
8 7-2, 7-3, 7-4, 7-5, 7-6, 7-7, 7-8, 7-9, 7-10, 7-11, 7-12, 7-13,
9 and 7-14 as follows:
 
10     (205 ILCS 635/1-2)  (from Ch. 17, par. 2321-2)
11     Sec. 1-2. Purpose of Act and Policy Statement.
12     (a) The origination, funding, purchasing and brokering of
13 residential mortgage loans and the type of entities involved in
14 residential mortgage lending have undergone significant
15 changes in recent years, due in part to developments in the
16 general economy, specifically interest rate volatility, the
17 sophistication of the national secondary market for mortgage
18 loans and the market for mortgage backed securities. The recent
19 trend toward deregulation in the financial services industry
20 has accelerated the evolution of residential mortgage lending,
21 dramatically increasing the types of mortgage loans offered and
22 the manner in which they are advertised and marketed to
23 consumers. Depository institutions, traditionally the major

 

 

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1 source of residential mortgage financing for individuals, now
2 compete for capital and customers with mortgage bankers and
3 other financial service organizations. Residential mortgage
4 lenders of every type have increasingly relied on nonfinancial
5 intermediaries, such as mortgage brokers, to find customers.
6 These developments have raised questions as to whether all
7 entities engaging in this banking function operate under
8 appropriate regulatory scrutiny and as to whether all
9 residential mortgage lenders are conducting their business in
10 the best interests of Illinois homeowners and potential
11 homeowners.
12     (b) The activities of lenders and their offering of
13 financing for residential real property have a direct and
14 immediate impact upon the housing industry, the neighborhoods
15 and communities of this State, its homeowners and potential
16 homeowners. The General Assembly finds that it is essential for
17 the protection of the citizens of this State and the stability
18 of the State's economy that reasonable standards governing the
19 business practices of residential mortgage lenders and their
20 agents be imposed. The General Assembly further finds that the
21 obligations of lenders and their agents to consumers in
22 connection with making, soliciting, processing, placing or
23 negotiating of residential mortgage loans are such as to
24 warrant the uniform regulation of the residential mortgage
25 lending process, including the application, solicitation,
26 making and servicing of residential mortgage loans. The purpose

 

 

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1 of this Act is to protect Illinois consumers seeking
2 residential mortgage loans and to ensure that the residential
3 mortgage lending industry is operating fairly, honestly and
4 efficiently, free from deceptive and anti-competitive
5 practices. The purpose of this Act is to regulate residential
6 mortgage lending to benefit our citizens by ensuring
7 availability of residential mortgage funding, to benefit
8 responsible providers of residential mortgage loans and
9 services, and to avoid requirements inconsistent with
10 legitimate and responsible business practices in the
11 residential mortgage lending industry.
12     (c) The General Assembly finds that the provisions of this
13 amendatory Act of the 96th General Assembly that set forth the
14 authority and framework for State participation in a Nationwide
15 Mortgage Licensing System and Registry are consistent with the
16 purposes of this Section and for the purpose of complying with
17 the federal Secure and Fair Enforcement for Mortgage Licensing
18 Act of 2008.
19 (Source: P.A. 85-735.)
 
20     (205 ILCS 635/1-3)  (from Ch. 17, par. 2321-3)
21     Sec. 1-3. Necessity for License; Scope of Act.
22     (a) No person, partnership, association, corporation or
23 other entity shall engage in the business of brokering,
24 funding, originating, servicing or purchasing of residential
25 mortgage loans without first obtaining a license from the

 

 

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1 Commissioner in accordance with the licensing procedure
2 provided in this Article I and such regulations as may be
3 promulgated by the Commissioner. The licensing provisions of
4 this Section shall not apply to any entity engaged solely in
5 commercial mortgage lending or to any person, partnership
6 association, corporation or other entity exempted pursuant to
7 Section 1-4, subsection (d), of this Act or in accordance with
8 regulations promulgated by the Commissioner hereunder. No
9 provision of this Act shall apply to an exempt person or entity
10 as defined in items (1) and (1.5) of subsection (d) of Section
11 1-4 of this Act.
12     (b) No person, partnership, association, corporation, or
13 other entity except a licensee under this Act or an entity
14 exempt from licensing pursuant to Section 1-4, subsection (d),
15 of this Act shall do any business under any name or title, or
16 circulate or use any advertising or make any representation or
17 give any information to any person, which indicates or
18 reasonably implies activity within the scope of this Act.
19     (c) The Commissioner may, through the Attorney General,
20 request the circuit court of either Cook or Sangamon County to
21 issue an injunction to restrain any person from violating or
22 continuing to violate any of the foregoing provisions of this
23 Section.
24     (d) When the Commissioner has reasonable cause to believe
25 that any entity which has not submitted an application for
26 licensure is conducting any of the activities described in

 

 

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1 subsection (a) hereof, the Commissioner shall have the power to
2 examine all books and records of the entity and any additional
3 documentation necessary in order to determine whether such
4 entity should become licensed under this Act.
5     (d-1) The Commissioner may issue orders against any person
6 if the Commissioner has reasonable cause to believe that an
7 unsafe, unsound, or unlawful practice has occurred, is
8 occurring, or is about to occur, if any person has violated, is
9 violating, or is about to violate any law, rule, or written
10 agreement with the Commissioner, or for the purposes of
11 administering the provisions of this Act and any rule adopted
12 in accordance with this Act.
13     (e) Any person, partnership, association, corporation or
14 other entity who violates any provision of this Section commits
15 a business offense and shall be fined an amount not to exceed
16 $25,000.
17     (f) Each person, partnership, association, corporation or
18 other entity conducting activities regulated by this Act shall
19 be issued one license. Each office, place of business or
20 location at which a residential mortgage licensee conducts any
21 part of his or her business must be recorded with the
22 Commissioner pursuant to Section 2-8 of this Act.
23     (g) Licensees under this Act shall solicit, broker, fund,
24 originate, service and purchase residential mortgage loans
25 only in conformity with the provisions of this Act and such
26 rules and regulations as may be promulgated by the

 

 

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1 Commissioner.
2     (h) This Act applies to all entities doing business in
3 Illinois as residential mortgage bankers, as defined by "An Act
4 to provide for the regulation of mortgage bankers", approved
5 September 15, 1977, as amended, regardless of whether licensed
6 under that or any prior Act. Any existing residential mortgage
7 lender or residential mortgage broker in Illinois whether or
8 not previously licensed, must operate in accordance with this
9 Act.
10     (i) This Act is a successor Act to and a continuance of the
11 regulation of residential mortgage bankers provided in, "An Act
12 to provide for the regulation of mortgage bankers", approved
13 September 15, 1977, as amended.
14     Entities and persons subject to the predecessor Act shall
15 be subject to this Act from and after its effective date.
16 (Source: P.A. 93-1018, eff. 1-1-05.)
 
17     (205 ILCS 635/1-4)  (from Ch. 17, par. 2321-4)
18     Sec. 1-4. Definitions.
19     (a) "Residential real property" or "residential real
20 estate" shall mean any real property located in Illinois, upon
21 which is constructed or intended to be constructed a dwelling
22 real property located in this State improved by a one-to-four
23 family dwelling used or occupied, wholly or partly, as the home
24 or residence of one or more persons and may refer, subject to
25 regulations of the Commissioner, to unimproved real property

 

 

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1 upon which those kinds dwellings are to be constructed.
2     (b) "Making a residential mortgage loan" or "funding a
3 residential mortgage loan" shall mean for compensation or gain,
4 either directly or indirectly, advancing funds or making a
5 commitment to advance funds to a loan applicant for a
6 residential mortgage loan.
7     (c) "Soliciting, processing, placing, or negotiating a
8 residential mortgage loan" shall mean for compensation or gain,
9 either directly or indirectly, accepting or offering to accept
10 an application for a residential mortgage loan, assisting or
11 offering to assist in the processing of an application for a
12 residential mortgage loan on behalf of a borrower, or
13 negotiating or offering to negotiate the terms or conditions of
14 a residential mortgage loan with a lender on behalf of a
15 borrower including, but not limited to, the submission of
16 credit packages for the approval of lenders, the preparation of
17 residential mortgage loan closing documents, including a
18 closing in the name of a broker.
19     (d) "Exempt person or entity" shall mean the following:
20         (1) (i) Any banking organization or foreign banking
21     corporation licensed by the Illinois Commissioner of Banks
22     and Real Estate or the United States Comptroller of the
23     Currency to transact business in this State; (ii) any
24     national bank, federally chartered savings and loan
25     association, federal savings bank, federal credit union;
26     (iii) any pension trust, bank trust, or bank trust company;

 

 

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1     (iv) any bank, savings and loan association, savings bank,
2     or credit union organized under the laws of this or any
3     other state; (v) any Illinois Consumer Installment Loan Act
4     licensee; (vi) any insurance company authorized to
5     transact business in this State; (vii) any entity engaged
6     solely in commercial mortgage lending; (viii) any service
7     corporation of a savings and loan association or savings
8     bank organized under the laws of this State or the service
9     corporation of a federally chartered savings and loan
10     association or savings bank having its principal place of
11     business in this State, other than a service corporation
12     licensed or entitled to reciprocity under the Real Estate
13     License Act of 2000; or (ix) any first tier subsidiary of a
14     bank, the charter of which is issued under the Illinois
15     Banking Act by the Illinois Commissioner of Banks and Real
16     Estate, or the first tier subsidiary of a bank chartered by
17     the United States Comptroller of the Currency and that has
18     its principal place of business in this State, provided
19     that the first tier subsidiary is regularly examined by the
20     Illinois Commissioner of Banks and Real Estate or the
21     Comptroller of the Currency, or a consumer compliance
22     examination is regularly conducted by the Federal Reserve
23     Board.
24         (1.5) Any employee of a person or entity mentioned in
25     item (1) of this subsection, when acting for such person or
26     entity, or any registered mortgage loan originator when

 

 

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1     acting for an entity described in subsection (tt) of this
2     Section.
3         (2) Any person or entity that does not originate
4     mortgage loans in the ordinary course of business making or
5     acquiring residential mortgage loans with his or her or its
6     own funds for his or her or its own investment without
7     intent to make, acquire, or resell more than 2 10
8     residential mortgage loans in any one calendar year.
9         (3) Any person employed by a licensee to assist in the
10     performance of the activities regulated by this Act who is
11     compensated in any manner by only one licensee.
12         (4) (Blank). Any person licensed pursuant to the Real
13     Estate License Act of 2000, who engages only in the taking
14     of applications and credit and appraisal information to
15     forward to a licensee or an exempt entity under this Act
16     and who is compensated by either a licensee or an exempt
17     entity under this Act, but is not compensated by either the
18     buyer (applicant) or the seller.
19         (5) Any individual, corporation, partnership, or other
20     entity that originates, services, or brokers residential
21     mortgage loans, as these activities are defined in this
22     Act, and who or which receives no compensation for those
23     activities, subject to the Commissioner's regulations with
24     regard to the nature and amount of compensation.
25         (6) (Blank). A person who prepares supporting
26     documentation for a residential mortgage loan application

 

 

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1     taken by a licensee and performs ministerial functions
2     pursuant to specific instructions of the licensee who
3     neither requires nor permits the preparer to exercise his
4     or her discretion or judgment; provided that this activity
5     is engaged in pursuant to a binding, written agreement
6     between the licensee and the preparer that:
7             (A) holds the licensee fully accountable for the
8         preparer's action; and
9             (B) otherwise meets the requirements of this
10         Section and this Act, does not undermine the purposes
11         of this Act, and is approved by the Commissioner.
12     (e) "Licensee" or "residential mortgage licensee" shall
13 mean a person, partnership, association, corporation, or any
14 other entity who or which is licensed pursuant to this Act to
15 engage in the activities regulated by this Act.
16     (f) "Mortgage loan" "residential mortgage loan" or "home
17 mortgage loan" shall mean any loan primarily for personal,
18 family, or household use that is secured by a mortgage, deed of
19 trust, or other equivalent consensual security interest on a
20 dwelling as defined in Section 103(v) of the federal Truth in
21 Lending Act, or residential real estate upon which is
22 constructed or intended to be constructed a dwelling a loan to
23 or for the benefit of any natural person made primarily for
24 personal, family, or household use, primarily secured by either
25 a mortgage on residential real property or certificates of
26 stock or other evidence of ownership interests in and

 

 

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1 proprietary leases from, corporations, partnerships, or
2 limited liability companies formed for the purpose of
3 cooperative ownership of residential real property, all
4 located in Illinois.
5     (g) "Lender" shall mean any person, partnership,
6 association, corporation, or any other entity who either lends
7 or invests money in residential mortgage loans.
8     (h) "Ultimate equitable owner" shall mean a person who,
9 directly or indirectly, owns or controls an ownership interest
10 in a corporation, foreign corporation, alien business
11 organization, trust, or any other form of business organization
12 regardless of whether the person owns or controls the ownership
13 interest through one or more persons or one or more proxies,
14 powers of attorney, nominees, corporations, associations,
15 partnerships, trusts, joint stock companies, or other entities
16 or devices, or any combination thereof.
17     (i) "Residential mortgage financing transaction" shall
18 mean the negotiation, acquisition, sale, or arrangement for or
19 the offer to negotiate, acquire, sell, or arrange for, a
20 residential mortgage loan or residential mortgage loan
21 commitment.
22     (j) "Personal residence address" shall mean a street
23 address and shall not include a post office box number.
24     (k) "Residential mortgage loan commitment" shall mean a
25 contract for residential mortgage loan financing.
26     (l) "Party to a residential mortgage financing

 

 

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1 transaction" shall mean a borrower, lender, or loan broker in a
2 residential mortgage financing transaction.
3     (m) "Payments" shall mean payment of all or any of the
4 following: principal, interest and escrow reserves for taxes,
5 insurance and other related reserves, and reimbursement for
6 lender advances.
7     (n) "Commissioner" shall mean the Commissioner of Banks and
8 Real Estate, except that all references in this Act to the
9 Commissioner of Banks and Real Estate are deemed, in
10 appropriate contexts, to be references to the Secretary of
11 Financial and Professional Regulation, or his or her designee,
12 including the Director of the Division of Banking of the
13 Department of Financial and Professional Regulation or a person
14 authorized by the Commissioner, the Office of Banks and Real
15 Estate Act, or this Act to act in the Commissioner's stead.
16     (n-1) "Director" shall mean the Director of the Division of
17 Banking of the Department of Financial and Professional
18 Regulation, except that beginning on the effective date of this
19 amendatory Act of the 96th General Assembly, all references in
20 this Act to the Director are deemed, in appropriate contexts,
21 to be the Secretary of Financial and Professional Regulation,
22 or his or her designee, including the Director of the Division
23 of Banking of the Department of Financial and Professional
24 Regulation.
25     (o) "Loan brokering", "brokering", or "brokerage service"
26 shall mean the act of helping to obtain from another entity,

 

 

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1 for a borrower, a loan secured by residential real estate
2 situated in Illinois or assisting a borrower in obtaining a
3 loan secured by residential real estate situated in Illinois in
4 return for consideration to be paid by either the borrower or
5 the lender including, but not limited to, contracting for the
6 delivery of residential mortgage loans to a third party lender
7 and soliciting, processing, placing, or negotiating
8 residential mortgage loans.
9     (p) "Loan broker" or "broker" shall mean a person,
10 partnership, association, corporation, or limited liability
11 company, other than those persons, partnerships, associations,
12 corporations, or limited liability companies exempted from
13 licensing pursuant to Section 1-4, subsection (d), of this Act,
14 who performs the activities described in subsections (c) and
15 (o) of this Section.
16     (q) "Servicing" shall mean the collection or remittance for
17 or the right or obligation to collect or remit for any lender,
18 noteowner, noteholder, or for a licensee's own account, of
19 payments, interests, principal, and trust items such as hazard
20 insurance and taxes on a residential mortgage loan in
21 accordance with the terms of the residential mortgage loan; and
22 includes loan payment follow-up, delinquency loan follow-up,
23 loan analysis and any notifications to the borrower that are
24 necessary to enable the borrower to keep the loan current and
25 in good standing.
26     (r) "Full service office" shall mean an office, provided by

 

 

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1 the licensee and not subleased from the licensee's employees,
2 and staff in Illinois reasonably adequate to handle efficiently
3 communications, questions, and other matters relating to any
4 application for, or an existing home mortgage secured by
5 residential real estate situated in Illinois with respect to
6 which the licensee is brokering, funding originating,
7 purchasing, or servicing. The management and operation of each
8 full service office must include observance of good business
9 practices such as adequate, organized, and accurate books and
10 records; ample phone lines, hours of business, staff training
11 and supervision, and provision for a mechanism to resolve
12 consumer inquiries, complaints, and problems. The Commissioner
13 shall issue regulations with regard to these requirements and
14 shall include an evaluation of compliance with this Section in
15 his or her periodic examination of each licensee.
16     (s) "Purchasing" shall mean the purchase of conventional or
17 government-insured mortgage loans secured by residential real
18 estate situated in Illinois from either the lender or from the
19 secondary market.
20     (t) "Borrower" shall mean the person or persons who seek
21 the services of a loan broker, originator, or lender.
22     (u) "Originating" shall mean the issuing of commitments for
23 and funding of residential mortgage loans.
24     (v) "Loan brokerage agreement" shall mean a written
25 agreement in which a broker or loan broker agrees to do either
26 of the following:

 

 

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1         (1) obtain a residential mortgage loan for the borrower
2     or assist the borrower in obtaining a residential mortgage
3     loan; or
4         (2) consider making a residential mortgage loan to the
5     borrower.
6     (w) "Advertisement" shall mean the attempt by publication,
7 dissemination, or circulation to induce, directly or
8 indirectly, any person to enter into a residential mortgage
9 loan agreement or residential mortgage loan brokerage
10 agreement relative to a mortgage secured by residential real
11 estate situated in Illinois.
12     (x) "Residential Mortgage Board" shall mean the
13 Residential Mortgage Board created in Section 1-5 of this Act.
14     (y) "Government-insured mortgage loan" shall mean any
15 mortgage loan made on the security of residential real estate
16 insured by the Department of Housing and Urban Development or
17 Farmers Home Loan Administration, or guaranteed by the Veterans
18 Administration.
19     (z) "Annual audit" shall mean a certified audit of the
20 licensee's books and records and systems of internal control
21 performed by a certified public accountant in accordance with
22 generally accepted accounting principles and generally
23 accepted auditing standards.
24     (aa) "Financial institution" shall mean a savings and loan
25 association, savings bank, credit union, or a bank organized
26 under the laws of Illinois or a savings and loan association,

 

 

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1 savings bank, credit union or a bank organized under the laws
2 of the United States and headquartered in Illinois.
3     (bb) "Escrow agent" shall mean a third party, individual or
4 entity charged with the fiduciary obligation for holding escrow
5 funds on a residential mortgage loan pending final payout of
6 those funds in accordance with the terms of the residential
7 mortgage loan.
8     (cc) "Net worth" shall have the meaning ascribed thereto in
9 Section 3-5 of this Act.
10     (dd) "Affiliate" shall mean:
11         (1) any entity that directly controls or is controlled
12     by the licensee and any other company that is directly
13     affecting activities regulated by this Act that is
14     controlled by the company that controls the licensee;
15         (2) any entity:
16             (A) that is controlled, directly or indirectly, by
17         a trust or otherwise, by or for the benefit of
18         shareholders who beneficially or otherwise control,
19         directly or indirectly, by trust or otherwise, the
20         licensee or any company that controls the licensee; or
21             (B) a majority of the directors or trustees of
22         which constitute a majority of the persons holding any
23         such office with the licensee or any company that
24         controls the licensee;
25         (3) any company, including a real estate investment
26     trust, that is sponsored and advised on a contractual basis

 

 

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1     by the licensee or any subsidiary or affiliate of the
2     licensee.
3     The Commissioner may define by rule and regulation any
4 terms used in this Act for the efficient and clear
5 administration of this Act.
6     (ee) "First tier subsidiary" shall be defined by regulation
7 incorporating the comparable definitions used by the Office of
8 the Comptroller of the Currency and the Illinois Commissioner
9 of Banks and Real Estate.
10     (ff) "Gross delinquency rate" means the quotient
11 determined by dividing (1) the sum of (i) the number of
12 government-insured residential mortgage loans funded or
13 purchased by a licensee in the preceding calendar year that are
14 delinquent and (ii) the number of conventional residential
15 mortgage loans funded or purchased by the licensee in the
16 preceding calendar year that are delinquent by (2) the sum of
17 (i) the number of government-insured residential mortgage
18 loans funded or purchased by the licensee in the preceding
19 calendar year and (ii) the number of conventional residential
20 mortgage loans funded or purchased by the licensee in the
21 preceding calendar year.
22     (gg) "Delinquency rate factor" means the factor set by rule
23 of the Commissioner that is multiplied by the average gross
24 delinquency rate of licensees, determined annually for the
25 immediately preceding calendar year, for the purpose of
26 determining which licensees shall be examined by the

 

 

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1 Commissioner pursuant to subsection (b) of Section 4-8 of this
2 Act.
3     (hh) "Loan originator" means any natural person who, for
4 compensation or in the expectation of compensation, either
5 directly or indirectly makes, offers to make, solicits, places,
6 or negotiates a residential mortgage loan. This definition
7 applies only to Section 7-1 of this Act.
8     (ii) "Confidential supervisory information" means any
9 report of examination, visitation, or investigation prepared
10 by the Commissioner under this Act, any report of examination
11 visitation, or investigation prepared by the state regulatory
12 authority of another state that examines a licensee, any
13 document or record prepared or obtained in connection with or
14 relating to any examination, visitation, or investigation, and
15 any record prepared or obtained by the Commissioner to the
16 extent that the record summarizes or contains information
17 derived from any report, document, or record described in this
18 subsection. "Confidential supervisory information" does not
19 include any information or record routinely prepared by a
20 licensee and maintained in the ordinary course of business or
21 any information or record that is required to be made publicly
22 available pursuant to State or federal law or rule.
23     (jj) "Mortgage loan originator" means an individual who for
24 compensation or gain or in the expectation of compensation or
25 gain:
26         (i) takes a residential mortgage loan application; or

 

 

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1         (ii) offers or negotiates terms of a residential
2     mortgage loan.
3     "Mortgage loan originator" does not include an individual
4 engaged solely as a loan processor or underwriter except as
5 otherwise provided in subsection (d) of Section 7-1A of this
6 Act.
7     "Mortgage loan originator" does not include a person or
8 entity that only performs real estate brokerage activities and
9 is licensed in accordance with the Real Estate License Act of
10 2000, unless the person or entity is compensated by a lender, a
11 mortgage broker, or other mortgage loan originator, or by any
12 agent of that lender, mortgage broker, or other mortgage loan
13 originator.
14     "Mortgage loan originator" does not include a person or
15 entity solely involved in extensions of credit relating to
16 timeshare plans, as that term is defined in Section 101(53D) of
17 Title 11, United States Code.
18     (kk) "Depository institution" has the same meaning as in
19 Section 3 of the Federal Deposit Insurance Act, and includes
20 any credit union.
21     (ll) "Dwelling" means a residential structure or mobile
22 home which contains one to 4 family housing units, or
23 individual units of condominiums or cooperatives.
24     (mm) "Immediate family member" means a spouse, child,
25 sibling, parent, grandparent, or grandchild, and includes
26 step-parents, step-children, step-siblings, or adoptive

 

 

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1 relationships.
2     (nn) "Individual" means a natural person.
3     (oo) "Loan processor or underwriter" means an individual
4 who performs clerical or support duties as an employee at the
5 direction of and subject to the supervision and instruction of
6 a person licensed, or exempt from licensing, under this Act.
7 "Clerical or support duties" includes subsequent to the receipt
8 of an application:
9         (i) the receipt, collection, distribution, and
10     analysis of information common for the processing or
11     underwriting of a residential mortgage loan; and
12         (ii) communicating with a consumer to obtain the
13     information necessary for the processing or underwriting
14     of a loan, to the extent that the communication does not
15     include offering or negotiating loan rates or terms, or
16     counseling consumers about residential mortgage loan rates
17     or terms. An individual engaging solely in loan processor
18     or underwriter activities shall not represent to the
19     public, through advertising or other means of
20     communicating or providing information, including the use
21     of business cards, stationery, brochures, signs, rate
22     lists, or other promotional items, that the individual can
23     or will perform any of the activities of a mortgage loan
24     originator.
25     (pp) "Nationwide Mortgage Licensing System and Registry"
26 means a mortgage licensing system developed and maintained by

 

 

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1 the Conference of State Bank Supervisors and the American
2 Association of Residential Mortgage Regulators for the
3 licensing and registration of licensed mortgage loan
4 originators.
5     (qq) "Nontraditional mortgage product" means any mortgage
6 product other than a 30-year fixed rate mortgage.
7     (rr) "Person" means a natural person, corporation,
8 company, limited liability company, partnership, or
9 association.
10     (ss) "Real estate brokerage activity" means any activity
11 that involves offering or providing real estate brokerage
12 services to the public, including:
13         (1) acting as a real estate agent or real estate broker
14     for a buyer, seller, lessor, or lessee of real property;
15         (2) bringing together parties interested in the sale,
16     purchase, lease, rental, or exchange of real property;
17         (3) negotiating, on behalf of any party, any portion of
18     a contract relating to the sale, purchase, lease, rental,
19     or exchange of real property, other than in connection with
20     providing financing with respect to any such transaction;
21         (4) engaging in any activity for which a person engaged
22     in the activity is required to be registered or licensed as
23     a real estate agent or real estate broker under any
24     applicable law; or
25         (5) offering to engage in any activity, or act in any
26     capacity, described in this subsection (ss).

 

 

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1     (tt) "Registered mortgage loan originator" means any
2 individual that:
3         (1) meets the definition of mortgage loan originator
4     and is an employee of:
5             (A) a depository institution;
6             (B) a subsidiary that is:
7                 (i) owned and controlled by a depository
8             institution; and
9                 (ii) regulated by a federal banking agency; or
10             (C) an institution regulated by the Farm Credit
11         Administration; and
12         (2) is registered with, and maintains a unique
13     identifier through, the Nationwide Mortgage Licensing
14     System and Registry.
15     (uu) "Unique identifier" means a number or other identifier
16 assigned by protocols established by the Nationwide Mortgage
17 Licensing System and Registry.
18     (vv) "Residential mortgage license" means a license issued
19 pursuant to Section 1-3, 2-2, or 2-6 of this Act.
20     (ww) "Mortgage loan originator license" means a license
21 issued pursuant to Section 7-1A, 7-3, or 7-6 of this Act.
22 (Source: P.A. 93-561, eff. 1-1-04; 93-1018, eff. 1-1-05.)
 
23     (205 ILCS 635/2-2)  (from Ch. 17, par. 2322-2)
24     Sec. 2-2. Application process; investigation; fee.
25     (a) The Commissioner shall issue a license upon completion

 

 

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1 of all of the following:
2         (1) The filing of an application for license with the
3     Director or the Nationwide Mortgage Licensing System and
4     Registry as approved by the Director.
5         (2) The filing with the Commissioner of a listing of
6     judgments entered against, and bankruptcy petitions by,
7     the license applicant for the preceding 10 years.
8         (3) The payment, in certified funds, of investigation
9     and application fees, the total of which shall be in an
10     amount equal to $2,700 annually, however, the Commissioner
11     may increase the investigation and application fees by rule
12     as provided in Section 4-11. To comply with the common
13     renewal date and requirements of the Nationwide Mortgage
14     Licensing System and Registry, the term of initial licenses
15     may be extended or shortened with applicable fees prorated
16     or combined accordingly.
17         (4) Except for a broker applying to renew a license,
18     the filing of an audited balance sheet including all
19     footnotes prepared by a certified public accountant in
20     accordance with generally accepted accounting principles
21     and generally accepted auditing principles which evidences
22     that the applicant meets the net worth requirements of
23     Section 3-5.
24         (5) The filing of proof satisfactory to the
25     Commissioner that the applicant, the members thereof if the
26     applicant is a partnership or association, the members or

 

 

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1     managers thereof that retain any authority or
2     responsibility under the operating agreement if the
3     applicant is a limited liability company, or the officers
4     thereof if the applicant is a corporation have 3 years
5     experience preceding application in real estate finance.
6     Instead of this requirement, the applicant and the
7     applicant's officers or members, as applicable, may
8     satisfactorily complete a program of education in real
9     estate finance and fair lending, as approved by the
10     Commissioner, prior to receiving the initial license. The
11     Commissioner shall promulgate rules regarding proof of
12     experience requirements and educational requirements and
13     the satisfactory completion of those requirements. The
14     Commissioner may establish by rule a list of duly licensed
15     professionals and others who may be exempt from this
16     requirement.
17         (6) An investigation of the averments required by
18     Section 2-4, which investigation must allow the
19     Commissioner to issue positive findings stating that the
20     financial responsibility, experience, character, and
21     general fitness of the license applicant and of the members
22     thereof if the license applicant is a partnership or
23     association, of the officers and directors thereof if the
24     license applicant is a corporation, and of the managers and
25     members that retain any authority or responsibility under
26     the operating agreement if the license applicant is a

 

 

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1     limited liability company are such as to command the
2     confidence of the community and to warrant belief that the
3     business will be operated honestly, fairly and efficiently
4     within the purpose of this Act. If the Commissioner shall
5     not so find, he or she shall not issue such license, and he
6     or she shall notify the license applicant of the denial.
7     The Commissioner may impose conditions on a license if the
8 Commissioner determines that the conditions are necessary or
9 appropriate. These conditions shall be imposed in writing and
10 shall continue in effect for the period prescribed by the
11 Commissioner.
12     (b) All licenses shall be issued in duplicate with one copy
13 being transmitted to the license applicant and the second being
14 retained with the Commissioner.
15     Upon receipt of such license, a residential mortgage
16 licensee shall be authorized to engage in the business
17 regulated by this Act. Such license shall remain in full force
18 and effect until it expires without renewal, is surrendered by
19 the licensee or revoked or suspended as hereinafter provided.
20 (Source: P.A. 93-32, eff. 7-1-03; 93-1018, eff. 1-1-05.)
 
21     (205 ILCS 635/2-3)  (from Ch. 17, par. 2322-3)
22     Sec. 2-3. Application form.
23     (a) Application for a residential mortgage license must be
24 made in accordance with Section 2-6 and, if applicable, in
25 accordance with requirements of the Nationwide Mortgage

 

 

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1 Licensing System and Registry. The application shall be in
2 writing, under oath, and on a form obtained from and prescribed
3 by the Commissioner, or may be submitted electronically, with
4 attestation, to the Nationwide Mortgage Licensing System and
5 Registry.
6     (b) The application shall contain the name and complete
7 business and residential address or addresses of the license
8 applicant. If the license applicant is a partnership,
9 association, corporation or other form of business
10 organization, the application shall contain the names and
11 complete business and residential addresses of each member,
12 director and principal officer thereof. Such application shall
13 also include a description of the activities of the license
14 applicant, in such detail and for such periods, as the
15 Commissioner may require, including all of the following:
16         (1) An affirmation of financial solvency noting such
17     capitalization requirements as may be required by the
18     Commissioner, and access to such credit as may be required
19     by the Commissioner.
20         (2) An affirmation that the license applicant or its
21     members, directors or principals as may be appropriate, are
22     at least 18 years of age.
23         (3) Information as to the character, fitness,
24     financial and business responsibility, background,
25     experience, and criminal record of any (i) person, entity,
26     or ultimate equitable owner that owns or controls, directly

 

 

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1     or indirectly, 10% or more of any class of stock of the
2     license applicant; (ii) person, entity, or ultimate
3     equitable owner that is not a depository institution, as
4     defined in Section 1007.50 of the Savings Bank Act, that
5     lends, provides, or infuses, directly or indirectly, in any
6     way, funds to or into a license applicant, in an amount
7     equal to or more than 10% of the license applicant's net
8     worth; (iii) person, entity, or ultimate equitable owner
9     that controls, directly or indirectly, the election of 25%
10     or more of the members of the board of directors of a
11     license applicant; or (iv) person, entity, or ultimate
12     equitable owner that the Commissioner finds influences
13     management of the license applicant.
14         (4) Upon written request by the licensee and
15     notwithstanding the provisions of paragraphs (1), (2), and
16     (3) of this subsection, the Commissioner may permit the
17     licensee to omit all or part of the information required by
18     those paragraphs if, in lieu of the omitted information,
19     the licensee submits an affidavit stating that the
20     information submitted on the licensee's previous renewal
21     application is still true and accurate. The Commissioner
22     may promulgate rules prescribing the form and content of
23     the affidavit that are necessary to accomplish the purposes
24     of this Section.
25         (5) Such other information as required by regulations
26     of the Commissioner.

 

 

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1 (Source: P.A. 89-355, eff. 8-17-95.)
 
2     (205 ILCS 635/2-4)  (from Ch. 17, par. 2322-4)
3     Sec. 2-4. Averments of Licensee. Each application for
4 license or for the renewal of a license shall be accompanied by
5 the following averments stating that the applicant:
6         (a) Will maintain at least one full service office
7     within the State of Illinois pursuant to Section 3-4 of
8     this Act;
9         (b) Will maintain staff reasonably adequate to meet the
10     requirements of Section 3-4 of this Act;
11         (c) Will keep and maintain for 36 months the same
12     written records as required by the federal Equal Credit
13     Opportunity Act, and any other information required by
14     regulations of the Commissioner regarding any home
15     mortgage in the course of the conduct of its residential
16     mortgage business;
17         (d) Will file with the Commissioner or Nationwide
18     Mortgage Licensing System and Registry as applicable, when
19     due, any report or reports which it is required to file
20     under any of the provisions of this Act;
21         (e) Will not engage, whether as principal or agent, in
22     the practice of rejecting residential mortgage
23     applications without reasonable cause, or varying terms or
24     application procedures without reasonable cause, for home
25     mortgages on real estate within any specific geographic

 

 

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1     area from the terms or procedures generally provided by the
2     licensee within other geographic areas of the State;
3         (f) Will not engage in fraudulent home mortgage
4     underwriting practices;
5         (g) Will not make payment, whether directly or
6     indirectly, of any kind to any in house or fee appraiser of
7     any government or private money lending agency with which
8     an application for a home mortgage has been filed for the
9     purpose of influencing the independent judgment of the
10     appraiser with respect to the value of any real estate
11     which is to be covered by such home mortgage;
12         (h) Has filed tax returns (State and Federal) for the
13     past 3 years or filed with the Commissioner an accountant's
14     or attorney's statement as to why no return was filed;
15         (i) Will not engage in any discrimination or redlining
16     activities prohibited by Section 3-8 of this Act;
17         (j) Will not knowingly make any false promises likely
18     to influence or persuade, or pursue a course of
19     misrepresentation and false promises through agents,
20     solicitors, advertising or otherwise;
21         (k) Will not knowingly misrepresent, circumvent or
22     conceal, through whatever subterfuge or device, any of the
23     material particulars or the nature thereof, regarding a
24     transaction to which it is a party to the injury of another
25     party thereto;
26         (l) Will disburse funds in accordance with its

 

 

HB4011 Enrolled - 30 - LRB096 05294 MJR 15360 b

1     agreements;
2         (m) Has not committed a crime against the law of this
3     State, any other state or of the United States, involving
4     moral turpitude, fraudulent or dishonest dealing, and that
5     no final judgment has been entered against it in a civil
6     action upon grounds of fraud, misrepresentation or deceit
7     which has not been previously reported to the Commissioner;
8         (n) Will account or deliver to the owner upon request
9     any person any personal property such as money, fund,
10     deposit, check, draft, mortgage, other document or thing of
11     value, which has come into its possession, and which is not
12     its property, or which it is not in law or equity entitled
13     to retain under the circumstances, at the time which has
14     been agreed upon or is required by law, or, in the absence
15     of a fixed time, upon demand of the person entitled to such
16     accounting and delivery;
17         (o) Has not engaged in any conduct which would be cause
18     for denial of a license;
19         (p) Has not become insolvent;
20         (q) Has not submitted an application for a license
21     under this Act which contains a material misstatement;
22         (r) Has not demonstrated by course of conduct,
23     negligence or incompetence in performing any act for which
24     it is required to hold a license under this Act;
25         (s) Will advise the Commissioner in writing, or the
26     Nationwide Mortgage Licensing System and Registry as

 

 

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1     applicable, of any changes to the information submitted on
2     the most recent application for license within 30 days of
3     said change. The written notice must be signed in the same
4     form as the application for license being amended;
5         (t) Will comply with the provisions of this Act, or
6     with any lawful order, rule or regulation made or issued
7     under the provisions of this Act;
8         (u) Will submit to periodic examination by the
9     Commissioner as required by this Act;
10         (v) Will advise the Commissioner in writing of
11     judgments entered against, and bankruptcy petitions by,
12     the license applicant within 5 days of occurrence;
13         (w) Will advise the Commissioner in writing within 30
14     days of any request made to when the license applicant
15     requests a licensee under this Act to repurchase a loan in
16     a manner that completely and clearly identifies to whom the
17     request was made, the loans involved, and the reason , and
18     the circumstances therefor;
19         (x) Will advise the Commissioner in writing within 30
20     days of any request from any entity when the license
21     applicant is requested by another entity to repurchase a
22     loan in a manner that completely and clearly identifies to
23     whom the request was made, the loans involved, and the
24     reason for the request , and the circumstances therefor;
25         (y) Will at all times act in a manner consistent with
26     subsections (a) and (b) of Section 1-2 of this Act; and

 

 

HB4011 Enrolled - 32 - LRB096 05294 MJR 15360 b

1         (z) Will not knowingly hire or employ a loan originator
2     who is not registered, or mortgage loan originator who is
3     not licensed, with the Commissioner as required under
4     Section 7-1 or Section 7-1A, as applicable, of this Act.
5     A licensee who fails to fulfill obligations of an averment,
6 to comply with averments made, or otherwise violates any of the
7 averments made under this Section shall be subject to the
8 penalties in Section 4-5 of this Act.
9 (Source: P.A. 95-331, eff. 8-21-07.)
 
10     (205 ILCS 635/2-6)  (from Ch. 17, par. 2322-6)
11     Sec. 2-6. License issuance and renewal; fee.
12     (a) Beginning July 1, 2003, licenses shall be renewed every
13 year on the anniversary of the date of issuance of the original
14 license, or the common renewal date of the Nationwide Mortgage
15 Licensing System and Registry as adopted by the Director. To
16 comply with the common renewal date of the Nationwide Mortgage
17 Licensing System and Registry, the term of existing licenses
18 may be extended or shortened with applicable fees prorated
19 accordingly. Properly completed renewal application forms and
20 filing fees must be received by the Commissioner 60 days prior
21 to the renewal date.
22     (b) It shall be the responsibility of each licensee to
23 accomplish renewal of its license; failure of the licensee to
24 receive renewal forms absent a request sent by certified mail
25 for such forms will not waive said responsibility. Failure by a

 

 

HB4011 Enrolled - 33 - LRB096 05294 MJR 15360 b

1 licensee to submit a properly completed renewal application
2 form and fees in a timely fashion, absent a written extension
3 from the Commissioner, will result in the assessment of
4 additional fees, as follows:
5         (1) A fee of $750 will be assessed to the licensee 30
6     days after the proper renewal date and $1,500 each month
7     thereafter, until the license is either renewed or expires
8     pursuant to Section 2-6, subsections (c) and (d), of this
9     Act.
10         (2) Such fee will be assessed without prior notice to
11     the licensee, but will be assessed only in cases wherein
12     the Commissioner has in his or her possession documentation
13     of the licensee's continuing activity for which the
14     unrenewed license was issued.
15     (c) A license which is not renewed by the date required in
16 this Section shall automatically become inactive. No activity
17 regulated by this Act shall be conducted by the licensee when a
18 license becomes inactive. The Commissioner may require the
19 licensee to provide a plan for the disposition of any
20 residential mortgage loans not closed or funded when the
21 license becomes inactive. The Commissioner may allow a licensee
22 with an inactive license to conduct activities regulated by
23 this Act for the sole purpose of assisting borrowers in the
24 closing or funding of loans for which the loan application was
25 taken from a borrower while the license was active. An inactive
26 license may be reactivated by the Commissioner upon payment of

 

 

HB4011 Enrolled - 34 - LRB096 05294 MJR 15360 b

1 the renewal fee, and payment of a reactivation fee equal to the
2 renewal fee.
3     (d) A license which is not renewed within one year of
4 becoming inactive shall expire.
5     (e) A licensee ceasing an activity or activities regulated
6 by this Act and desiring to no longer be licensed shall so
7 inform the Commissioner in writing and, at the same time,
8 convey the license and all other symbols or indicia of
9 licensure. The licensee shall include a plan for the withdrawal
10 from regulated business, including a timetable for the
11 disposition of the business, and comply with the surrender
12 guidelines or requirements of the Director. Upon receipt of
13 such written notice, the Commissioner shall post the
14 cancellation or issue a certified statement canceling the
15 license.
16 (Source: P.A. 93-32, eff. 7-1-03; 93-561, eff. 1-1-04; 93-1018,
17 eff. 1-1-05.)
 
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

 

 

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1 or custody of any money or securities belonging to third
2 parties or whose duties permit him or her regularly to make
3 entries in the books or other records of a licensee, shall,
4 before assuming his or her duties, maintain a fidelity bond in
5 the amount of $100,000 by some fidelity insurance company
6 licensed to do business in this State.
7     (b) Each bond shall be for any loss the licensee may
8 sustain in money or other property through the commission of
9 any dishonest or criminal act or omission by any person
10 required to be bonded, whether committed alone or in concert
11 with another. The bond shall be in the form and amount approved
12 by the Commissioner who may at any time require one or more
13 additional bonds. A true copy of every bond, including all
14 riders and endorsements executed subsequent to the effective
15 date of the bond, shall be filed at all times with the
16 Commissioner. Each bond shall provide that a cancellation
17 thereof shall not become effective unless and until 30 days
18 notice in writing first shall have been given to the
19 Commissioner unless he or she shall have approved the
20 cancellation earlier. If the Commissioner believes the
21 licensee's business is being conducted in an unsafe manner due
22 to the lack of bonds or the inadequacy of bonds, he or she may
23 proceed against the licensee as provided for in Section 4-5.
24     (c) All licensees shall maintain a bond in accordance with
25 this subsection. Each bond shall be for the recovery of
26 expenses, fines, or fees due to or levied by the Commissioner

 

 

HB4011 Enrolled - 36 - LRB096 05294 MJR 15360 b

1 in accordance with this Act. The bond shall be payable when the
2 licensee fails to comply with any provisions of this Act and
3 shall be in the form of a surety or licensure bond in the
4 amount and form as prescribed by the Commissioner pursuant to
5 rules and regulations. The bond shall be payable to the Office
6 of Banks and Real Estate and shall be issued by some insurance
7 company authorized to do business in this State. A copy of the
8 bond, including any and all riders and endorsements executed
9 subsequent to the effective date of the bond, shall be placed
10 on file with the Office of Banks and Real Estate within 10 days
11 of the execution thereof.
12     (d) The Commissioner may promulgate rules with respect to
13 bonding requirements for residential mortgage licensees and
14 their mortgage loan originators that are reasonable and
15 necessary to accomplish the purposes of this Act.
16 (Source: P.A. 89-508, eff. 7-3-96.)
 
17     (205 ILCS 635/3-2)  (from Ch. 17, par. 2323-2)
18     Sec. 3-2. Annual audit.
19     (a) At the licensee's fiscal year-end, but in no case more
20 than 12 months after the last audit conducted pursuant to this
21 Section, except as otherwise provided in this Section, it shall
22 be mandatory for each residential mortgage licensee to cause
23 its books and accounts to be audited by a certified public
24 accountant not connected with such licensee. The books and
25 records of all licensees under this Act shall be maintained on

 

 

HB4011 Enrolled - 37 - LRB096 05294 MJR 15360 b

1 an accrual basis. The audit must be sufficiently comprehensive
2 in scope to permit the expression of an opinion on the
3 financial statements, which must be prepared in accordance with
4 generally accepted accounting principles, and must be
5 performed in accordance with generally accepted auditing
6 standards. Notwithstanding the requirements of this
7 subsection, a licensee that is a first tier subsidiary may
8 submit audited consolidated financial statements of its parent
9 as long as the consolidated statements are supported by
10 consolidating statements. The licensee's chief financial
11 officer shall attest to the licensee's financial statements
12 disclosed in the consolidating statements.
13     (b) As used herein, the term "expression of opinion"
14 includes either (1) an unqualified opinion, (2) a qualified
15 opinion, (3) a disclaimer of opinion, or (4) an adverse
16 opinion.
17     (c) If a qualified or adverse opinion is expressed or if an
18 opinion is disclaimed, the reasons therefore must be fully
19 explained. An opinion, qualified as to a scope limitation,
20 shall not be acceptable.
21     (d) The most recent audit report shall be filed with the
22 Commissioner within 90 days after the end of the licensee's
23 fiscal year, or with the Nationwide Mortgage Licensing System
24 and Registry, if applicable, pursuant to Mortgage Call Report
25 requirements. The report filed with the Commissioner shall be
26 certified by the certified public accountant conducting the

 

 

HB4011 Enrolled - 38 - LRB096 05294 MJR 15360 b

1 audit. The Commissioner may promulgate rules regarding late
2 audit reports.
3     (e) If any licensee required to make an audit shall fail to
4 cause an audit to be made, the Commissioner shall cause the
5 same to be made by a certified public accountant at the
6 licensee's expense. The Commissioner shall select such
7 certified public accountant by advertising for bids or by such
8 other fair and impartial means as he or she establishes by
9 regulation.
10     (f) In lieu of the audit or compilation financial statement
11 required by this Section, a licensee shall submit and the
12 Commissioner may accept any audit made in conformance with the
13 audit requirements of the U.S. Department of Housing and Urban
14 Development.
15     (g) With respect to licensees who solely broker residential
16 mortgage loans as defined in subsection (o) of Section 1-4,
17 instead of the audit required by this Section, the Commissioner
18 may accept compilation financial statements prepared at least
19 every 12 months, and the compilation financial statement must
20 be prepared by an independent certified public accountant
21 licensed under the Illinois Public Accounting Act or by an
22 equivalent state licensing law with full disclosure in
23 accordance with generally accepted accounting principals and
24 must be submitted within 90 days after the end of the
25 licensee's fiscal year, or with the Nationwide Mortgage
26 Licensing System and Registry, if applicable, pursuant to

 

 

HB4011 Enrolled - 39 - LRB096 05294 MJR 15360 b

1 Mortgage Call Report requirements. If a licensee under this
2 Section fails to file a compilation as required, the
3 Commissioner shall cause an audit of the licensee's books and
4 accounts to be made by a certified public accountant at the
5 licensee's expense. The Commissioner shall select the
6 certified public accountant by advertising for bids or by such
7 other fair and impartial means as he or she establishes by
8 rule. A licensee who files false or misleading compilation
9 financial statements is guilty of a business offense and shall
10 be fined not less than $5,000.
11     (h) The workpapers of the certified public accountants
12 employed by each licensee for purposes of this Section are to
13 be made available to the Commissioner or the Commissioner's
14 designee upon request and may be reproduced by the Commissioner
15 or the Commissioner's designee to enable to the Commissioner to
16 carry out the purposes of this Act.
17     (i) Notwithstanding any other provision of this Section, if
18 a licensee relying on subsection (g) of this Section causes its
19 books to be audited at any other time or causes its financial
20 statements to be reviewed, a complete copy of the audited or
21 reviewed financial statements shall be delivered to the
22 Commissioner at the time of the annual license renewal payment
23 following receipt by the licensee of the audited or reviewed
24 financial statements. All workpapers shall be made available to
25 the Commissioner upon request. The financial statements and
26 workpapers may be reproduced by the Commissioner or the

 

 

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1 Commissioner's designee to carry out the purposes of this Act.
2 (Source: P.A. 93-561, eff. 1-1-04; 93-1018, eff. 1-1-05.)
 
3     (205 ILCS 635/3-4)  (from Ch. 17, par. 2323-4)
4     Sec. 3-4. Office and staff within the State.
5     (a) A licensee whose principal place of business is located
6 in the State of Illinois shall maintain at least one full
7 service office with staff reasonably adequate to handle
8 efficiently communications, questions, and all other matters
9 relating to any application for a home mortgage or an existing
10 home mortgage with respect to which such licensee is performing
11 services, regardless of kind, for any borrower or lender, note
12 owner or holder, or for himself or herself while engaged in the
13 residential mortgage business. Offices shall not be located in
14 any real estate, retail, or financial business establishment,
15 unless separated from the other business by a separate and
16 distinct area within the establishment. The location and
17 operation of a full service office shall be in compliance with
18 any applicable zoning laws or ordinances and home office or
19 business regulations. The Director may require a licensee
20 operating from a home or residentially zoned office to provide
21 another approved location that is suitable to conduct an
22 examination under Sections 4-2 and 4-7 of the Act. This
23 subsection (a) does not limit the Director's authority to
24 examine at any other office, facility or location of the
25 licensee as permitted by the Act.

 

 

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1     (b) In lieu of maintaining a full service office in the
2 State of Illinois, and subject to the rules of the Department,
3 a licensee whose principal place of business is located outside
4 the State of Illinois may comply with all of the following
5 requirements:
6         (1) provide, upon the Director's request and notice, an
7     approved location that is suitable to conduct an
8     examination under Sections 4-2 and 4-7 of the Act. This
9     subsection (b) does not limit the Director's authority to
10     examine at any other office, facility or location of the
11     licensee as permitted by the Act.
12         (2) must submit a certified audit as required in
13     Section 3-2 of this Act evidencing a minimum net worth of
14     $150,000 $100,000, which must be maintained at all times,
15     and shall submit and maintain a fidelity bond in the amount
16     of $100,000.
17 (Source: P.A. 93-1018, eff. 1-1-05.)
 
18     (205 ILCS 635/4-1)  (from Ch. 17, par. 2324-1)
19     Sec. 4-1. Commissioner of Banks and Real Estate; functions,
20 powers, and duties. The functions, powers, and duties of the
21 Commissioner of Banks and Real Estate shall include the
22 following:
23     (a) To issue or refuse to issue any license as provided by
24 this Act;
25     (b) To revoke or suspend for cause any license issued under

 

 

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1 this Act;
2     (c) To keep records of all licenses issued under this Act;
3     (d) To receive, consider, investigate, and act upon
4 complaints made by any person in connection with any
5 residential mortgage licensee in this State;
6     (e) To consider and act upon any recommendations from the
7 Residential Mortgage Board;
8     (f) To prescribe the forms of and receive:
9         (1) applications for licenses; and
10         (2) all reports and all books and records required to
11     be made by any licensee under this Act, including annual
12     audited financial statements and annual reports of
13     mortgage activity;
14     (g) To adopt rules and regulations necessary and proper for
15 the administration of this Act;
16     (h) To subpoena documents and witnesses and compel their
17 attendance and production, to administer oaths, and to require
18 the production of any books, papers, or other materials
19 relevant to any inquiry authorized by this Act;
20     (h-1) To issue orders against any person, if the
21 Commissioner has reasonable cause to believe that an unsafe,
22 unsound, or unlawful practice has occurred, is occurring, or is
23 about to occur, if any person has violated, is violating, or is
24 about to violate any law, rule, or written agreement with the
25 Commissioner, or for the purpose of administering the
26 provisions of this Act and any rule adopted in accordance with

 

 

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1 the Act;
2     (h-2) To address any inquiries to any licensee, or the
3 officers thereof, in relation to its activities and conditions,
4 or any other matter connected with its affairs, and it shall be
5 the duty of any licensee or person so addressed, to promptly
6 reply in writing to such inquiries. The Commissioner may also
7 require reports from any licensee at any time the Commissioner
8 may deem desirable;
9     (i) To require information with regard to any license
10 applicant as he or she may deem desirable, with due regard to
11 the paramount interests of the public as to the experience,
12 background, honesty, truthfulness, integrity, and competency
13 of the license applicant as to financial transactions involving
14 primary or subordinate mortgage financing, and where the
15 license applicant is an entity other than an individual, as to
16 the honesty, truthfulness, integrity, and competency of any
17 officer or director of the corporation, association, or other
18 entity, or the members of a partnership;
19     (j) To examine the books and records of every licensee
20 under this Act at intervals as specified in Section 4-2;
21     (k) To enforce provisions of this Act;
22     (l) To levy fees, fines, and charges for services performed
23 in administering this Act; the aggregate of all fees collected
24 by the Commissioner on and after the effective date of this Act
25 shall be paid promptly after receipt of the same, accompanied
26 by a detailed statement thereof, into the Savings and

 

 

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1 Residential Finance Regulatory Fund; the amounts deposited
2 into that Fund shall be used for the ordinary and contingent
3 expenses of the Office of Banks and Real Estate. Nothing in
4 this Act shall prevent continuing the practice of paying
5 expenses involving salaries, retirement, social security, and
6 State-paid insurance of State officers by appropriation from
7 the General Revenue Fund.
8     (m) To appoint examiners, supervisors, experts, and
9 special assistants as needed to effectively and efficiently
10 administer this Act;
11     (n) To conduct hearings for the purpose of:
12         (1) appeals of orders of the Commissioner;
13         (2) suspensions or revocations of licenses, or fining
14     of licensees;
15         (3) investigating:
16             (i) complaints against licensees; or
17             (ii) annual gross delinquency rates; and
18         (4) carrying out the purposes of this Act;
19     (o) To exercise exclusive visitorial power over a licensee
20 unless otherwise authorized by this Act or as vested in the
21 courts, or upon prior consultation with the Commissioner, a
22 foreign residential mortgage regulator with an appropriate
23 supervisory interest in the parent or affiliate of a licensee;
24     (p) To enter into cooperative agreements with state
25 regulatory authorities of other states to provide for
26 examination of corporate offices or branches of those states

 

 

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1 and to accept reports of such examinations;
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; and
8     (r) To impose civil penalties of up to $50 per day against
9 a licensee for failing to respond to a regulatory request or
10 reporting requirement.
11     (s) To enter into agreements in connection with the
12 Nationwide Mortgage Licensing System and Registry.
13 (Source: P.A. 93-1018, eff. 1-1-05.)
 
14     (205 ILCS 635/4-2)  (from Ch. 17, par. 2324-2)
15     Sec. 4-2. Examination; prohibited activities.
16     (a) The business affairs of a licensee under this Act shall
17 be examined for compliance with this Act as often as the
18 Commissioner deems necessary and proper. The Commissioner
19 shall promulgate rules with respect to the frequency and manner
20 of examination. The Commissioner shall appoint a suitable
21 person to perform such examination. The Commissioner and his
22 appointees may examine the entire books, records, documents,
23 and operations of each licensee and its subsidiary, affiliate,
24 or agent, and may examine any of the licensee's or its
25 subsidiary's, affiliate's, or agent's officers, directors,

 

 

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1 employees and agents under oath. For purposes of this Section,
2 "agent" includes service providers such as accountants,
3 closing services providers, providers of outsourced services
4 such as call centers, marketing consultants, and loan
5 processors, even if exempt from licensure under this Act. This
6 Section does not apply to an attorney's privileged work product
7 or communications.
8     (b) The Commissioner shall prepare a sufficiently detailed
9 report of each licensee's examination, shall issue a copy of
10 such report to each licensee's principals, officers, or
11 directors and shall take appropriate steps to ensure correction
12 of violations of this Act.
13     (c) Affiliates of a licensee shall be subject to
14 examination by the Commissioner on the same terms as the
15 licensee, but only when reports from, or examination of a
16 licensee provides for documented evidence of unlawful activity
17 between a licensee and affiliate benefiting, affecting or
18 deriving from the activities regulated by this Act.
19     (d) The expenses of any examination of the licensee and
20 affiliates shall be borne by the licensee and assessed by the
21 Commissioner as established by regulation.
22     (e) Upon completion of the examination, the Commissioner
23 shall issue a report to the licensee. All confidential
24 supervisory information, including the examination report and
25 the work papers of the report, shall belong to the
26 Commissioner's office and may not be disclosed to anyone other

 

 

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1 than the licensee, law enforcement officials or other
2 regulatory agencies that have an appropriate regulatory
3 interest as determined by the Commissioner, or to a party
4 presenting a lawful subpoena to the Office of the Commissioner.
5 The Commissioner may immediately appeal to the court of
6 jurisdiction the disclosure of such confidential supervisory
7 information and seek a stay of the subpoena pending the outcome
8 of the appeal. Reports required of licensees by the
9 Commissioner under this Act and results of examinations
10 performed by the Commissioner under this Act shall be the
11 property of only the Commissioner, but may be shared with the
12 licensee. Access under this Act to the books and records of
13 each licensee shall be limited to the Commissioner and his
14 agents as provided in this Act and to the licensee and its
15 authorized agents and designees. No other person shall have
16 access to the books and records of a licensee under this Act.
17 Any person upon whom a demand for production of confidential
18 supervisory information is made, whether by subpoena, order, or
19 other judicial or administrative process, must withhold
20 production of the confidential supervisory information and
21 must notify the Commissioner of the demand, at which time the
22 Commissioner is authorized to intervene for the purpose of
23 enforcing the limitations of this Section or seeking the
24 withdrawal or termination of the attempt to compel production
25 of the confidential supervisory information. The Commissioner
26 may impose any conditions and limitations on the disclosure of

 

 

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1 confidential supervisory information that are necessary to
2 protect the confidentiality of such information. Except as
3 authorized by the Commissioner, no person obtaining access to
4 confidential supervisory information may make a copy of the
5 confidential supervisory information. The Commissioner may
6 condition a decision to disclose confidential supervisory
7 information on entry of a protective order by the court or
8 administrative tribunal presiding in the particular case or on
9 a written agreement of confidentiality. In a case in which a
10 protective order or agreement has already been entered between
11 parties other than the Commissioner, the Commissioner may
12 nevertheless condition approval for release of confidential
13 supervisory information upon the inclusion of additional or
14 amended provisions in the protective order. The Commissioner
15 may authorize a party who obtained the records for use in one
16 case to provide them to another party in another case, subject
17 to any conditions that the Commissioner may impose on either or
18 both parties. The requestor shall promptly notify other parties
19 to a case of the release of confidential supervisory
20 information obtained and, upon entry of a protective order,
21 shall provide copies of confidential supervisory information
22 to the other parties.
23     (f) The Commissioner, deputy commissioners, and employees
24 of the Office of Banks and Real Estate shall be subject to the
25 restrictions provided in Section 2.5 of the Office of Banks and
26 Real Estate Act including, without limitation, the

 

 

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1 restrictions on (i) owning shares of stock or holding any other
2 equity interest in an entity regulated under this Act or in any
3 corporation or company that owns or controls an entity
4 regulated under this Act; (ii) being an officer, director,
5 employee, or agent of an entity regulated under this Act; and
6 (iii) obtaining a loan or accepting a gratuity from an entity
7 regulated under this Act.
8     (g) After the initial examination for those licensees whose
9 only mortgage activity is servicing fewer than 1,000 Illinois
10 residential loans, the examination required in subsection (a)
11 may be waived upon submission of a letter from the licensee's
12 independent certified auditor that the licensee serviced fewer
13 than 1,000 Illinois residential loans during the year in which
14 the audit was performed.
15 (Source: P.A. 93-1018, eff. 1-1-05.)
 
16     (205 ILCS 635/4-5)  (from Ch. 17, par. 2324-5)
17     Sec. 4-5. Suspension, revocation of licenses; fines.
18     (a) Upon written notice to a licensee, the Commissioner may
19 suspend or revoke any license issued pursuant to this Act if he
20 or she shall make a finding of one or more of the following in
21 the notice that:
22         (1) Through separate acts or an act or a course of
23     conduct, the licensee has violated any provisions of this
24     Act, any rule or regulation promulgated by the Commissioner
25     or of any other law, rule or regulation of this State or

 

 

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1     the United States.
2         (2) Any fact or condition exists which, if it had
3     existed at the time of the original application for such
4     license would have warranted the Commissioner in refusing
5     originally to issue such license.
6         (3) If a licensee is other than an individual, any
7     ultimate equitable owner, officer, director, or member of
8     the licensed partnership, association, corporation, or
9     other entity has so acted or failed to act as would be
10     cause for suspending or revoking a license to that party as
11     an individual.
12     (b) No license shall be suspended or revoked, except as
13 provided in this Section, nor shall any licensee be fined
14 without notice of his or her right to a hearing as provided in
15 Section 4-12 of this Act.
16     (c) The Commissioner, on good cause shown that an emergency
17 exists, may suspend any license for a period not exceeding 180
18 days, pending investigation. Upon a showing that a licensee has
19 failed to meet the experience or educational requirements of
20 Section 2-2 or the requirements of subsection (g) of Section
21 3-2, the Commissioner shall suspend, prior to hearing as
22 provided in Section 4-12, the license until those requirements
23 have been met.
24     (d) The provisions of subsection (e) of Section 2-6 of this
25 Act shall not affect a licensee's civil or criminal liability
26 for acts committed prior to surrender of a license.

 

 

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1     (e) No revocation, suspension or surrender of any license
2 shall impair or affect the obligation of any pre-existing
3 lawful contract between the licensee and any person.
4     (f) Every license issued under this Act shall remain in
5 force and effect until the same shall have expired without
6 renewal, have been surrendered, revoked or suspended in
7 accordance with the provisions of this Act, but the
8 Commissioner shall have authority to reinstate a suspended
9 license or to issue a new license to a licensee whose license
10 shall have been revoked if no fact or condition then exists
11 which would have warranted the Commissioner in refusing
12 originally to issue such license under this Act.
13     (g) Whenever the Commissioner shall revoke or suspend a
14 license issued pursuant to this Act or fine a licensee under
15 this Act, he or she shall forthwith execute in duplicate a
16 written order to that effect. The Commissioner shall publish
17 notice of such order in the Illinois Register and post notice
18 of the order on an agency Internet site maintained by the
19 Commissioner or on the Nationwide Mortgage Licensing System and
20 Registry and shall forthwith serve a copy of such order upon
21 the licensee. Any such order may be reviewed in the manner
22 provided by Section 4-12 of this Act.
23     (h) When the Commissioner finds any person in violation of
24 the grounds set forth in subsection (i), he or she may enter an
25 order imposing one or more of the following penalties:
26         (1) Revocation of license;

 

 

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1         (2) Suspension of a license subject to reinstatement
2     upon satisfying all reasonable conditions the Commissioner
3     may specify;
4         (3) Placement of the licensee or applicant on probation
5     for a period of time and subject to all reasonable
6     conditions as the Commissioner may specify;
7         (4) Issuance of a reprimand;
8         (5) Imposition of a fine not to exceed $25,000 for each
9     count of separate offense; and
10         (6) Denial of a license.
11     (i) The following acts shall constitute grounds for which
12 the disciplinary actions specified in subsection (h) above may
13 be taken:
14         (1) Being convicted or found guilty, regardless of
15     pendency of an appeal, of a crime in any jurisdiction which
16     involves fraud, dishonest dealing, or any other act of
17     moral turpitude;
18         (2) Fraud, misrepresentation, deceit or negligence in
19     any mortgage financing transaction;
20         (3) A material or intentional misstatement of fact on
21     an initial or renewal application;
22         (4) Failure to follow the Commissioner's regulations
23     with respect to placement of funds in escrow accounts;
24         (5) Insolvency or filing under any provision of the
25     Bankruptcy Code as a debtor;
26         (6) Failure to account or deliver to any person any

 

 

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1     property such as any money, fund, deposit, check, draft,
2     mortgage, or other document or thing of value, which has
3     come into his or her hands and which is not his or her
4     property or which he or she is not in law or equity
5     entitled to retain, under the circumstances and at the time
6     which has been agreed upon or is required by law or, in the
7     absence of a fixed time, upon demand of the person entitled
8     to such accounting and delivery;
9         (7) Failure to disburse funds in accordance with
10     agreements;
11         (8) Any misuse, misapplication, or misappropriation of
12     trust funds or escrow funds;
13         (9) Having a license, or the equivalent, to practice
14     any profession or occupation revoked, suspended, or
15     otherwise acted against, including the denial of licensure
16     by a licensing authority of this State or another state,
17     territory or country for fraud, dishonest dealing or any
18     other act of moral turpitude;
19         (10) Failure to issue a satisfaction of mortgage when
20     the residential mortgage has been executed and proceeds
21     were not disbursed to the benefit of the mortgagor and when
22     the mortgagor has fully paid licensee's costs and
23     commission;
24         (11) Failure to comply with any order of the
25     Commissioner or rule made or issued under the provisions of
26     this Act;

 

 

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1         (12) Engaging in activities regulated by this Act
2     without a current, active license unless specifically
3     exempted by this Act;
4         (13) Failure to pay in a timely manner any fee, charge
5     or fine under this Act;
6         (14) Failure to maintain, preserve, and keep available
7     for examination, all books, accounts or other documents
8     required by the provisions of this Act and the rules of the
9     Commissioner;
10         (15) Refusing, obstructing, evading, or unreasonably
11     delaying an investigation, information request, or
12     examination authorized under this Act, or refusing,
13     obstructing, evading, or unreasonably delaying compliance
14     with the Director's Refusal to permit an investigation or
15     examination of the licensee's or its affiliates' books and
16     records or refusal to comply with the Commissioner's
17     subpoena or subpoena duces tecum;
18         (16) A pattern of substantially underestimating the
19     maximum closing costs;
20         (17) Failure to comply with or violation of any
21     provision of this Act.
22     (j) A licensee shall be subject to the disciplinary actions
23 specified in this Act for violations of subsection (i) by any
24 officer, director, shareholder, joint venture, partner,
25 ultimate equitable owner, or employee of the licensee.
26     (k) Such licensee shall be subject to suspension or

 

 

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1 revocation for unauthorized employee actions only if there is a
2 pattern of repeated violations by employees or the licensee has
3 knowledge of the violations, or there is substantial harm to a
4 consumer.
5     (l) Procedure for surrender of license:
6         (1) The Commissioner may, after 10 days notice by
7     certified mail to the licensee at the address set forth on
8     the license, stating the contemplated action and in general
9     the grounds therefor and the date, time and place of a
10     hearing thereon, and after providing the licensee with a
11     reasonable opportunity to be heard prior to such action,
12     fine such licensee an amount not exceeding $25,000 per
13     violation, or revoke or suspend any license issued
14     hereunder if he or she finds that:
15             (i) The licensee has failed to comply with any
16         provision of this Act or any order, decision, finding,
17         rule, regulation or direction of the Commissioner
18         lawfully made pursuant to the authority of this Act; or
19             (ii) Any fact or condition exists which, if it had
20         existed at the time of the original application for the
21         license, clearly would have warranted the Commissioner
22         in refusing to issue the license.
23         (2) Any licensee may submit application to surrender a
24     license by delivering to the Commissioner written notice
25     that he or she thereby surrenders such license, but upon
26     the Director approving the surrender, it shall not affect

 

 

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1     the licensee's civil or criminal liability for acts
2     committed prior to surrender or entitle the licensee to a
3     return of any part of the license fee.
4 (Source: P.A. 93-561, eff. 1-1-04; 93-1018, eff. 1-1-05.)
 
5     (205 ILCS 635/4-7 new)
6     Sec. 4-7. Additional investigation and examination
7 authority. In addition to any authority allowed under this Act,
8 the Director shall have the authority to conduct investigations
9 and examinations as follows:
10     (a) For purposes of initial licensing, license renewal,
11 license suspension, license conditioning, license revocation
12 or termination, or general or specific inquiry or investigation
13 to determine compliance with this Act, the Commissioner shall
14 have the authority to access, receive, and use any books,
15 accounts, records, files, documents, information, or evidence
16 including, but not limited to, the following:
17         (1) criminal, civil, and administrative history
18     information, including nonconviction data as specified in
19     the Criminal Code of 1961;
20         (2) personal history and experience information,
21     including independent credit reports obtained from a
22     consumer reporting agency described in Section 603(p) of
23     the federal Fair Credit Reporting Act; and
24         (3) any other documents, information, or evidence the
25     Commissioner deems relevant to the inquiry or

 

 

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1     investigation regardless of the location, possession,
2     control, or custody of the documents, information, or
3     evidence.
4     (b) For the purposes of investigating violations or
5 complaints arising under this Act, or for the purposes of
6 examination, the Commissioner may review, investigate, or
7 examine any licensee, individual, or person subject to this
8 Act, as often as necessary in order to carry out the purposes
9 of this Act. The Commissioner may direct, subpoena, or order
10 the attendance of and examine under oath all persons whose
11 testimony may be required about the loans or the business or
12 subject matter of any such examination or investigation, and
13 may direct, subpoena, or order the person to produce books,
14 accounts, records, files, and any other documents the
15 Commissioner deems relevant to the inquiry.
16     (c) Each licensee, individual, or person subject to this
17 Act shall make available to the Commissioner upon request the
18 books and records relating to the operations of such licensee,
19 individual, or person subject to this Act. The Commissioner
20 shall have access to such books and records and interview the
21 officers, principals, mortgage loan originators, employees,
22 independent contractors, agents, and customers of the
23 licensee, individual, or person subject to this Act concerning
24 their business.
25     (d) Each licensee, individual, or person subject to this
26 Act shall make or compile reports or prepare other information

 

 

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1 as directed by the Commissioner in order to carry out the
2 purposes of this Section including, but not limited to:
3         (1) accounting compilations;
4         (2) information lists and data concerning loan
5     transactions in a format prescribed by the Commissioner; or
6         (3) other information deemed necessary to carry out the
7     purposes of this Section.
8     (e) In making any examination or investigation authorized
9 by this Act, the Commissioner may control access to any
10 documents and records of the licensee or person under
11 examination or investigation. The Commissioner may take
12 possession of the documents and records or place a person in
13 exclusive charge of the documents and records in the place
14 where they are usually kept. During the period of control, no
15 individual or person shall remove or attempt to remove any of
16 the documents and records except pursuant to a court order or
17 with the consent of the Commissioner. Unless the Commissioner
18 has reasonable grounds to believe the documents or records of
19 the licensee have been, or are at risk of being altered or
20 destroyed for purposes of concealing a violation of this Act,
21 the licensee or owner of the documents and records shall have
22 access to the documents or records as necessary to conduct its
23 ordinary business affairs.
24     (f) In order to carry out the purposes of this Section, the
25 Commissioner may:
26         (1) retain attorneys, accountants, or other

 

 

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1     professionals and specialists as examiners, auditors, or
2     investigators to conduct or assist in the conduct of
3     examinations or investigations;
4         (2) enter into agreements or relationships with other
5     government officials or regulatory associations in order
6     to improve efficiencies and reduce regulatory burden by
7     sharing resources, standardized or uniform methods or
8     procedures, and documents, records, information or
9     evidence obtained under this Section;
10         (3) use, hire, contract, or employ public or privately
11     available analytical systems, methods, or software to
12     examine or investigate the licensee, individual, or person
13     subject to this Act;
14         (4) accept and rely on examination or investigation
15     reports made by other government officials, within or
16     without this State; or
17         (5) accept audit reports made by an independent
18     certified public accountant for the licensee, individual,
19     or person subject to this Act in the course of that part of
20     the examination covering the same general subject matter as
21     the audit and may incorporate the audit report in the
22     report of the examination, report of investigation, or
23     other writing of the Commissioner.
24     (g) The authority of this Section shall remain in effect,
25 whether such a licensee, individual, or person subject to this
26 Act acts or claims to act under any licensing or registration

 

 

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1 law of this State, or claims to act without the authority.
2     (h) No licensee, individual, or person subject to
3 investigation or examination under this Section may knowingly
4 withhold, abstract, remove, mutilate, destroy, or secrete any
5 books, records, computer records, or other information.
 
6     (205 ILCS 635/4-8.1A new)
7     Sec. 4-8.1A. Confidentiality.
8     (a) In order to promote more effective regulation and
9 reduce regulatory burden through supervisory information
10 sharing, except as otherwise provided in federal Public Law
11 110-289, Section 1512, the requirements under any federal law
12 or state law regarding the privacy or confidentiality of any
13 information or material provided to the Nationwide Mortgage
14 Licensing System and Registry, and any privilege arising under
15 federal or state law, including the rules of any federal or
16 state court, with respect to such information or material,
17 shall continue to apply to information or material after the
18 information or material has been disclosed to the Nationwide
19 Mortgage Licensing System and Registry. The information and
20 material may be shared with all state and federal regulatory
21 officials with mortgage industry oversight authority without
22 the loss of privilege or the loss of confidentiality
23 protections provided by federal law or state law.
24     (b) In order to promote more effective regulation and
25 reduce regulatory burden through supervisory information

 

 

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1 sharing, the Director is authorized to enter agreements or
2 sharing arrangements with other governmental agencies, the
3 Conference of State Bank Supervisors, the American Association
4 of Residential Mortgage Regulators or other associations
5 representing governmental agencies as established by rule,
6 regulation or order of the Director. The sharing of
7 confidential supervisory information or any information or
8 material described in subsection (a) of this Section pursuant
9 to an agreement or sharing arrangement shall not result in the
10 loss of privilege or the loss of confidentiality protections
11 provided by federal law or state law.
12     (c) In order to promote more effective regulation and
13 reduce regulatory burden through supervisory information
14 sharing, information or material that is subject to a privilege
15 or confidentiality under subsection (a) of this Section shall
16 not be subject to the following:
17         (1) disclosure under any State law governing the
18     disclosure to the public of information held by an officer
19     or an agency of the State; or
20         (2) subpoena or discovery, or admission into evidence,
21     in any private civil action or administrative process,
22     unless with respect to any privilege held by the Nationwide
23     Mortgage Licensing System and Registry with respect to the
24     information or material, the person to whom such
25     information or material pertains waives, in whole or in
26     part, in the discretion of that person, that privilege.

 

 

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1     (d) In order to promote more effective regulation and
2 reduce regulatory burden through supervisory information
3 sharing, other law relating to the disclosure of confidential
4 supervisory information or any information or material
5 described in subsection (a) of this Section that is
6 inconsistent with subsection (a) of this Section shall be
7 superseded by the requirements of this Section to the extent
8 the other law provides less confidentiality or a weaker
9 privilege.
10     (e) In order to promote more effective regulation and
11 reduce regulatory burden through supervisory information
12 sharing, this Section shall not apply to the employment history
13 of a mortgage loan originator, and the record of publicly
14 adjudicated disciplinary and enforcement actions against a
15 mortgage loan originator.
 
16     (205 ILCS 635/4-8.3)
17     Sec. 4-8.3. Annual report of mortgage brokerage and
18 servicing activity. On or before March 1 of each year or the
19 date selected for Mortgage Call Reports under Section 4-9.1 of
20 this Act, each licensee, except residential mortgage brokers,
21 shall file a report with the Commissioner that shall disclose
22 such information as the Commissioner requires. Exempt entities
23 as defined in subsection (d) of Section 1-4 shall not file the
24 annual report of mortgage and servicing activity required by
25 this Section.

 

 

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1 (Source: P.A. 93-1018, eff. 1-1-05.)
 
2     (205 ILCS 635/4-9.1 new)
3     Sec. 4-9.1. Mortgage call reports. Each residential
4 mortgage licensee shall submit to the Nationwide Mortgage
5 Licensing System and Registry reports of condition, which shall
6 be in the form and shall contain the information that the
7 Nationwide Mortgage Licensing System and Registry may require.
 
8     (205 ILCS 635/Art. VII heading)
9
ARTICLE VII.
10
MORTGAGE LOAN ORIGINATOR LICENSE REQUIRED
11
REGISTRATION OF LOAN ORIGINATORS

 
12     (205 ILCS 635/7-1)
13     Sec. 7-1. Registration required; rules and regulations.
14 Beginning 6 months after the effective date of this amendatory
15 Act of the 93rd General Assembly, it is unlawful for any
16 natural person to act or assume to act as a loan originator, as
17 defined in subsection (hh) of Section 1-4, without being
18 registered with the Commissioner unless the natural person is
19 exempt under items (1) and (1.5) of subsection (d) of Section
20 1-4 of this Act. The Commissioner shall promulgate rules
21 prescribing the criteria for the registration and regulation of
22 loan originators, including but not limited to,
23 qualifications, fees, examination, education, supervision, and

 

 

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1 enforcement. This Section shall not be effective on or after
2 (1) the operability date of January 1, 2011 or (2) the
3 operability date selected pursuant to Section 7-1A of this Act
4 for a mortgage loan originator license; provided, however, that
5 a violation of this Section committed before the operability
6 date remains subject to penalties authorized by this Act.
7 (Source: P.A. 93-561, eff. 1-1-04.)
 
8     (205 ILCS 635/7-1A new)
9     Sec. 7-1A. Mortgage loan originator license.
10     (a) It is unlawful for any individual to act or assume to
11 act as a mortgage loan originator, as defined in subsection
12 (jj) of Section 1-4 of this Act, without obtaining a license
13 from the Director, unless the individual is exempt under
14 subsection (c) of this Section. Each licensed mortgage loan
15 originator must register with and maintain a valid unique
16 identifier issued by the Nationwide Mortgage Licensing System
17 and Registry.
18     (b) In order to facilitate an orderly transition to
19 licensing and minimize disruption in the mortgage marketplace,
20 the operability date for subsection (a) of this Section shall
21 be as provided in this subsection (b). For this purpose, the
22 Director may require submission of licensing information to the
23 Nationwide Mortgage Licensing System and Registry prior to the
24 operability dates designated by the Director pursuant to items
25 (1) and (2) of this subsection (b).

 

 

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1         (1) For all individuals other than individuals
2     described in item (2) of this subsection (b), the
3     operability date as designated by the Director shall be no
4     later than July 31, 2010, or any date approved by the
5     Secretary of the U.S. Department of Housing and Urban
6     Development, pursuant to the authority granted under
7     federal Public Law 110-289, Section 1508.
8         (2) For all individuals registered as loan originators
9     as of the effective date of this amendatory Act of the 96th
10     General Assembly, the operability date as designated by the
11     Director shall be no later than January 1, 2011, or any
12     date approved by the Secretary of the U.S. Department of
13     Housing and Urban Development, pursuant to the authority
14     granted under Public Law 110-289, Section 1508.
15         (3) For all individuals described in item (1) or (2) of
16     this subsection (b) who are loss mitigation specialists
17     employed by servicers, the operability date shall be July
18     31, 2011, or any date approved by the Secretary of the U.S.
19     Department of Housing and Urban Development pursuant to
20     authority granted under Public Law 110-289, Section 1508.
21     (c) The following, when engaged in the following
22 activities, are exempt from this Act:
23         (1) Registered mortgage loan originators, when acting
24     for an entity described in subsection (tt) of Section 1-4.
25         (2) Any individual who offers or negotiates terms of a
26     residential mortgage loan with or on behalf of an immediate

 

 

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1     family member of the individual.
2         (3) Any individual who offers or negotiates terms of a
3     residential mortgage loan secured by a dwelling that served
4     as the individual's residence.
5         (4) A licensed attorney who negotiates the terms of a
6     residential mortgage loan on behalf of a client as an
7     ancillary matter to the attorney's representation of the
8     client, unless the attorney is compensated by a lender, a
9     mortgage broker, or other mortgage loan originator or by
10     any agent of a lender, mortgage broker, or other mortgage
11     loan originator.
12     (d) A loan processor or underwriter who is an independent
13 contractor may not engage in the activities of a loan processor
14 or underwriter unless he or she obtains and maintains a license
15 under subsection (a) of this Section. Each independent
16 contractor loan processor or underwriter licensed as a mortgage
17 loan originator must have and maintain a valid unique
18 identifier issued by the Nationwide Mortgage Licensing System
19 and Registry.
20     (e) For the purposes of implementing an orderly and
21 efficient licensing process, the Director may establish
22 licensing rules or regulations and interim procedures for
23 licensing and acceptance of applications. For previously
24 registered or licensed individuals, the Director may establish
25 expedited review and licensing procedures.
 

 

 

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1     (205 ILCS 635/7-2 new)
2     Sec. 7-2. State license application and issuance.
3     (a) Applicants for a license shall apply in a form
4 prescribed by the Director. Each form shall contain content as
5 set forth by rule, regulation, instruction, or procedure of the
6 Director and may be changed or updated as necessary by the
7 Director in order to carry out the purposes of this Act.
8     (b) In order to fulfill the purposes of this Act, the
9 Director is authorized to establish relationships or contracts
10 with the Nationwide Mortgage Licensing System and Registry or
11 other entities designated by the Nationwide Mortgage Licensing
12 System and Registry to collect and maintain records and process
13 transaction fees or other fees related to licensees or other
14 persons subject to this Act.
15     (c) In connection with an application for licensing as a
16 mortgage loan originator, the applicant shall, at a minimum,
17 furnish to the Nationwide Mortgage Licensing System and
18 Registry information concerning the applicant's identity,
19 including the following:
20         (1) Fingerprints for submission to the Federal Bureau
21     of Investigation, and any governmental agency or entity
22     authorized to receive such information for a state,
23     national and international criminal history background
24     check.
25         (2) Personal history and experience in a form
26     prescribed by the Nationwide Mortgage Licensing System and

 

 

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1     Registry, including the submission of authorization for
2     the Nationwide Mortgage Licensing System and Registry and
3     the Director to obtain:
4             (A) an independent credit report obtained from a
5         consumer reporting agency described in Section 603(p)
6         of the Fair Credit Reporting Act; and
7             (B) information related to any administrative,
8     civil, or criminal findings by any governmental
9     jurisdiction.
10     (d) For the purpose of this Section, and in order to reduce
11 the points of contact which the Federal Bureau of Investigation
12 may have to maintain for purposes of subsection (c) of this
13 Section, the Director may use the Nationwide Mortgage Licensing
14 System and Registry as a channeling agent for requesting
15 information from and distributing information to the
16 Department of Justice or any governmental agency.
17     (e) For the purposes of this Section and in order to reduce
18 the points of contact which the Director may have to maintain
19 for purposes of item (2) of subsection (c) of this Section, the
20 Director may use the Nationwide Mortgage Licensing System and
21 Registry as a channeling agent for requesting and distributing
22 information to and from any source so directed by the Director.
 
23     (205 ILCS 635/7-3 new)
24     Sec. 7-3. Issuance of license. The Director shall not issue
25 a mortgage loan originator license unless the Director makes at

 

 

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1 a minimum the following findings:
2     (1) The applicant has never had a mortgage loan originator
3 license revoked in any governmental jurisdiction, except that a
4 subsequent formal vacation of such revocation shall not be
5 deemed a revocation.
6     (2) The applicant has not been convicted of, or pled guilty
7 or nolo contendere to, a felony in a domestic, foreign, or
8 military court:
9         (A) during the 7-year period preceding the date of the
10     application for licensing and registration; or
11         (B) at any time preceding such date of application, if
12     such felony involved an act of fraud, dishonesty, or a
13     breach of trust, or money laundering;
14 provided that any pardon of a conviction shall not be a
15 conviction for purposes of this item (2).
16     (3) The applicant has demonstrated financial
17 responsibility, character, and general fitness so as to command
18 the confidence of the community and to warrant a determination
19 that the mortgage loan originator will operate honestly,
20 fairly, and efficiently within the purposes of this Act. For
21 purposes of this item (3) a person has shown that he or she is
22 not financially responsible when he or she has shown a
23 disregard for the management of his or her own financial
24 condition. A determination that an individual has not shown
25 financial responsibility may include, but is not limited to,
26 consideration of:

 

 

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1         (A) current outstanding judgments, except judgments
2     solely as a result of medical expenses;
3         (B) current outstanding tax liens or other government
4     liens and filings, educational loan defaults, and
5     non-payment of child support;
6         (C) foreclosures within the past 3 years;
7         (D) a pattern of seriously delinquent accounts within
8     the past 3 years; and
9         (E) an independent credit report obtained under
10     Section 7-2(c)(2)of the Act; provided that, a credit score
11     may not be the sole basis for determining that an
12     individual has not shown financial responsibility;
13     provided further that, the credit report may be the sole
14     basis for determining that an individual has not shown
15     financial responsibility.
16     (4) The applicant has completed the pre-licensing
17 education requirement described in Section 7-4 of this Act.
18     (5) The applicant has passed a written test that meets the
19 test requirement described in Section 7-5 of this Act.
20     (6) The applicant has met the surety bond requirement as
21 required pursuant to Section 7-12 of this Act.
 
22     (205 ILCS 635/7-4 new)
23     Sec. 7-4. Pre-licensing and education of mortgage loan
24 originators.
25     (a) In order to meet the pre-licensing education

 

 

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1 requirement referred to in item (4) of Section 7-3 of this Act
2 an individual shall complete at least 20 hours of education
3 approved in accordance with subsection (b) of this Section,
4 which shall include at least:
5         (1) 3 hours of Federal law and regulations;
6         (2) 3 hours of ethics, which shall include instruction
7     on fraud, consumer protection, and fair lending issues; and
8         (3) 2 hours of training related to lending standards
9     for the nontraditional mortgage product marketplace.
10     (b) For purposes of subsection (a) of this Section,
11 pre-licensing education courses shall be reviewed and approved
12 by the Nationwide Mortgage Licensing System and Registry based
13 upon reasonable standards. Review and approval of a
14 pre-licensing education course shall include review and
15 approval of the course provider.
16     (c) Nothing in this Section shall preclude any
17 pre-licensing education course, as approved by the Nationwide
18 Mortgage Licensing System and Registry, that is provided by the
19 employer of the applicant or an entity which is affiliated with
20 the applicant by an agency contract, or any subsidiary or
21 affiliate of such an employer or entity.
22     (d) Pre-licensing education may be offered in a classroom,
23 online, or by any other means approved by the Nationwide
24 Mortgage Licensing System and Registry.
25     (e) The pre-licensing education requirements approved by
26 the Nationwide Mortgage Licensing System and Registry for the

 

 

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1 subjects listed in items (1) through (3) of subsection (a) for
2 any state shall be accepted as credit towards completion of
3 pre-licensing education requirements in Illinois.
4     (f) An individual previously registered under this Act who
5 is applying to be licensed after the effective date of this
6 amendatory Act of the 96th General Assembly must prove that he
7 or she has completed all of the continuing education
8 requirements for the year in which the registration or license
9 was last held.
 
10     (205 ILCS 635/7-5 new)
11     Sec. 7-5. Testing of mortgage loan originators.
12     (a) In order to meet the written test requirement referred
13 to in item (5) of Section 7-3, an individual shall pass, in
14 accordance with the standards established under this
15 subsection (a), a qualified written test developed by the
16 Nationwide Mortgage Licensing System and Registry and
17 administered by a test provider approved by the Nationwide
18 Mortgage Licensing System and Registry based upon reasonable
19 standards.
20     (b) A written test shall not be treated as a qualified
21 written test for purposes of subsection (a) of this Section
22 unless the test adequately measures the applicant's knowledge
23 and comprehension in appropriate subject areas, including:
24         (1) ethics;
25         (2) federal law and regulation pertaining to mortgage

 

 

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1     origination;
2         (3) State law and regulation pertaining to mortgage
3     origination; and
4         (4) federal and State law and regulation, including
5     instruction on fraud, consumer protection, the
6     nontraditional mortgage marketplace, and fair lending
7     issues.
8     (c) Nothing in this Section shall prohibit a test provider
9 approved by the Nationwide Mortgage Licensing System and
10 Registry from providing a test at the location of the employer
11 of the applicant or the location of any subsidiary or affiliate
12 of the employer of the applicant, or the location of any entity
13 with which the applicant holds an exclusive arrangement to
14 conduct the business of a mortgage loan originator.
15     (d) An individual shall not be considered to have passed a
16 qualified written test unless the individual achieves a test
17 score of not less than 75% correct answers to questions.
18     An individual may retake a test 3 consecutive times with
19 each consecutive taking occurring at least 30 days after the
20 preceding test.
21     After failing 3 consecutive tests, an individual shall wait
22 at least 6 months before taking the test again.
23     A licensed mortgage loan originator who fails to maintain a
24 valid license for a period of 5 years or longer shall retake
25 the test, not taking into account any time during which such
26 individual is a registered mortgage loan originator.
 

 

 

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1     (205 ILCS 635/7-6 new)
2     Sec. 7-6. Standards for license renewal.
3     (a) The minimum standards for license renewal for mortgage
4 loan originators shall include the following:
5         (1) The mortgage loan originator continues to meet the
6     minimum standards for license issuance under Section 7-3.
7         (2) The mortgage loan originator has satisfied the
8     annual continuing education requirements described in
9     Section 7-7.
10         (3) The mortgage loan originator has paid all required
11     fees for renewal of the license.
12     (b) The license of a mortgage loan originator failing to
13 satisfy the minimum standards for license renewal shall expire.
14 The Director may adopt procedures for the reinstatement of
15 expired licenses consistent with the standards established by
16 the Nationwide Mortgage Licensing System and Registry.
 
17     (205 ILCS 635/7-7 new)
18     Sec. 7-7. Continuing education for mortgage loan
19 originators.
20     (a) In order to meet the annual continuing education
21 requirements referred to in Section 7-6, a licensed mortgage
22 loan originator shall complete at least 8 hours of education
23 approved in accordance with subsection (b) of this Section,
24 which shall include at least:

 

 

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1         (1) 3 hours of Federal law and regulations;
2         (2) 2 hours of ethics, which shall include instruction
3     on fraud, consumer protection, and fair lending issues; and
4         (3) 2 hours of training related to lending standards
5     for the nontraditional mortgage product marketplace.
6     (b) For purposes of this subsection (a), continuing
7 education courses shall be reviewed and approved by the
8 Nationwide Mortgage Licensing System and Registry based upon
9 reasonable standards. Review and approval of a continuing
10 education course shall include review and approval of the
11 course provider.
12     (c) Nothing in this Section shall preclude any education
13 course, as approved by the Nationwide Mortgage Licensing System
14 and Registry, that is provided by the employer of the mortgage
15 loan originator or an entity which is affiliated with the
16 mortgage loan originator by an agency contract, or any
17 subsidiary or affiliate of the employer or entity.
18     (d) Continuing education may be offered either in a
19 classroom, online, or by any other means approved by the
20 Nationwide Mortgage Licensing System and Registry.
21     (e) A licensed mortgage loan originator:
22         (1) Except as provided in Section 7-6 and subsection
23     (i) of this Section, may only receive credit for a
24     continuing education course in the year in which the course
25     is taken; and
26         (2) May not take the same approved course in the same

 

 

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1     or successive years to meet the annual requirements for
2     continuing education.     
3     (f) A licensed mortgage loan originator who is an approved
4 instructor of an approved continuing education course may
5 receive credit for the licensed mortgage loan originator's own
6 annual continuing education requirement at the rate of 2 hours
7 credit for every one hour taught.
8     (g) A person having successfully completed the education
9 requirements approved by the Nationwide Mortgage Licensing
10 System and Registry for the subjects listed in subsection (a)
11 of this Section for any state shall be accepted as credit
12 towards completion of continuing education requirements in
13 this State.
14     (h) A licensed mortgage loan originator who subsequently
15 becomes unlicensed must complete the continuing education
16 requirements for the last year in which the license was held
17 prior to issuance of a new or renewed license.
18     (i) A person meeting the requirements of Section 7-6 may
19 make up any deficiency in continuing education as established
20 by rule or regulation of the Director.
 
21     (205 ILCS 635/7-8 new)
22     Sec. 7-8. Authority to require license. In addition to any
23 other duties imposed upon the Director by law, the Director
24 shall require mortgage loan originators to be licensed and
25 registered through the Nationwide Mortgage Licensing System

 

 

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1 and Registry. In order to carry out this requirement the
2 Director is authorized to participate in the Nationwide
3 Mortgage Licensing System and Registry. For this purpose, the
4 Director may establish by agreement, order or rule requirements
5 as necessary, including, but not limited to, the following:
6         (1) Background checks for:
7             (A) criminal history through fingerprint or other
8         databases;
9             (B) civil or administrative records;
10             (C) credit history; or
11             (D) any other information as deemed necessary by
12         the Nationwide Mortgage Licensing System and Registry.
13         (2) The payment of fees to apply for or renew licenses
14     through the Nationwide Mortgage Licensing System and
15     Registry;
16         (3) The setting or resetting as necessary of renewal or
17     reporting dates; and
18         (4) Requirements for amending or surrendering a
19     license or any other such activities as the Director deems
20     necessary for participation in the Nationwide Mortgage
21     Licensing System and Registry.
 
22     (205 ILCS 635/7-9 new)
23     Sec. 7-9. Report to Nationwide Mortgage Licensing System
24 and Registry. Subject to State privacy laws, the Director is
25 required to report regularly violations of this Act, as well as

 

 

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1 enforcement actions and other relevant information, to the
2 Nationwide Mortgage Licensing System and Registry subject to
3 the provisions contained in Section 4-8.1A of this Act.
 
4     (205 ILCS 635/7-10 new)
5     Sec. 7-10. Nationwide Mortgage Licensing System and
6 Registry information challenge process. The Director shall
7 establish a process whereby mortgage loan originators may
8 challenge information entered into the Nationwide Mortgage
9 Licensing System and Registry by the Director.
 
10     (205 ILCS 635/7-11 new)
11     Sec. 7-11. Mortgage loan originator suspension or
12 revocation of registration; refusal to renew; fines.
13     (a) In addition to any other action authorized by this Act
14 or any other applicable law, rule or regulation, the Director
15 may do the following:
16         (1) Suspend, revoke, or refuse to renew a license or
17     reprimand, place on probation or otherwise discipline a
18     licensee if the Director finds that the mortgage loan
19     originator has violated this Act or any other applicable
20     law or regulation or has been convicted of a criminal
21     offense.
22         (2) Impose a fine of not more than $1,000 for each day
23     for each violation of this Act or any other applicable law
24     or regulation that is committed. If the Mortgage Loan

 

 

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1     Originator engages in a pattern of repeated violations, the
2     Director may impose a fine of not more than $2,000 for each
3     day for each violation committed. In determining the amount
4     of a fine to be imposed pursuant to this Act or any other
5     applicable law or regulation, the Director shall consider
6     all of the following:
7             (A) The seriousness of the violation;
8             (B) The mortgage loan originator's good faith
9         efforts to prevent the violation; and
10             (C) The mortgage loan originator's history of
11         violations and compliance with orders.
12     (b) In addition to any other action authorized by this Act
13 or any other applicable law, rule or regulation, the Director
14 may investigate alleged violations of the Act or any other
15 applicable law, rule or regulation and complaints concerning
16 any such violation. The Director may seek a court order to
17 enjoin the violation.
18     (c) In addition to any other action authorized by this Act
19 or any other applicable law, rule or regulation, if the
20 Director determines that a mortgage loan originator is engaged
21 in or is believed to be engaged in activities that may
22 constitute a violation of this Act or any other applicable law,
23 rule or regulation, the Director may issue a cease and desist
24 order to compel the mortgage loan originator to comply with
25 this Act or any other applicable law, rule or regulation or,
26 upon a showing that an emergency exists, may suspend the

 

 

HB4011 Enrolled - 80 - LRB096 05294 MJR 15360 b

1 mortgage loan originator's license for a period not exceeding
2 180 calendar days, pending investigation.
 
3     (205 ILCS 635/7-12 new)
4     Sec. 7-12. Surety bond required.
5     (a) Each mortgage loan originator shall be covered by a
6 surety bond in accordance with this Section. In the event that
7 the mortgage loan originator is an employee or exclusive agent
8 of a person subject to this Act, the surety bond of such person
9 subject to this Act can be used in lieu of the mortgage loan
10 originator's surety bond requirement. The surety bond shall
11 provide coverage for each mortgage loan originator in an amount
12 prescribed under subsection (b) of this Section. The surety
13 bond shall be in a form prescribed by the Director. The
14 Director may promulgate rules or regulations with respect to
15 the requirements for such surety bonds as necessary to
16 accomplish the purposes of this Act.
17     (b) The penal sum of the surety bond shall be maintained in
18 an amount that reflects the dollar amount of loans originated
19 as determined by the Director.
20     (c) When an action is commenced on a licensee's bond the
21 Director may require the filing of a new bond.
22     (d) Immediately upon recovery upon any action on the bond
23 the licensee shall file a new bond.
 
24     (205 ILCS 635/7-13 new)

 

 

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1     Sec. 7-13. Prohibited acts and practices for mortgage loan
2 originators. It is a violation of this Act for an individual
3 subject to this Act to:
4         (1) Directly or indirectly employ any scheme, device,
5     or artifice to defraud or mislead borrowers or lenders or
6     to defraud any person.
7         (2) Engage in any unfair or deceptive practice toward
8     any person.
9         (3) Obtain property by fraud or misrepresentation.
10         (4) Solicit or enter into a contract with a borrower
11     that provides in substance that the person or individual
12     subject to this Act may earn a fee or commission through
13     "best efforts" to obtain a loan even though no loan is
14     actually obtained for the borrower.
15         (5) Solicit, advertise, or enter into a contract for
16     specific interest rates, points, or other financing terms
17     unless the terms are actually available at the time of
18     soliciting, advertising, or contracting.
19         (6) Conduct any business covered by this Act without
20     holding a valid license as required under this Act, or
21     assist or aid and abet any person in the conduct of
22     business under this Act without a valid license as required
23     under this Act.
24         (7) Fail to make disclosures as required by this Act
25     and any other applicable State or federal law, including
26     regulations thereunder.

 

 

HB4011 Enrolled - 82 - LRB096 05294 MJR 15360 b

1         (8) Fail to comply with this Act or rules or
2     regulations promulgated under this Act, or fail to comply
3     with any other state or federal law, including the rules
4     and regulations thereunder, applicable to any business
5     authorized or conducted under this Act.
6         (9) Make, in any manner, any false or deceptive
7     statement or representation of a material fact, or any
8     omission of a material fact, required on any document or
9     application subject to this Act.
10         (10) Negligently make any false statement or knowingly
11     and willfully make any omission of material fact in
12     connection with any information or report filed with a
13     governmental agency or the Nationwide Mortgage Licensing
14     System and Registry or in connection with any investigation
15     conducted by the Director or another governmental agency.
16         (11) Make any payment, threat or promise, directly or
17     indirectly, to any person for the purpose of influencing
18     the independent judgment of the person in connection with a
19     residential mortgage loan, or make any payment threat or
20     promise, directly or indirectly, to any appraiser of a
21     property, for the purpose of influencing the independent
22     judgment of the appraiser with respect to the value of the
23     property.
24         (12) Collect, charge, attempt to collect or charge, or
25     use or propose any agreement purporting to collect or
26     charge any fee prohibited by this Act.

 

 

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1         (13) Cause or require a borrower to obtain property
2     insurance coverage in an amount that exceeds the
3     replacement cost of the improvements as established by the
4     property insurer.
5         (14) Fail to truthfully account for monies belonging to
6     a party to a residential mortgage loan transaction.
7         (15) Engage in conduct that constitutes dishonest
8     dealings.
9         (16) Knowingly instruct, solicit, propose, or cause a
10     person other than the borrower to sign a borrower's
11     signature on a mortgage related document, or solicit,
12     accept or execute any contract or other document related to
13     the residential mortgage transaction that contains any
14     blanks to be filled in after signing or initialing the
15     contract or other document, except for forms authorizing
16     the verification of application information.
17         (17) Discourage any applicant from seeking or
18     participating in housing or financial counseling either
19     before or after the consummation of a loan transaction, or
20     fail to provide information on counseling resources upon
21     request.
22         (18) Charge for any ancillary products or services, not
23     essential to the basic loan transaction for which the
24     consumer has applied, without the applicant's knowledge
25     and written authorization, or charge for any ancillary
26     products or services not actually provided in the

 

 

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1     transaction.
2         (19) Fail to give reasonable consideration to a
3     borrower's ability to repay the debt.
4         (20) Interfere or obstruct an investigation or
5     examination conducted pursuant to this Act.
 
6     (205 ILCS 635/7-14 new)
7     Sec. 7-14. Unique identifier shown. The unique identifier
8 of any person originating a residential mortgage loan shall be
9 clearly shown on all residential mortgage loan application
10 forms, solicitations, and advertisements, including business
11 cards and websites, and any other documents as established by
12 rule, regulation, or order of the Commissioner.
 
13     Section 97. Severability. The provisions of this Act are
14 severable under Section 1.31 of the Statute on Statutes.
 
15     Section 99. Effective date. This Act takes effect upon
16 becoming law.