Rep. Angelo Saviano

Filed: 10/16/2009

 

 


 

 


 
09600SB0253ham001 LRB096 03546 AJO 30077 a

1
AMENDMENT TO SENATE BILL 253

2     AMENDMENT NO. ______. Amend Senate Bill 253 by replacing
3 everything after the enacting clause with the following:
 
4     "Section 5. The Mortgage Escrow Account Act is amended by
5 adding Section 6.5 as follows:
 
6     (765 ILCS 910/6.5 new)
7     Sec. 6.5. Homeownership preservation program.
8     (a) For purposes of this Section,
9     "Homeownership Preservation Program" means
10         (1) a program that is expressly intended to assist
11     homeowners by refinancing or restructuring existing
12     mortgage obligations either (i) to avoid default or
13     foreclosure, or both, or (ii) to lower interest rates, and
14     that is sponsored by a federal, state, or local government
15     authority or a non-profit organization; or
16         (2) a lender-sponsored program that is expressly

 

 

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1     intended to assist homeowners by restructuring existing
2     mortgage obligations to avoid default or foreclosure, or
3     both.
4     "Subprime Mortgage Lender" means a mortgage lender that
5 has, for at least 2 of the prior 3 reporting years, reported
6 the rate spread, as required under 12 C.F.R. § 203.4(a)(12),
7 for at least 75% of the loans reported by the mortgage lender
8 in the Loan/Application Register filed in compliance with the
9 federal Home Mortgage Disclosure Act, 12 U.S.C. 2801 et seq.,
10 and implementing Regulation C, 12 C.F.R. 201 et seq.
11     (b) Section 6 shall not apply:
12         (1) to a mortgage loan made by a subprime mortgage
13     lender in compliance with the requirements for
14     higher-priced mortgage loans established in Regulation Z
15     12 C.F.R. Part 226, issued by the Board of Governors of the
16     Federal Reserve System to implement the federal Truth in
17     Lending Act, whether or not the mortgage loan is a
18     higher-priced mortgage loan, provided that:
19             (A) for loans that are not higher-priced mortgage
20         loans, the escrow account must be terminated upon the
21         borrower's request at no cost to the borrower; and
22             (B) for loans that are higher-priced mortgage
23         loans, the escrow account must be terminated upon the
24         borrower's request at no cost to the borrower on terms
25         no stricter than the following conditions:
26                 (i) the escrow termination requirements

 

 

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1             established in Regulation Z are satisfied;
2                 (ii) the borrower has maintained a
3             satisfactory payment history (no payments more
4             than 30 days late) for the 12 months prior to the
5             mortgage lender's receipt of the borrower's
6             termination request; and
7                 (iii) the borrower has reimbursed the mortgage
8             lender for any escrow advances or escrow
9             deficiencies existing at the time of the
10             borrower's termination request.
11         (2) to a refinance or modification made by a subprime
12     mortgage lender under a homeownership preservation program
13     that requires establishment of an escrow account as a
14     condition or requirement of the refinance or modification,
15     provided that the escrow account must be terminated upon
16     the borrower's request at no cost to the borrower on terms
17     no stricter than the following conditions:
18             (A) termination is permitted under the terms of the
19         government or non-profit sponsored homeownership
20         preservation program, if applicable, and the borrower
21         complies with all conditions or requirements for
22         termination established by or allowed under such
23         program;
24             (B) the borrower has maintained a satisfactory
25         payment history (no payments more than 30 days late)
26         for the 12 months prior to the mortgage lender's

 

 

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1         receipt of the borrower's termination request; and
2             (C) the borrower has reimbursed the mortgage
3         lender for any escrow advances or escrow deficiencies
4         existing at the time of the borrower's termination
5         request.
6     Termination may not be denied for failure to reimburse
7 escrow advances or escrow deficiencies under item (iii) of
8 subparagraph (B) of paragraph (1) of subsection (b), or
9 subparagraph (C) of paragraph (2) of subsection (b) if the
10 borrower claims, in writing, that there is an error with such
11 advances or deficiencies. In such case, the lender must
12 terminate the escrow account if all other conditions of
13 termination are satisfied; however, such termination will not
14 alter or affect any other rights of the mortgage lender or the
15 borrower with respect to the collection of such escrow advances
16 or escrow deficiencies.
 
17     Section 99. Effective date. This Act takes effect upon
18 becoming law.".