Full Text of HB5572 97th General Assembly
HB5572 97TH GENERAL ASSEMBLY |
| | 97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012 HB5572 Introduced 2/15/2012, by Rep. Joe Sosnowski SYNOPSIS AS INTRODUCED: |
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Amends the High Risk Home Loan Act. Excludes loans made under the Veteran's Administration Interest Rate Reduction Refinancing Loan program from the scope of the Act.
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| | A BILL FOR |
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| 1 | | AN ACT concerning lending practices.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The High Risk Home Loan Act is amended by | 5 | | changing Section 10 as follows:
| 6 | | (815 ILCS 137/10)
| 7 | | Sec. 10. Definitions. As used in this Act:
| 8 | | "Approved credit counselor" means a credit counselor | 9 | | approved by the
Director of Financial Institutions.
| 10 | | "Borrower" means a natural person who seeks or obtains a | 11 | | high risk
home loan.
| 12 | | "Commissioner" means the Commissioner of the Office of | 13 | | Banks and Real
Estate.
| 14 | | "Department" means the Department of Financial | 15 | | Institutions.
| 16 | | "Director" means the Director of Financial Institutions.
| 17 | | "Good faith" means honesty in fact in the conduct or | 18 | | transaction concerned.
| 19 | | "High risk home loan"
means a home equity loan in which (i) | 20 | | at the time of origination, the annual
percentage rate
exceeds | 21 | | by more than 6 percentage points in the case of a first lien | 22 | | mortgage,
or
by more than 8 percentage points in the case of a | 23 | | junior mortgage, the yield on
U.S. Treasury securities having |
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| 1 | | comparable periods of maturity to the loan
maturity as of the | 2 | | fifteenth day of the month immediately preceding the month
in
| 3 | | which the application for the loan is received by the lender or | 4 | | (ii) the total
points
and fees payable by the consumer at or | 5 | | before closing will exceed the greater
of
5% of the total loan | 6 | | amount or $800. The $800 figure shall be adjusted annually
on | 7 | | January 1 by the annual percentage change in the Consumer Price | 8 | | Index for
All Urban Consumers for all items published by the | 9 | | United States Department of
Labor.
"High risk home loan"
does
| 10 | | not include a loan that is made primarily for a business | 11 | | purpose unrelated to
the
residential real property securing the | 12 | | loan , or to an open-end credit plan
subject to
12 CFR 226 | 13 | | (2000, no subsequent amendments or editions are included) , or a | 14 | | loan made under the Veteran's Administration Interest Rate | 15 | | Reduction Refinancing Loan program .
| 16 | | "Home equity loan" means any loan secured by the borrower's | 17 | | primary
residence where the proceeds are not used as purchase | 18 | | money for the
residence.
| 19 | | "Lender" means a natural or artificial person who | 20 | | transfers, deals in,
offers, or makes a high risk home loan. | 21 | | "Lender" includes, but is not limited
to,
creditors and
brokers | 22 | | who transfer, deal in, offer, or make high risk home loans. | 23 | | "Lender"
does not include purchasers, assignees, or subsequent | 24 | | holders of high risk home
loans.
| 25 | | "Office" means the Office of Banks and Real Estate.
| 26 | | "Points and fees" means all items required to be disclosed |
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| 1 | | as points and
fees under 12 CFR 226.32 (2000, no subsequent | 2 | | amendments or editions
included); the premium of any single | 3 | | premium credit life, credit disability,
credit
unemployment, | 4 | | or any other life or health insurance that is financed directly
| 5 | | or
indirectly into the loan; and compensation paid directly or | 6 | | indirectly to a
mortgage
broker, including a broker that | 7 | | originates a loan in its own name in a
table-funded
| 8 | | transaction, not otherwise included in 12 CFR 226.4.
| 9 | | "Reasonable" means fair, proper, just, or prudent under the | 10 | | circumstances.
| 11 | | "Servicer" means any entity chartered under the Illinois | 12 | | Banking Act, the
Savings Bank Act, the Illinois Credit Union | 13 | | Act, or the Illinois Savings and
Loan Act of 1985 and any | 14 | | person or entity licensed under the Residential
Mortgage | 15 | | License Act of 1987, the Consumer Installment Loan Act, or the | 16 | | Sales
Finance Agency Act who
is responsible for the collection | 17 | | or remittance for, or has the right or
obligation to collect or | 18 | | remit for, any lender, note owner, or note holder or
for a | 19 | | licensee's own account, of payments, interest, principal, and | 20 | | trust items
(such as hazard
insurance and taxes on a | 21 | | residential mortgage loan) in accordance with the
terms of the | 22 | | residential mortgage loan, including loan payment follow-up,
| 23 | | delinquency loan follow-up, loan analysis, and any | 24 | | notifications to
the borrower that are necessary to enable the | 25 | | borrower to keep the loan current
and in good
standing.
| 26 | | "Total loan amount" has the same meaning as that term is |
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| 1 | | given in 12
CFR 226.32 and shall be calculated in accordance | 2 | | with the Federal Reserve
Board's Official Staff Commentary to | 3 | | that regulation.
| 4 | | (Source: P.A. 93-561, eff. 1-1-04.)
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