Full Text of HB2325 103rd General Assembly
HB2325enr 103RD GENERAL ASSEMBLY |
| | HB2325 Enrolled | | LRB103 26311 BMS 52672 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 1-3 and 1-4 and by adding Section | 6 | | 3-11 as follows: | 7 | | (205 ILCS 635/1-3) (from Ch. 17, par. 2321-3) | 8 | | Sec. 1-3. Necessity for license; scope of Act. | 9 | | (a) No person, partnership, association, corporation or | 10 | | other entity
shall engage in the business of brokering, | 11 | | funding, originating, servicing
or purchasing of residential | 12 | | mortgage loans without first obtaining a
license from the | 13 | | Secretary in accordance with the licensing procedure
provided | 14 | | in this Article I and such regulations as may be promulgated by
| 15 | | the Secretary. The licensing provisions of this Section shall | 16 | | not apply
to any entity engaged solely in commercial mortgage | 17 | | lending or
to any person, partnership association, corporation | 18 | | or other entity
exempted pursuant to Section 1-4, subsection | 19 | | (d), of this Act or in accordance
with regulations promulgated | 20 | | by the Secretary hereunder. No provision of this Act shall | 21 | | apply to an exempt person or entity as defined in items (1) and | 22 | | (1.5) of subsection (d) of Section 1-4 of this Act. | 23 | | Notwithstanding anything to the contrary in the preceding |
| | | HB2325 Enrolled | - 2 - | LRB103 26311 BMS 52672 b |
|
| 1 | | sentence, an individual acting as a mortgage loan originator | 2 | | who is not employed by and acting for an entity described in | 3 | | item (1) of subsection (tt) of Section 1-4 of this Act shall be | 4 | | subject to the mortgage loan originator licensing requirements | 5 | | of Article VII of this Act. | 6 | | Effective January 1, 2011, no provision of this Act shall | 7 | | apply to an exempt person or entity as defined in item (1.8) of | 8 | | subsection (d) of Section 1-4 of this Act. Notwithstanding | 9 | | anything to the contrary in the preceding sentence, an | 10 | | individual acting as a mortgage loan originator who is not | 11 | | employed by and acting for an entity described in item (1) of | 12 | | subsection (tt) of Section 1-4 of this Act shall be subject to | 13 | | the mortgage loan originator licensing requirements of Article | 14 | | VII of this Act, and provided that an individual acting as a | 15 | | mortgage loan originator under item (1.8) of subsection (d) of | 16 | | Section 1-4 of this Act shall be further subject to a | 17 | | determination by the U.S. Department of Housing and Urban | 18 | | Development through final rulemaking or other authorized | 19 | | agency determination under the federal Secure and Fair | 20 | | Enforcement for Mortgage Licensing Act of 2008. | 21 | | (a-1) A person who is exempt from licensure pursuant to | 22 | | paragraph (ii) of item (1) of subsection (d) of Section 1-4 of | 23 | | this Act as a federally chartered savings bank that is | 24 | | registered with the Nationwide Multistate Licensing System and | 25 | | Registry may apply to the Secretary for an exempt company | 26 | | registration for the purpose of sponsoring one or more |
| | | HB2325 Enrolled | - 3 - | LRB103 26311 BMS 52672 b |
|
| 1 | | individuals subject to the mortgage loan originator licensing | 2 | | requirements of Article VII of this Act. Registration with the | 3 | | Division of Banking of the Department shall not affect the | 4 | | exempt status of the applicant. | 5 | | (1) A mortgage loan originator eligible for licensure | 6 | | under this subsection shall (A) be covered under an | 7 | | exclusive written contract with, and originate residential | 8 | | mortgage loans solely on behalf of, that exempt person; | 9 | | and (B) hold a current, valid insurance producer license | 10 | | under Article XXXI of the Illinois Insurance Code. | 11 | | (2) An exempt person shall: (A) fulfill any reporting | 12 | | requirements required by the Nationwide Multistate | 13 | | Licensing System and Registry or the Secretary; (B) | 14 | | provide a blanket surety bond pursuant to Section 7-12 of | 15 | | this Act covering the activities of all its sponsored | 16 | | mortgage loan originators; (C) reasonably supervise the | 17 | | activities of all its sponsored mortgage loan originators; | 18 | | (D) comply with all rules and orders (including the | 19 | | averments contained in Section 2-4 of this Act as | 20 | | applicable to a non-licensed exempt entity provided for in | 21 | | this Section) that the Secretary deems necessary to ensure | 22 | | compliance with the federal SAFE Act; and (E) pay an | 23 | | annual registration fee established by the Director. | 24 | | (3) The Secretary may deny an exempt company | 25 | | registration to an exempt person or fine, suspend, or | 26 | | revoke an exempt company registration if the Secretary |
| | | HB2325 Enrolled | - 4 - | LRB103 26311 BMS 52672 b |
|
| 1 | | finds one of the following: | 2 | | (A) that the exempt person is not a person of | 3 | | honesty, truthfulness, or good character; | 4 | | (B) that the exempt person violated any applicable | 5 | | law, rule, or order; | 6 | | (C) that the exempt person refused or failed to | 7 | | furnish, within a reasonable time, any information or | 8 | | make any report that may be required by the Secretary; | 9 | | (D) that the exempt person had a final judgment | 10 | | entered against him or her in a civil action on grounds | 11 | | of fraud, deceit, or misrepresentation, and the | 12 | | conduct on which the judgment is based indicates that | 13 | | it would be contrary to the interest of the public to | 14 | | permit the exempt person to manage a loan originator; | 15 | | (E) that the exempt person had an order entered | 16 | | against him or her involving fraud, deceit, or | 17 | | misrepresentation by an administrative agency of this | 18 | | State, the federal government, or any other state or | 19 | | territory of the United States, and the facts relating | 20 | | to the order indicate that it would be contrary to the | 21 | | interest of the public to permit the exempt person to | 22 | | manage a loan originator; | 23 | | (F) that the exempt person made a material | 24 | | misstatement or suppressed or withheld information on | 25 | | the application for an exempt company registration or | 26 | | any document required to be filed with the Secretary; |
| | | HB2325 Enrolled | - 5 - | LRB103 26311 BMS 52672 b |
|
| 1 | | or | 2 | | (G) that the exempt person violated Section 4-5 of | 3 | | this Act. | 4 | | (a-5) An entity that is exempt from licensure pursuant to | 5 | | item (7) of subsection (d) of Section 1-4 of this Act as an | 6 | | independent loan processing entity shall annually apply to the | 7 | | Secretary through the Nationwide Multistate Licensing System | 8 | | and Registry for an exempt company registration for the | 9 | | purpose of sponsoring one or more individuals subject to the | 10 | | mortgage loan originator licensing requirements of Article VII | 11 | | of this Act. A loan processor who performs clerical or support | 12 | | duties at the direction of and subject to the supervision and | 13 | | instruction of a licensed mortgage loan originator sponsored | 14 | | by an independent loan processing entity shall be exempt from | 15 | | his or her own licensing as a mortgage loan originator. An | 16 | | independent loan processing entity shall not be subject to | 17 | | examination by the Secretary. The Secretary may adopt rules to | 18 | | implement any provisions necessary for the administration of | 19 | | this subsection. | 20 | | (b) No person, partnership, association, corporation, or | 21 | | other entity
except a licensee under this Act or an entity | 22 | | exempt from licensing
pursuant to Section 1-4, subsection (d), | 23 | | of this Act shall do any business
under any name or title, or | 24 | | circulate or use any advertising or make any
representation or | 25 | | give any information to any person, which indicates or
| 26 | | reasonably implies activity within the scope
of this Act. |
| | | HB2325 Enrolled | - 6 - | LRB103 26311 BMS 52672 b |
|
| 1 | | (c) The Secretary may, through the Attorney General, | 2 | | request the circuit
court of either Cook or Sangamon County to | 3 | | issue an injunction to restrain
any person from violating or | 4 | | continuing to violate any of the foregoing
provisions of this | 5 | | Section. | 6 | | (d) When the Secretary has reasonable cause to believe | 7 | | that any
entity which has not submitted an application for | 8 | | licensure is conducting
any of the activities described in | 9 | | subsection (a) hereof, the Secretary
shall have the power to | 10 | | examine all books and records of the entity and any
additional | 11 | | documentation necessary in order to determine whether such
| 12 | | entity should become licensed under this Act. | 13 | | (d-1) The Secretary may issue orders against any person if | 14 | | the Secretary has reasonable cause to believe that an unsafe, | 15 | | unsound, or unlawful practice has occurred, is occurring, or | 16 | | is about to occur, if any person has violated, is violating, or | 17 | | is about to violate any law, rule, or written agreement with | 18 | | the Secretary, or for the purposes of administering the | 19 | | provisions of this Act and any rule adopted in accordance with | 20 | | this Act.
| 21 | | (e) Any person, partnership, association, corporation or | 22 | | other entity
who violates any provision of this Section | 23 | | commits a business offense and
shall be fined an amount not to | 24 | | exceed $25,000. A mortgage loan brokered, funded, originated, | 25 | | serviced, or purchased by a party who is not licensed under | 26 | | this Section shall not be held to be invalid solely on the |
| | | HB2325 Enrolled | - 7 - | LRB103 26311 BMS 52672 b |
|
| 1 | | basis of a violation under this Section. The changes made to | 2 | | this Section by Public Act 99-113 are declarative of existing | 3 | | law. | 4 | | (f) Each person, partnership, association, corporation or | 5 | | other entity
conducting activities regulated by this Act shall | 6 | | be issued one license.
Each full service office , place of | 7 | | business or location at which a residential mortgage
licensee | 8 | | conducts any part of his or her business must
be recorded with | 9 | | the Secretary pursuant to Section 2-8 of this Act. | 10 | | (g) Licensees under this Act shall solicit, broker, fund, | 11 | | originate,
service and purchase residential mortgage loans | 12 | | only in conformity with the
provisions of this Act and such | 13 | | rules and regulations as may be promulgated
by the Secretary. | 14 | | (h) This Act applies to all entities doing business in | 15 | | Illinois as
residential mortgage bankers, as defined by "An | 16 | | Act to provide for the
regulation of mortgage bankers", | 17 | | approved September 15, 1977, as amended,
regardless of whether | 18 | | licensed under that or any prior Act. Any existing
residential | 19 | | mortgage lender or residential mortgage broker in Illinois
| 20 | | whether or not previously licensed, must operate in accordance | 21 | | with this Act. | 22 | | (i) This Act is a successor Act to and a continuance of the | 23 | | regulation
of residential mortgage bankers provided in "An Act | 24 | | to provide for the
regulation of mortgage bankers", approved | 25 | | September 15, 1977, as amended. | 26 | | Entities and persons subject to the predecessor Act shall |
| | | HB2325 Enrolled | - 8 - | LRB103 26311 BMS 52672 b |
|
| 1 | | be subject to
this Act from and after its effective date. | 2 | | (Source: P.A. 100-851, eff. 8-14-18; 100-1153, eff. 12-19-18; | 3 | | 101-81, eff. 7-12-19.) | 4 | | (205 ILCS 635/1-4) | 5 | | Sec. 1-4. Definitions. The following words and phrases | 6 | | have the meanings given to them in this Section: | 7 | | (a) "Residential real property" or "residential real | 8 | | estate" shall mean any real property located in Illinois, | 9 | | upon which is constructed or intended to be constructed a | 10 | | dwelling. Those terms include a manufactured home as | 11 | | defined in subdivision (53) of Section 9-102 of the | 12 | | Uniform Commercial Code which is real property as defined | 13 | | in Section 5-35 of the Conveyance and Encumbrance of | 14 | | Manufactured Homes as Real Property and Severance Act. | 15 | | (b) "Making a residential mortgage loan" or "funding a | 16 | | residential mortgage
loan" shall mean for compensation or | 17 | | gain, either directly or indirectly,
advancing funds or | 18 | | making a commitment to advance funds to a loan applicant
| 19 | | for a residential mortgage loan. | 20 | | (c) "Soliciting, processing, placing, or negotiating a | 21 | | residential
mortgage loan" shall mean for compensation or | 22 | | gain, either directly or
indirectly, accepting or offering | 23 | | to accept an application for a
residential mortgage loan, | 24 | | assisting or offering to assist in the
processing of an | 25 | | application for a residential mortgage loan on behalf of a
|
| | | HB2325 Enrolled | - 9 - | LRB103 26311 BMS 52672 b |
|
| 1 | | borrower, or negotiating or offering to negotiate the | 2 | | terms or conditions
of a residential mortgage loan with a | 3 | | lender on behalf of a borrower
including, but not limited | 4 | | to, the submission of credit packages for the
approval of | 5 | | lenders, the preparation of residential mortgage loan | 6 | | closing
documents, including a closing in the name of a | 7 | | broker. | 8 | | (d) "Exempt person or entity" shall mean the | 9 | | following: | 10 | | (1) (i) Any banking organization or foreign | 11 | | banking corporation
licensed by the Illinois | 12 | | Commissioner of Banks and Real Estate or the
United | 13 | | States Comptroller of the Currency to transact | 14 | | business in this
State; (ii) any national bank, | 15 | | federally chartered savings and loan
association, | 16 | | federal savings bank, federal credit union; (iii) | 17 | | (blank); (iv) any bank, savings and loan
association, | 18 | | savings bank, or credit union organized under the laws | 19 | | of this
or any other state; (v) any Illinois Consumer | 20 | | Installment Loan Act licensee;
(vi) any insurance | 21 | | company authorized to transact business in this State;
| 22 | | (vii) any entity engaged solely in commercial mortgage | 23 | | lending; (viii) any
service corporation of a savings | 24 | | and loan association or savings bank organized
under | 25 | | the laws of this State or the service corporation of a | 26 | | federally
chartered savings and loan association or |
| | | HB2325 Enrolled | - 10 - | LRB103 26311 BMS 52672 b |
|
| 1 | | savings bank having
its principal place of business in | 2 | | this State, other than a service
corporation licensed | 3 | | or entitled to reciprocity under the Real Estate
| 4 | | License Act of 2000; or (ix) any first tier subsidiary | 5 | | of a
bank, the charter of which is issued under the | 6 | | Illinois Banking Act
by the Illinois Commissioner of | 7 | | Banks and Real Estate,
or the first tier subsidiary of | 8 | | a bank chartered by the United States
Comptroller of | 9 | | the Currency and that has its principal place of | 10 | | business
in this State, provided that the first tier | 11 | | subsidiary is regularly
examined by the Illinois | 12 | | Commissioner of Banks and Real Estate
or the | 13 | | Comptroller of the Currency, or a consumer compliance | 14 | | examination is
regularly conducted by the Federal | 15 | | Reserve Board. | 16 | | (1.5) Any employee of a person or entity mentioned | 17 | | in
item (1) of this subsection, when acting for such | 18 | | person or entity, or any registered mortgage loan | 19 | | originator when acting for an entity described in | 20 | | subsection (tt) of this Section. | 21 | | (1.8) Any person or entity that does not originate | 22 | | mortgage loans in the ordinary course of business, but | 23 | | makes or acquires residential mortgage loans with his | 24 | | or her own funds for his or her or its own investment | 25 | | without intent to make, acquire, or resell more than 3 | 26 | | residential mortgage loans in any one calendar year. |
| | | HB2325 Enrolled | - 11 - | LRB103 26311 BMS 52672 b |
|
| 1 | | (2) (Blank). | 2 | | (2.1) A bona fide nonprofit organization. | 3 | | (2.2) An employee of a bona fide nonprofit | 4 | | organization when acting on behalf of that | 5 | | organization. | 6 | | (3) Any person employed by a licensee to assist in | 7 | | the performance of
the residential mortgage licensee's | 8 | | activities regulated by this Act who is compensated in | 9 | | any manner by
only one licensee. | 10 | | (4) (Blank). | 11 | | (5) Any individual, corporation, partnership, or | 12 | | other entity that
originates, services, or brokers | 13 | | residential mortgage loans, as these
activities are | 14 | | defined in this Act, and who or which receives no
| 15 | | compensation for those activities, subject to the | 16 | | Commissioner's
regulations and the federal Secure and | 17 | | Fair Enforcement for Mortgage Licensing Act of 2008 | 18 | | and the rules promulgated under that Act with regard | 19 | | to the nature and amount of compensation. | 20 | | (6) (Blank). | 21 | | (7) Any entity engaged solely in providing loan | 22 | | processing services through the sponsoring of | 23 | | individuals acting pursuant to subsection (d) of | 24 | | Section 7-1A of this Act. | 25 | | (e) "Licensee" or "residential mortgage licensee" | 26 | | shall mean a person,
partnership, association, |
| | | HB2325 Enrolled | - 12 - | LRB103 26311 BMS 52672 b |
|
| 1 | | corporation, or any other entity who or which is
licensed | 2 | | pursuant to this Act to engage in the activities regulated | 3 | | by
this Act. | 4 | | (f) "Mortgage loan" "residential mortgage loan" or | 5 | | "home
mortgage loan" shall mean any loan primarily for | 6 | | personal, family, or household use that is secured by a | 7 | | mortgage, deed of trust, or other equivalent consensual | 8 | | security interest on a dwelling as defined in Section | 9 | | 103(v) of the federal Truth in Lending Act, or residential | 10 | | real estate upon which is constructed or intended to be | 11 | | constructed a dwelling. | 12 | | (g) "Lender" shall mean any person, partnership, | 13 | | association,
corporation, or any other entity who either | 14 | | lends or invests money in
residential mortgage loans. | 15 | | (h) "Ultimate equitable owner" shall mean a person | 16 | | who, directly
or indirectly, owns or controls an ownership | 17 | | interest in a corporation,
foreign corporation, alien | 18 | | business organization, trust, or any other form
of | 19 | | business organization regardless of whether the person | 20 | | owns or controls
the ownership interest through one or | 21 | | more persons or one or more proxies,
powers of attorney, | 22 | | nominees, corporations, associations, partnerships,
| 23 | | trusts, joint stock companies, or other entities or | 24 | | devices, or any
combination thereof. | 25 | | (i) "Residential mortgage financing transaction" shall | 26 | | mean the negotiation,
acquisition, sale, or arrangement |
| | | HB2325 Enrolled | - 13 - | LRB103 26311 BMS 52672 b |
|
| 1 | | for or the offer to negotiate, acquire,
sell, or arrange | 2 | | for, a residential mortgage loan or residential mortgage
| 3 | | loan commitment. | 4 | | (j) "Personal residence address" shall mean a street | 5 | | address and shall
not include a post office box number. | 6 | | (k) "Residential mortgage loan commitment" shall mean | 7 | | a contract for
residential mortgage loan financing. | 8 | | (l) "Party to a residential mortgage financing | 9 | | transaction" shall mean a
borrower, lender, or loan broker | 10 | | in a residential mortgage financing
transaction. | 11 | | (m) "Payments" shall mean payment of all or any of the | 12 | | following:
principal, interest and escrow reserves for | 13 | | taxes, insurance and other related
reserves, and | 14 | | reimbursement for lender advances. | 15 | | (n) "Commissioner" shall mean the Commissioner of | 16 | | Banks and Real Estate, except that, beginning on April 6, | 17 | | 2009 (the effective date of Public Act 95-1047), all | 18 | | references in this Act to the Commissioner of Banks and | 19 | | Real Estate are deemed, in appropriate contexts, to be | 20 | | references to the Secretary of Financial and Professional | 21 | | Regulation, or his or her designee, including the Director | 22 | | of the Division of Banking of the Department of Financial | 23 | | and Professional Regulation. | 24 | | (n-1) "Director" shall mean the Director of the | 25 | | Division of Banking of the Department of Financial and | 26 | | Professional Regulation, except that, beginning on July |
| | | HB2325 Enrolled | - 14 - | LRB103 26311 BMS 52672 b |
|
| 1 | | 31, 2009 (the effective date of Public Act 96-112), all | 2 | | references in this Act to the Director are deemed, in | 3 | | appropriate contexts, to be the Secretary of Financial and | 4 | | Professional Regulation, or his or her designee, including | 5 | | the Director of the Division of Banking of the Department | 6 | | of Financial and Professional Regulation. | 7 | | (o) "Loan brokering", "brokering", or "brokerage | 8 | | service" shall mean the act
of helping to obtain from | 9 | | another entity, for a borrower, a loan secured by
| 10 | | residential real estate situated in Illinois or assisting | 11 | | a borrower in
obtaining a loan secured by residential real | 12 | | estate situated in Illinois in
return for consideration to | 13 | | be paid by either the borrower or the lender
including, | 14 | | but not limited to, contracting for the delivery of | 15 | | residential
mortgage loans to a third party lender and | 16 | | soliciting, processing, placing,
or negotiating | 17 | | residential mortgage loans. | 18 | | (p) "Loan broker" or "broker" shall mean a person, | 19 | | partnership,
association, corporation, or limited | 20 | | liability company, other than
those persons, partnerships,
| 21 | | associations, corporations, or limited liability companies | 22 | | exempted
from licensing pursuant to Section
1-4, | 23 | | subsection (d), of this Act, who performs the activities | 24 | | described
in subsections (c), (o), and (yy) of this | 25 | | Section. | 26 | | (q) "Servicing" shall mean the collection or |
| | | HB2325 Enrolled | - 15 - | LRB103 26311 BMS 52672 b |
|
| 1 | | remittance for or the
right or obligation to collect or | 2 | | remit for any lender, noteowner,
noteholder, or for a | 3 | | licensee's own account, of payments, interests,
principal, | 4 | | and trust items such as hazard insurance and taxes on a
| 5 | | residential mortgage loan in accordance with the terms of | 6 | | the residential
mortgage loan; and includes loan payment | 7 | | follow-up, delinquency loan
follow-up, loan analysis and | 8 | | any notifications to the borrower that are
necessary to | 9 | | enable the borrower to keep the loan current and in good | 10 | | standing. "Servicing" includes management of third-party | 11 | | entities acting on behalf of a residential mortgage | 12 | | licensee for the collection of delinquent payments and the | 13 | | use by such third-party entities of said licensee's | 14 | | servicing records or information, including their use in | 15 | | foreclosure. | 16 | | (r) "Full service office" shall mean an office, | 17 | | provided by the licensee and not subleased from the | 18 | | licensee's employees or independent contractors , and staff | 19 | | in Illinois
reasonably adequate to handle efficiently | 20 | | communications, questions, and
other matters relating to | 21 | | any application for, or an existing home mortgage
secured | 22 | | by residential real estate situated in Illinois
with | 23 | | respect to which the licensee is brokering, funding | 24 | | originating,
purchasing, or servicing. The management and | 25 | | operation of each full service
office must include | 26 | | observance of good business practices such as proper |
| | | HB2325 Enrolled | - 16 - | LRB103 26311 BMS 52672 b |
|
| 1 | | signage; adequate,
organized, and accurate books and | 2 | | records; ample phone lines, hours of
business, staff | 3 | | training and supervision, and provision for a mechanism to
| 4 | | resolve consumer inquiries, complaints, and problems. The | 5 | | Commissioner
shall issue regulations with regard to these | 6 | | requirements and shall include
an evaluation of compliance | 7 | | with this Section in his or her periodic
examination of | 8 | | each licensee. "Full service office" does not include a | 9 | | remote location. | 10 | | (s) "Purchasing" shall mean the purchase of | 11 | | conventional or
government-insured mortgage loans secured | 12 | | by residential real estate
situated in Illinois from | 13 | | either the lender or from the secondary market. | 14 | | (t) "Borrower" shall mean the person or persons who | 15 | | seek the services of
a loan broker, originator, or lender. | 16 | | (u) "Originating" shall mean the issuing of | 17 | | commitments for and funding of
residential mortgage loans. | 18 | | (v) "Loan brokerage agreement" shall mean a written | 19 | | agreement in which a
broker or loan broker agrees to do | 20 | | either of the following: | 21 | | (1) obtain a residential mortgage loan for the | 22 | | borrower or assist the
borrower in obtaining a | 23 | | residential mortgage loan; or | 24 | | (2) consider making a residential mortgage loan to | 25 | | the borrower. | 26 | | (w) "Advertisement" shall mean the attempt by |
| | | HB2325 Enrolled | - 17 - | LRB103 26311 BMS 52672 b |
|
| 1 | | publication,
dissemination, or circulation to induce, | 2 | | directly or indirectly,
any person to enter into a | 3 | | residential mortgage loan agreement or
residential | 4 | | mortgage loan brokerage agreement relative to a
mortgage | 5 | | secured by residential real estate situated in Illinois. | 6 | | (x) (Blank). | 7 | | (y) "Government-insured mortgage loan" shall mean any | 8 | | mortgage loan made
on the security of residential real | 9 | | estate insured by the Department of
Housing and Urban | 10 | | Development or Farmers Home Loan Administration, or
| 11 | | guaranteed by the Veterans Administration. | 12 | | (z) "Annual audit" shall mean a certified audit of the | 13 | | licensee's books and
records and systems of internal | 14 | | control performed by a certified public
accountant in | 15 | | accordance with generally accepted accounting principles
| 16 | | and generally accepted auditing standards. | 17 | | (aa) "Financial institution" shall mean a savings and | 18 | | loan
association, savings bank, credit union, or a bank | 19 | | organized under the
laws of Illinois or a savings and loan | 20 | | association, savings bank,
credit union or a bank | 21 | | organized under the laws of the United States and
| 22 | | headquartered in Illinois. | 23 | | (bb) "Escrow agent" shall mean a third party, | 24 | | individual or entity
charged with the fiduciary obligation | 25 | | for holding escrow funds on a
residential mortgage loan | 26 | | pending final payout of those funds
in accordance with the |
| | | HB2325 Enrolled | - 18 - | LRB103 26311 BMS 52672 b |
|
| 1 | | terms of the residential mortgage loan. | 2 | | (cc) "Net worth" shall have the meaning ascribed | 3 | | thereto in Section 3-5
of this Act. | 4 | | (dd) "Affiliate" shall mean: | 5 | | (1) any entity that directly controls or is | 6 | | controlled by the licensee
and any other company that | 7 | | is directly affecting activities regulated by
this Act | 8 | | that is controlled by the company that controls the | 9 | | licensee; | 10 | | (2) any entity: | 11 | | (A) that is controlled, directly or | 12 | | indirectly, by a trust or otherwise,
by or for the | 13 | | benefit of shareholders who beneficially or | 14 | | otherwise
control, directly or indirectly, by | 15 | | trust or otherwise, the licensee or any
company | 16 | | that controls the licensee; or | 17 | | (B) a majority of the directors or trustees of | 18 | | which constitute a
majority of the persons holding | 19 | | any such office with the licensee or any
company | 20 | | that controls the licensee; | 21 | | (3) any company, including a real estate | 22 | | investment trust, that is
sponsored and advised on a | 23 | | contractual basis by the licensee or any
subsidiary or | 24 | | affiliate of the licensee. | 25 | | (ee) "First tier subsidiary" shall be defined by | 26 | | regulation
incorporating the comparable definitions used |
| | | HB2325 Enrolled | - 19 - | LRB103 26311 BMS 52672 b |
|
| 1 | | by the Office of the
Comptroller of the Currency and the | 2 | | Illinois Commissioner of Banks
and Real Estate. | 3 | | (ff) "Gross delinquency rate" means the quotient | 4 | | determined by dividing
(1) the sum of (i) the number of | 5 | | government-insured residential mortgage loans
funded or | 6 | | purchased by a licensee in the preceding calendar year | 7 | | that are
delinquent and (ii) the number of conventional | 8 | | residential mortgage loans
funded or purchased by the | 9 | | licensee in the preceding calendar year that are
| 10 | | delinquent by (2) the sum of (i) the number of | 11 | | government-insured residential
mortgage loans funded or | 12 | | purchased by the licensee in the preceding calendar
year | 13 | | and (ii) the number of conventional residential mortgage | 14 | | loans funded or
purchased by the licensee in the preceding | 15 | | calendar year. | 16 | | (gg) "Delinquency rate factor" means the factor set by | 17 | | rule of the
Commissioner that is multiplied by the average | 18 | | gross delinquency rate of
licensees, determined annually | 19 | | for the immediately preceding calendar year, for
the | 20 | | purpose of determining which licensees shall be examined | 21 | | by the
Commissioner pursuant to subsection (b) of Section | 22 | | 4-8 of this Act. | 23 | | (hh) (Blank). | 24 | | (ii) "Confidential supervisory information" means any | 25 | | report of examination, visitation, or investigation | 26 | | prepared by the Commissioner under this Act, any report of |
| | | HB2325 Enrolled | - 20 - | LRB103 26311 BMS 52672 b |
|
| 1 | | examination visitation, or investigation prepared by the | 2 | | state regulatory authority of another state that examines | 3 | | a licensee, any document or record prepared or obtained in | 4 | | connection with or relating to any examination, | 5 | | visitation, or investigation, and any record prepared or | 6 | | obtained by the Commissioner to the extent that the record | 7 | | summarizes or contains information derived from any | 8 | | report, document, or record described in this subsection. | 9 | | "Confidential supervisory information" does not include | 10 | | any information or record routinely prepared by a licensee | 11 | | and maintained in the ordinary course of business or any | 12 | | information or record that is required to be made publicly | 13 | | available pursuant to State or federal law or rule.
| 14 | | (jj) "Mortgage loan originator" means an individual | 15 | | who for compensation or gain or in the expectation of | 16 | | compensation or gain: | 17 | | (i) takes a residential mortgage loan application; | 18 | | or | 19 | | (ii) offers or negotiates terms of a residential | 20 | | mortgage loan. | 21 | | "Mortgage loan originator" includes an individual | 22 | | engaged in loan modification activities as defined in | 23 | | subsection (yy) of this Section. A mortgage loan | 24 | | originator engaged in loan modification activities shall | 25 | | report those activities to the Department of Financial and | 26 | | Professional Regulation in the manner provided by the |
| | | HB2325 Enrolled | - 21 - | LRB103 26311 BMS 52672 b |
|
| 1 | | Department; however, the Department shall not impose a fee | 2 | | for reporting, nor require any additional qualifications | 3 | | to engage in those activities beyond those provided | 4 | | pursuant to this Act for mortgage loan originators. | 5 | | "Mortgage loan originator" does not include an | 6 | | individual engaged solely as a loan processor or | 7 | | underwriter except as otherwise provided in subsection (d) | 8 | | of Section 7-1A of this Act. | 9 | | "Mortgage loan originator" does not include a person | 10 | | or entity that only performs real estate brokerage | 11 | | activities and is licensed in accordance with the Real | 12 | | Estate License Act of 2000, unless the person or entity is | 13 | | compensated by a lender, a mortgage broker, or other | 14 | | mortgage loan originator, or by any agent of that lender, | 15 | | mortgage broker, or other mortgage loan originator. | 16 | | "Mortgage loan originator" does not include a person | 17 | | or entity solely involved in extensions of credit relating | 18 | | to timeshare plans, as that term is defined in Section | 19 | | 101(53D) of Title 11, United States Code. | 20 | | (kk) "Depository institution" has the same meaning as | 21 | | in Section 3 of the Federal Deposit Insurance Act, and | 22 | | includes any credit union. | 23 | | (ll) "Dwelling" means a residential structure or | 24 | | mobile home which contains one to 4 family housing units, | 25 | | or individual units of condominiums or cooperatives. | 26 | | (mm) "Immediate family member" means a spouse, child, |
| | | HB2325 Enrolled | - 22 - | LRB103 26311 BMS 52672 b |
|
| 1 | | sibling, parent, grandparent, or grandchild, and includes | 2 | | step-parents, step-children, step-siblings, or adoptive | 3 | | relationships. | 4 | | (nn) "Individual" means a natural person. | 5 | | (oo) "Loan processor or underwriter" means an | 6 | | individual who performs clerical or support duties as an | 7 | | employee at the direction of and subject to the | 8 | | supervision and instruction of a person licensed, or | 9 | | exempt from licensing, under this Act. "Clerical or | 10 | | support duties" includes subsequent to the receipt of an | 11 | | application: | 12 | | (i) the receipt, collection, distribution, and | 13 | | analysis of information common for the processing or | 14 | | underwriting of a residential mortgage loan; and | 15 | | (ii) communicating with a consumer to obtain the | 16 | | information necessary for the processing or | 17 | | underwriting of a loan, to the extent that the | 18 | | communication does not include offering or negotiating | 19 | | loan rates or terms, or counseling consumers about | 20 | | residential mortgage loan rates or terms. An | 21 | | individual engaging solely in loan processor or | 22 | | underwriter activities shall not represent to the | 23 | | public, through advertising or other means of | 24 | | communicating or providing information, including the | 25 | | use of business cards, stationery, brochures, signs, | 26 | | rate lists, or other promotional items, that the |
| | | HB2325 Enrolled | - 23 - | LRB103 26311 BMS 52672 b |
|
| 1 | | individual can or will perform any of the activities | 2 | | of a mortgage loan originator. | 3 | | (pp) "Nationwide Multistate Licensing System and | 4 | | Registry" means a mortgage licensing system developed and | 5 | | maintained by the Conference of State Bank Supervisors and | 6 | | the American Association of Residential Mortgage | 7 | | Regulators for the licensing and registration of licensed | 8 | | mortgage loan originators. | 9 | | (qq) "Nontraditional mortgage product" means any | 10 | | mortgage product other than a 30-year fixed rate mortgage. | 11 | | (rr) "Person" means a natural person, corporation, | 12 | | company, limited liability company, partnership, or | 13 | | association. | 14 | | (ss) "Real estate brokerage activity" means any | 15 | | activity that involves offering or providing real estate | 16 | | brokerage services to the public, including: | 17 | | (1) acting as a real estate agent or real estate | 18 | | broker for a buyer, seller, lessor, or lessee of real | 19 | | property; | 20 | | (2) bringing together parties interested in the | 21 | | sale, purchase, lease, rental, or exchange of real | 22 | | property; | 23 | | (3) negotiating, on behalf of any party, any | 24 | | portion of a contract relating to the sale, purchase, | 25 | | lease, rental, or exchange of real property, other | 26 | | than in connection with providing financing with |
| | | HB2325 Enrolled | - 24 - | LRB103 26311 BMS 52672 b |
|
| 1 | | respect to any such transaction; | 2 | | (4) engaging in any activity for which a person | 3 | | engaged in the activity is required to be registered | 4 | | or licensed as a real estate agent or real estate | 5 | | broker under any applicable law; or | 6 | | (5) offering to engage in any activity, or act in | 7 | | any capacity, described in this subsection (ss). | 8 | | (tt) "Registered mortgage loan originator" means any | 9 | | individual that: | 10 | | (1) meets the definition of mortgage loan | 11 | | originator and is an employee of: | 12 | | (A) a depository institution; | 13 | | (B) a subsidiary that is: | 14 | | (i) owned and controlled by a depository | 15 | | institution; and | 16 | | (ii) regulated by a federal banking | 17 | | agency; or | 18 | | (C) an institution regulated by the Farm | 19 | | Credit Administration; and | 20 | | (2) is registered with, and maintains a unique | 21 | | identifier through, the Nationwide Multistate | 22 | | Licensing System and Registry. | 23 | | (uu) "Unique identifier" means a number or other | 24 | | identifier assigned by protocols established by the | 25 | | Nationwide Multistate Licensing System and Registry. | 26 | | (vv) "Residential mortgage license" means a license |
| | | HB2325 Enrolled | - 25 - | LRB103 26311 BMS 52672 b |
|
| 1 | | issued pursuant to Section 1-3, 2-2, or 2-6 of this Act. | 2 | | (ww) "Mortgage loan originator license" means a | 3 | | license issued pursuant to Section 7-1A, 7-3, or 7-6 of | 4 | | this Act. | 5 | | (xx) "Secretary" means the Secretary of the Department | 6 | | of Financial and Professional Regulation, or a person | 7 | | authorized by the Secretary or by this Act to act in the | 8 | | Secretary's stead. | 9 | | (yy) "Loan modification" means, for compensation or | 10 | | gain, either directly or indirectly offering or | 11 | | negotiating on behalf of a borrower or homeowner to adjust | 12 | | the terms of a residential mortgage loan in a manner not | 13 | | provided for in the original or previously modified | 14 | | mortgage loan. | 15 | | (zz) "Short sale facilitation" means, for compensation | 16 | | or gain, either directly or indirectly offering or | 17 | | negotiating on behalf of a borrower or homeowner to | 18 | | facilitate the sale of residential real estate subject to | 19 | | one or more residential mortgage loans or debts | 20 | | constituting liens on the property in which the proceeds | 21 | | from selling the residential real estate will fall short | 22 | | of the amount owed and the lien holders are contacted to | 23 | | agree to release their lien on the residential real estate | 24 | | and accept less than the full amount owed on the debt. | 25 | | (aaa) "Bona fide nonprofit organization" means an | 26 | | organization that is described in Section 501(c)(3) of the |
| | | HB2325 Enrolled | - 26 - | LRB103 26311 BMS 52672 b |
|
| 1 | | Internal Revenue Code, is exempt from federal income tax | 2 | | under Section 501(a) of the Internal Revenue Code, does | 3 | | not operate in a commercial context, and does all of the | 4 | | following: | 5 | | (1) Promotes affordable housing or provides home | 6 | | ownership education or similar services. | 7 | | (2) Conducts its activities in a manner that | 8 | | serves public or charitable purposes. | 9 | | (3) Receives funding and revenue and charges fees | 10 | | in a manner that does not create an incentive for | 11 | | itself or its employees to act other than in the best | 12 | | interests of its clients. | 13 | | (4) Compensates its employees in a manner that | 14 | | does not create an incentive for its employees to act | 15 | | other than in the best interests of its clients. | 16 | | (5) Provides to, or identifies for, the borrower | 17 | | residential mortgage loans with terms favorable to the | 18 | | borrower and comparable to residential mortgage loans | 19 | | and housing assistance provided under government | 20 | | housing assistance programs. | 21 | | (bbb) "Remote location" means a location other than a | 22 | | principal place of business or a full service office at | 23 | | which a mortgage loan originator of a licensee may conduct | 24 | | business. | 25 | | The Commissioner may define by rule and regulation any | 26 | | terms used
in this Act for the efficient and clear |
| | | HB2325 Enrolled | - 27 - | LRB103 26311 BMS 52672 b |
|
| 1 | | administration of this Act. | 2 | | (Source: P.A. 100-783, eff. 8-10-18; 100-851, eff. 8-14-18; | 3 | | 100-1153, eff. 12-19-18; 101-81, eff. 7-12-19.) | 4 | | (205 ILCS 635/3-11 new) | 5 | | Sec. 3-11. Remote location operations. Licensees may allow | 6 | | mortgage loan originators to work from a remote location if: | 7 | | (1) the licensee has written policies and procedures | 8 | | for the supervision of mortgage loan originators working | 9 | | from a remote location; | 10 | | (2) access to company platforms and customer | 11 | | information is in accordance with the licensee's | 12 | | comprehensive written information security plan; | 13 | | (3) no in-person customer interaction occurs at a | 14 | | mortgage originator's residence unless that residence is a | 15 | | licensed location; | 16 | | (4) physical records are not maintained at a remote | 17 | | location; | 18 | | (5) customer interactions and conversations about | 19 | | consumers will be in compliance with federal and State | 20 | | information security requirements, including applicable | 21 | | provisions under the federal Gramm-Leach-Bliley Act and | 22 | | the Safeguards Rule established by the Federal Trade | 23 | | Commission and set forth in 16 CFR Part 314, as such | 24 | | requirements may be amended from time to time; | 25 | | (6) mortgage loan originators working at a remote |
| | | HB2325 Enrolled | - 28 - | LRB103 26311 BMS 52672 b |
|
| 1 | | location access the company's secure systems, including a | 2 | | cloud-based system, directly from any out-of-office device | 3 | | the mortgage loan originator uses, including, but not | 4 | | limited to, a laptop, phone, desktop computer, or tablet, | 5 | | via a virtual private network or comparable system that | 6 | | ensures secure connectivity and requires passwords or | 7 | | other forms of authentication to access; | 8 | | (7) the licensee ensures that appropriate security | 9 | | updates, patches, or other alterations to the security of | 10 | | all devices used at remote locations are installed and | 11 | | maintained; | 12 | | (8) the licensee has an ability to remotely lock or | 13 | | erase company-related contents of any device or otherwise | 14 | | remotely limit all access to a company's secure systems; | 15 | | and | 16 | | (9) the Nationwide Multistate Licensing System and
| 17 | | Registry record of a loan originator that works from a | 18 | | remote location designates the principal place of business | 19 | | as the loan originator's registered location unless the | 20 | | loan originator elects another licensed branch office as a | 21 | | registered location.
|
|