Full Text of SB3177 097th General Assembly
SB3177eng 97TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning residential mortgages.
| 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 1-4, 2-2, 2-4, 3-2, 4-5, 4-8.2, | 6 | | 7-1A, 7-11, and 7-13 and by adding Section 2-3A as follows: | 7 | | (205 ILCS 635/1-4) | 8 | | Sec. 1-4. Definitions. | 9 | | (a) "Residential real property" or "residential real | 10 | | estate" shall mean any real property located in Illinois, upon | 11 | | which is constructed or intended to be constructed a dwelling. | 12 | | (b) "Making a residential mortgage loan" or "funding a | 13 | | residential mortgage
loan" shall mean for compensation or gain, | 14 | | either directly or indirectly,
advancing funds or making a | 15 | | commitment to advance funds to a loan applicant
for a | 16 | | residential mortgage loan. | 17 | | (c) "Soliciting, processing, placing, or negotiating a | 18 | | residential
mortgage loan" shall mean for compensation or gain, | 19 | | either directly or
indirectly, accepting or offering to accept | 20 | | an application for a
residential mortgage loan, assisting or | 21 | | offering to assist in the
processing of an application for a | 22 | | residential mortgage loan on behalf of a
borrower, or | 23 | | negotiating or offering to negotiate the terms or conditions
of |
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| 1 | | a residential mortgage loan with a lender on behalf of a | 2 | | borrower
including, but not limited to, the submission of | 3 | | credit packages for the
approval of lenders, the preparation of | 4 | | residential mortgage loan closing
documents, including a | 5 | | closing in the name of a broker. | 6 | | (d) "Exempt person or entity" shall mean the following: | 7 | | (1) (i) Any banking organization or foreign banking | 8 | | corporation
licensed by the Illinois Commissioner of Banks | 9 | | and Real Estate or the
United States Comptroller of the | 10 | | Currency to transact business in this
State; (ii) any | 11 | | national bank, federally chartered savings and loan
| 12 | | association, federal savings bank, federal credit union; | 13 | | (iii) any pension
trust, bank trust, or bank trust company; | 14 | | (iv) any bank, savings and loan
association, savings bank, | 15 | | or credit union organized under the laws of this
or any | 16 | | other state; (v) any Illinois Consumer Installment Loan Act | 17 | | licensee;
(vi) any insurance company authorized to | 18 | | transact business in this State;
(vii) any entity engaged | 19 | | solely in commercial mortgage lending; (viii) any
service | 20 | | corporation of a savings and loan association or savings | 21 | | bank organized
under the laws of this State or the service | 22 | | corporation of a federally
chartered savings and loan | 23 | | association or savings bank having
its principal place of | 24 | | business in this State, other than a service
corporation | 25 | | licensed or entitled to reciprocity under the Real Estate
| 26 | | License Act of 2000; or (ix) any first tier subsidiary of a
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| 1 | | bank, the charter of which is issued under the Illinois | 2 | | Banking Act
by the Illinois Commissioner of Banks and Real | 3 | | Estate,
or the first tier subsidiary of a bank chartered by | 4 | | the United States
Comptroller of the Currency and that has | 5 | | its principal place of business
in this State, provided | 6 | | that the first tier subsidiary is regularly
examined by the | 7 | | Illinois Commissioner of Banks and Real Estate
or the | 8 | | Comptroller of the Currency, or a consumer compliance | 9 | | examination is
regularly conducted by the Federal Reserve | 10 | | Board. | 11 | | (1.5) Any employee of a person or entity mentioned in
| 12 | | item (1) of this subsection, when acting for such person or | 13 | | entity, or any registered mortgage loan originator when | 14 | | acting for an entity described in subsection (tt) of this | 15 | | Section. | 16 | | (1.8) Any person or entity that does not originate | 17 | | mortgage loans in the ordinary course of business, but | 18 | | makes or acquires residential mortgage loans with his or | 19 | | her own funds for his or her or its own investment without | 20 | | intent to make, acquire, or resell more than 3 residential | 21 | | mortgage loans in any one calendar year. | 22 | | (2) (Blank). | 23 | | (3) Any person employed by a licensee to assist in the | 24 | | performance of
the residential mortgage licensee's | 25 | | activities regulated by this Act who is compensated in any | 26 | | manner by
only one licensee. |
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| 1 | | (4) (Blank). | 2 | | (5) Any individual, corporation, partnership, or other | 3 | | entity that
originates, services, or brokers residential | 4 | | mortgage loans, as these
activities are defined in this | 5 | | Act, and who or which receives no
compensation for those | 6 | | activities, subject to the Commissioner's
regulations and | 7 | | the federal Secure and Fair Enforcement for Mortgage | 8 | | Licensing Act of 2008 and the rules promulgated under that | 9 | | Act with regard to the nature and amount of compensation. | 10 | | (6) (Blank). | 11 | | (e) "Licensee" or "residential mortgage licensee" shall | 12 | | mean a person,
partnership, association, corporation, or any | 13 | | other entity who or which is
licensed pursuant to this Act to | 14 | | engage in the activities regulated by
this Act. | 15 | | (f) "Mortgage loan" "residential mortgage loan" or "home
| 16 | | mortgage loan" shall mean any loan primarily for personal, | 17 | | family, or household use that is secured by a mortgage, deed of | 18 | | trust, or other equivalent consensual security interest on a | 19 | | dwelling as defined in Section 103(v) of the federal Truth in | 20 | | Lending Act, or residential real estate upon which is | 21 | | constructed or intended to be constructed a dwelling. | 22 | | (g) "Lender" shall mean any person, partnership, | 23 | | association,
corporation, or any other entity who either lends | 24 | | or invests money in
residential mortgage loans. | 25 | | (h) "Ultimate equitable owner" shall mean a person who, | 26 | | directly
or indirectly, owns or controls an ownership interest |
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| 1 | | in a corporation,
foreign corporation, alien business | 2 | | organization, trust, or any other form
of business organization | 3 | | regardless of whether the person owns or controls
the ownership | 4 | | interest through one or more persons or one or more proxies,
| 5 | | powers of attorney, nominees, corporations, associations, | 6 | | partnerships,
trusts, joint stock companies, or other entities | 7 | | or devices, or any
combination thereof. | 8 | | (i) "Residential mortgage financing transaction" shall | 9 | | mean the negotiation,
acquisition, sale, or arrangement for or | 10 | | the offer to negotiate, acquire,
sell, or arrange for, a | 11 | | residential mortgage loan or residential mortgage
loan | 12 | | commitment. | 13 | | (j) "Personal residence address" shall mean a street | 14 | | address and shall
not include a post office box number. | 15 | | (k) "Residential mortgage loan commitment" shall mean a | 16 | | contract for
residential mortgage loan financing. | 17 | | (l) "Party to a residential mortgage financing | 18 | | transaction" shall mean a
borrower, lender, or loan broker in a | 19 | | residential mortgage financing
transaction. | 20 | | (m) "Payments" shall mean payment of all or any of the | 21 | | following:
principal, interest and escrow reserves for taxes, | 22 | | insurance and other related
reserves, and reimbursement for | 23 | | lender advances. | 24 | | (n) "Commissioner" shall mean the Commissioner of Banks and | 25 | | Real Estate, except that, beginning on April 6, 2009 (the | 26 | | effective date of Public Act 95-1047), all references in this |
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| 1 | | Act to the Commissioner of Banks and Real Estate are deemed, in | 2 | | appropriate contexts, to be references to the Secretary of | 3 | | Financial and Professional Regulation, or his or her designee, | 4 | | including the Director of the Division of Banking of the | 5 | | Department of Financial and Professional Regulation. | 6 | | (n-1) "Director" shall mean the Director of the Division of | 7 | | Banking of the Department of Financial and Professional | 8 | | Regulation, except that, beginning on July 31, 2009 (the | 9 | | effective date of Public Act 96-112), all references in this | 10 | | Act to the Director are deemed, in appropriate contexts, to be | 11 | | the Secretary of Financial and Professional Regulation, or his | 12 | | or her designee, including the Director of the Division of | 13 | | Banking of the Department of Financial and Professional | 14 | | Regulation. | 15 | | (o) "Loan brokering", "brokering", or "brokerage service" | 16 | | shall mean the act
of helping to obtain from another entity, | 17 | | for a borrower, a loan secured by
residential real estate | 18 | | situated in Illinois or assisting a borrower in
obtaining a | 19 | | loan secured by residential real estate situated in Illinois in
| 20 | | return for consideration to be paid by either the borrower or | 21 | | the lender
including, but not limited to, contracting for the | 22 | | delivery of residential
mortgage loans to a third party lender | 23 | | and soliciting, processing, placing,
or negotiating | 24 | | residential mortgage loans. | 25 | | (p) "Loan broker" or "broker" shall mean a person, | 26 | | partnership,
association, corporation, or limited liability |
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| 1 | | company, other than
those persons, partnerships,
associations, | 2 | | corporations, or limited liability companies exempted
from | 3 | | licensing pursuant to Section
1-4, subsection (d), of this Act, | 4 | | who performs the activities described
in subsections (c) , and | 5 | | (o) , and (yy) of this Section. | 6 | | (q) "Servicing" shall mean the collection or remittance for | 7 | | or the
right or obligation to collect or remit for any lender, | 8 | | noteowner,
noteholder, or for a licensee's own account, of | 9 | | payments, interests,
principal, and trust items such as hazard | 10 | | insurance and taxes on a
residential mortgage loan in | 11 | | accordance with the terms of the residential
mortgage loan; and | 12 | | includes loan payment follow-up, delinquency loan
follow-up, | 13 | | loan analysis and any notifications to the borrower that are
| 14 | | necessary to enable the borrower to keep the loan current and | 15 | | in good standing. "Servicing" includes management of | 16 | | third-party entities acting on behalf of a residential mortgage | 17 | | licensee for the collection of delinquent payments and the use | 18 | | by such third-party entities of said licensee's servicing | 19 | | records or information, including their use in foreclosure. | 20 | | (r) "Full service office" shall mean an office, provided by | 21 | | the licensee and not subleased from the licensee's employees, | 22 | | and staff in Illinois
reasonably adequate to handle efficiently | 23 | | communications, questions, and
other matters relating to any | 24 | | application for, or an existing home mortgage
secured by | 25 | | residential real estate situated in Illinois
with respect to | 26 | | which the licensee is brokering, funding originating,
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| 1 | | purchasing, or servicing. The management and operation of each | 2 | | full service
office must include observance of good business | 3 | | practices such as proper signage; adequate,
organized, and | 4 | | accurate books and records; ample phone lines, hours of
| 5 | | business, staff training and supervision, and provision for a | 6 | | mechanism to
resolve consumer inquiries, complaints, and | 7 | | problems. The Commissioner
shall issue regulations with regard | 8 | | to these requirements and shall include
an evaluation of | 9 | | compliance with this Section in his or her periodic
examination | 10 | | of each licensee. | 11 | | (s) "Purchasing" shall mean the purchase of conventional or
| 12 | | government-insured mortgage loans secured by residential real | 13 | | estate
situated in Illinois from either the lender or from the | 14 | | secondary market. | 15 | | (t) "Borrower" shall mean the person or persons who seek | 16 | | the services of
a loan broker, originator, or lender. | 17 | | (u) "Originating" shall mean the issuing of commitments for | 18 | | and funding of
residential mortgage loans. | 19 | | (v) "Loan brokerage agreement" shall mean a written | 20 | | agreement in which a
broker or loan broker agrees to do either | 21 | | of the following: | 22 | | (1) obtain a residential mortgage loan for the borrower | 23 | | or assist the
borrower in obtaining a residential mortgage | 24 | | loan; or | 25 | | (2) consider making a residential mortgage loan to the | 26 | | borrower. |
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| 1 | | (w) "Advertisement" shall mean the attempt by publication,
| 2 | | dissemination, or circulation to induce, directly or | 3 | | indirectly,
any person to enter into a residential mortgage | 4 | | loan agreement or
residential mortgage loan brokerage | 5 | | agreement relative to a
mortgage secured by residential real | 6 | | estate situated in Illinois. | 7 | | (x) "Residential Mortgage Board" shall mean the | 8 | | Residential Mortgage
Board created in Section 1-5 of this Act. | 9 | | (y) "Government-insured mortgage loan" shall mean any | 10 | | mortgage loan made
on the security of residential real estate | 11 | | insured by the Department of
Housing and Urban Development or | 12 | | Farmers Home Loan Administration, or
guaranteed by the Veterans | 13 | | Administration. | 14 | | (z) "Annual audit" shall mean a certified audit of the | 15 | | licensee's books and
records and systems of internal control | 16 | | performed by a certified public
accountant in accordance with | 17 | | generally accepted accounting principles
and generally | 18 | | accepted auditing standards. | 19 | | (aa) "Financial institution" shall mean a savings and loan
| 20 | | association, savings bank, credit union, or a bank organized | 21 | | under the
laws of Illinois or a savings and loan association, | 22 | | savings bank,
credit union or a bank organized under the laws | 23 | | of the United States and
headquartered in Illinois. | 24 | | (bb) "Escrow agent" shall mean a third party, individual or | 25 | | entity
charged with the fiduciary obligation for holding escrow | 26 | | funds on a
residential mortgage loan pending final payout of |
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| 1 | | those funds
in accordance with the terms of the residential | 2 | | mortgage loan. | 3 | | (cc) "Net worth" shall have the meaning ascribed thereto in | 4 | | Section 3-5
of this Act. | 5 | | (dd) "Affiliate" shall mean: | 6 | | (1) any entity that directly controls or is controlled | 7 | | by the licensee
and any other company that is directly | 8 | | affecting activities regulated by
this Act that is | 9 | | controlled by the company that controls the licensee; | 10 | | (2) any entity: | 11 | | (A) that is controlled, directly or indirectly, by | 12 | | a trust or otherwise,
by or for the benefit of | 13 | | shareholders who beneficially or otherwise
control, | 14 | | directly or indirectly, by trust or otherwise, the | 15 | | licensee or any
company that controls the licensee; or | 16 | | (B) a majority of the directors or trustees of | 17 | | which constitute a
majority of the persons holding any | 18 | | such office with the licensee or any
company that | 19 | | controls the licensee; | 20 | | (3) any company, including a real estate investment | 21 | | trust, that is
sponsored and advised on a contractual basis | 22 | | by the licensee or any
subsidiary or affiliate of the | 23 | | licensee. | 24 | | The Commissioner may define by rule and regulation any | 25 | | terms used
in this Act for the efficient and clear | 26 | | administration of this Act. |
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| 1 | | (ee) "First tier subsidiary" shall be defined by regulation
| 2 | | incorporating the comparable definitions used by the Office of | 3 | | the
Comptroller of the Currency and the Illinois Commissioner | 4 | | of Banks
and Real Estate. | 5 | | (ff) "Gross delinquency rate" means the quotient | 6 | | determined by dividing
(1) the sum of (i) the number of | 7 | | government-insured residential mortgage loans
funded or | 8 | | purchased by a licensee in the preceding calendar year that are
| 9 | | delinquent and (ii) the number of conventional residential | 10 | | mortgage loans
funded or purchased by the licensee in the | 11 | | preceding calendar year that are
delinquent by (2) the sum of | 12 | | (i) the number of government-insured residential
mortgage | 13 | | loans funded or purchased by the licensee in the preceding | 14 | | calendar
year and (ii) the number of conventional residential | 15 | | mortgage loans funded or
purchased by the licensee in the | 16 | | preceding calendar year. | 17 | | (gg) "Delinquency rate factor" means the factor set by rule | 18 | | of the
Commissioner that is multiplied by the average gross | 19 | | delinquency rate of
licensees, determined annually for the | 20 | | immediately preceding calendar year, for
the purpose of | 21 | | determining which licensees shall be examined by the
| 22 | | Commissioner pursuant to subsection (b) of Section 4-8 of this | 23 | | Act. | 24 | | (hh) "Loan originator" means any natural person who, for | 25 | | compensation or in
the expectation of compensation, either | 26 | | directly or indirectly makes, offers to
make, solicits, places, |
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| 1 | | or negotiates a residential mortgage loan. This definition | 2 | | applies only to Section 7-1 of this Act. | 3 | | (ii) "Confidential supervisory information" means any | 4 | | report of examination, visitation, or investigation prepared | 5 | | by the Commissioner under this Act, any report of examination | 6 | | visitation, or investigation prepared by the state regulatory | 7 | | authority of another state that examines a licensee, any | 8 | | document or record prepared or obtained in connection with or | 9 | | relating to any examination, visitation, or investigation, and | 10 | | any record prepared or obtained by the Commissioner to the | 11 | | extent that the record summarizes or contains information | 12 | | derived from any report, document, or record described in this | 13 | | subsection. "Confidential supervisory information" does not | 14 | | include any information or record routinely prepared by a | 15 | | licensee and maintained in the ordinary course of business or | 16 | | any information or record that is required to be made publicly | 17 | | available pursuant to State or federal law or rule.
| 18 | | (jj) "Mortgage loan originator" means an individual who for | 19 | | compensation or gain or in the expectation of compensation or | 20 | | gain: | 21 | | (i) takes a residential mortgage loan application; or | 22 | | (ii) offers or negotiates terms of a residential | 23 | | mortgage loan. | 24 | | "Mortgage loan originator" includes an individual engaged | 25 | | in loan modification activities as defined in subsection (yy) | 26 | | of this Section. A mortgage loan originator engaged in loan |
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| 1 | | modification activities shall report those activities to the | 2 | | Department of Financial and Professional Regulation in the | 3 | | manner provided by the Department; however, the Department | 4 | | shall not impose a fee for reporting, nor require any | 5 | | additional qualifications to engage in those activities beyond | 6 | | those provided pursuant to this Act for mortgage loan | 7 | | originators. | 8 | | "Mortgage loan originator" does not include an individual | 9 | | engaged solely as a loan processor or underwriter except as | 10 | | otherwise provided in subsection (d) of Section 7-1A of this | 11 | | Act. | 12 | | "Mortgage loan originator" does not include a person or | 13 | | entity that only performs real estate brokerage activities and | 14 | | is licensed in accordance with the Real Estate License Act of | 15 | | 2000, unless the person or entity is compensated by a lender, a | 16 | | mortgage broker, or other mortgage loan originator, or by any | 17 | | agent of that lender, mortgage broker, or other mortgage loan | 18 | | originator. | 19 | | "Mortgage loan originator" does not include a person or | 20 | | entity solely involved in extensions of credit relating to | 21 | | timeshare plans, as that term is defined in Section 101(53D) of | 22 | | Title 11, United States Code. | 23 | | (kk) "Depository institution" has the same meaning as in | 24 | | Section 3 of the Federal Deposit Insurance Act, and includes | 25 | | any credit union. | 26 | | (ll) "Dwelling" means a residential structure or mobile |
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| 1 | | home which contains one to 4 family housing units, or | 2 | | individual units of condominiums or cooperatives. | 3 | | (mm) "Immediate family member" means a spouse, child, | 4 | | sibling, parent, grandparent, or grandchild, and includes | 5 | | step-parents, step-children, step-siblings, or adoptive | 6 | | relationships. | 7 | | (nn) "Individual" means a natural person. | 8 | | (oo) "Loan processor or underwriter" means an individual | 9 | | who performs clerical or support duties as an employee at the | 10 | | direction of and subject to the supervision and instruction of | 11 | | a person licensed, or exempt from licensing, under this Act. | 12 | | "Clerical or support duties" includes subsequent to the receipt | 13 | | of an application: | 14 | | (i) the receipt, collection, distribution, and | 15 | | analysis of information common for the processing or | 16 | | underwriting of a residential mortgage loan; and | 17 | | (ii) communicating with a consumer to obtain the | 18 | | information necessary for the processing or underwriting | 19 | | of a loan, to the extent that the communication does not | 20 | | include offering or negotiating loan rates or terms, or | 21 | | counseling consumers about residential mortgage loan rates | 22 | | or terms. An individual engaging solely in loan processor | 23 | | or underwriter activities shall not represent to the | 24 | | public, through advertising or other means of | 25 | | communicating or providing information, including the use | 26 | | of business cards, stationery, brochures, signs, rate |
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| 1 | | lists, or other promotional items, that the individual can | 2 | | or will perform any of the activities of a mortgage loan | 3 | | originator. | 4 | | (pp) "Nationwide Mortgage Licensing System and Registry" | 5 | | means a mortgage licensing system developed and maintained by | 6 | | the Conference of State Bank Supervisors and the American | 7 | | Association of Residential Mortgage Regulators for the | 8 | | licensing and registration of licensed mortgage loan | 9 | | originators. | 10 | | (qq) "Nontraditional mortgage product" means any mortgage | 11 | | product other than a 30-year fixed rate mortgage. | 12 | | (rr) "Person" means a natural person, corporation, | 13 | | company, limited liability company, partnership, or | 14 | | association. | 15 | | (ss) "Real estate brokerage activity" means any activity | 16 | | that involves offering or providing real estate brokerage | 17 | | services to the public, including: | 18 | | (1) acting as a real estate agent or real estate broker | 19 | | for a buyer, seller, lessor, or lessee of real property; | 20 | | (2) bringing together parties interested in the sale, | 21 | | purchase, lease, rental, or exchange of real property; | 22 | | (3) negotiating, on behalf of any party, any portion of | 23 | | a contract relating to the sale, purchase, lease, rental, | 24 | | or exchange of real property, other than in connection with | 25 | | providing financing with respect to any such transaction; | 26 | | (4) engaging in any activity for which a person engaged |
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| 1 | | in the activity is required to be registered or licensed as | 2 | | a real estate agent or real estate broker under any | 3 | | applicable law; or | 4 | | (5) offering to engage in any activity, or act in any | 5 | | capacity, described in this subsection (ss). | 6 | | (tt) "Registered mortgage loan originator" means any | 7 | | individual that: | 8 | | (1) meets the definition of mortgage loan originator | 9 | | and is an employee of: | 10 | | (A) a depository institution; | 11 | | (B) a subsidiary that is: | 12 | | (i) owned and controlled by a depository | 13 | | institution; and | 14 | | (ii) regulated by a federal banking agency; or | 15 | | (C) an institution regulated by the Farm Credit | 16 | | Administration; and | 17 | | (2) is registered with, and maintains a unique | 18 | | identifier through, the Nationwide Mortgage Licensing | 19 | | System and Registry. | 20 | | (uu) "Unique identifier" means a number or other identifier | 21 | | assigned by protocols established by the Nationwide Mortgage | 22 | | Licensing System and Registry. | 23 | | (vv) "Residential mortgage license" means a license issued | 24 | | pursuant to Section 1-3, 2-2, or 2-6 of this Act. | 25 | | (ww) "Mortgage loan originator license" means a license | 26 | | issued pursuant to Section 7-1A, 7-3, or 7-6 of this Act. |
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| 1 | | (xx) "Secretary" means the Secretary of the Department of | 2 | | Financial and Professional Regulation, or a person authorized | 3 | | by the Secretary or by this Act to act in the Secretary's | 4 | | stead. | 5 | | (yy) "Loan modification" means, for compensation or gain, | 6 | | either directly or indirectly offering or negotiating on behalf | 7 | | of a borrower or homeowner to adjust the terms of a residential | 8 | | mortgage loan in a manner not provided for in the original or | 9 | | previously modified mortgage loan. | 10 | | (zz) "Short sale facilitation" means, for compensation or | 11 | | gain, either directly or indirectly offering or negotiating on | 12 | | behalf of a borrower or homeowner to facilitate the sale of | 13 | | residential real estate subject to one or more residential | 14 | | mortgage loans or debts constituting liens on the property in | 15 | | which the proceeds from selling the residential real estate | 16 | | will fall short of the amount owed and the lien holders are | 17 | | contacted to agree to release their lien on the residential | 18 | | real estate and accept less than the full amount owed on the | 19 | | debt. | 20 | | (Source: P.A. 96-112, eff. 7-31-09; 96-1000, eff. 7-2-10; | 21 | | 96-1216, eff. 1-1-11; 97-143, eff. 7-14-11.)
| 22 | | (205 ILCS 635/2-2)
| 23 | | Sec. 2-2. Application process; investigation; fee.
| 24 | | (a) The Secretary shall issue a license upon completion of | 25 | | all of the
following:
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| 1 | | (1) The filing of an application for license with the | 2 | | Director or the Nationwide Mortgage Licensing System and | 3 | | Registry as approved by the Director.
| 4 | | (2) The filing with the Secretary of a listing of | 5 | | judgments entered
against, and bankruptcy petitions by, | 6 | | the license applicant for the
preceding 10 years.
| 7 | | (3) The payment, in certified funds, of
investigation | 8 | | and application fees, the total of which shall be in an
| 9 | | amount equal to $2,700 $2,043 annually. To comply with the | 10 | | common renewal date and requirements of the Nationwide | 11 | | Mortgage Licensing System and Registry, the term of initial | 12 | | licenses may be extended or shortened with applicable fees | 13 | | prorated or combined accordingly.
| 14 | | (4) Except for a broker applying to renew a license, | 15 | | the filing of an
audited balance sheet including all | 16 | | footnotes prepared by a certified public
accountant in | 17 | | accordance with generally accepted accounting principles | 18 | | and
generally accepted auditing principles which evidences | 19 | | that the applicant meets
the net worth requirements of | 20 | | Section 3-5.
| 21 | | (5) The filing of proof satisfactory to the | 22 | | Commissioner that the
applicant, the members thereof if the | 23 | | applicant is a partnership or
association, the members or | 24 | | managers thereof that retain any authority or
| 25 | | responsibility under the operating agreement if the | 26 | | applicant is a limited
liability company, or the officers |
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| 1 | | thereof if the applicant
is a corporation have 3 years | 2 | | experience preceding application
in real estate finance. | 3 | | Instead of this requirement, the applicant and the
| 4 | | applicant's officers or members, as applicable, may
| 5 | | satisfactorily complete a program of education in real | 6 | | estate finance and
fair lending, as
approved by the | 7 | | Commissioner, prior to receiving the
initial license.
The | 8 | | Commissioner shall promulgate rules regarding proof of | 9 | | experience
requirements and educational requirements and | 10 | | the satisfactory completion of
those requirements. The | 11 | | Commissioner may establish by rule a list of duly
licensed | 12 | | professionals and others who may be exempt from this | 13 | | requirement.
| 14 | | (6) An investigation of the averments required by | 15 | | Section 2-4, which
investigation must allow the | 16 | | Commissioner to issue positive findings stating
that the | 17 | | financial responsibility, experience, character, and | 18 | | general fitness
of the license applicant and of the members | 19 | | thereof if the license applicant is
a partnership or | 20 | | association, of the officers and directors thereof if the
| 21 | | license applicant is a corporation, and of the managers and | 22 | | members that retain
any authority or responsibility under | 23 | | the operating agreement if the license
applicant is a | 24 | | limited liability company are such as to command the | 25 | | confidence
of the community and to warrant belief that the | 26 | | business will be operated
honestly, fairly and efficiently |
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| 1 | | within the purpose of this Act. If the
Commissioner shall | 2 | | not so find, he or she shall not issue such license, and he
| 3 | | or she shall notify the license applicant of the denial. | 4 | | The Commissioner may impose conditions on a license if the | 5 | | Commissioner determines that the conditions are necessary or | 6 | | appropriate. These conditions shall be imposed in writing and | 7 | | shall continue in effect for the period prescribed by the | 8 | | Commissioner.
| 9 | | (b) All licenses shall be issued to the license applicant.
| 10 | | Upon receipt of such license, a residential mortgage | 11 | | licensee shall be
authorized to engage in the business | 12 | | regulated by this Act. Such license
shall remain in full force | 13 | | and effect until it expires without renewal, is
surrendered by | 14 | | the licensee or revoked or suspended as hereinafter provided.
| 15 | | (Source: P.A. 95-1047, eff. 4-6-09; 96-112, eff. 7-31-09; | 16 | | 96-1000, eff. 7-2-10.)
| 17 | | (205 ILCS 635/2-3A new) | 18 | | Sec. 2-3A. Residential mortgage license application and | 19 | | issuance. | 20 | | (a) Applicants for a license shall apply in a form | 21 | | prescribed by the Director. Each form shall contain content as | 22 | | set forth by rule, regulation, instruction, or procedure of the | 23 | | Director and may be changed or updated as necessary by the | 24 | | Director in order to carry out the purposes of this Act. | 25 | | (b) In order to fulfill the purposes of this Act, the |
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| 1 | | Director is authorized to establish relationships or contracts | 2 | | with the Nationwide Mortgage Licensing System and Registry or | 3 | | other entities designated by the Nationwide Mortgage Licensing | 4 | | System and Registry to collect and maintain records and process | 5 | | transaction fees or other fees related to licensees or other | 6 | | persons subject to this Act. | 7 | | (c) In connection with an application for licensing, the | 8 | | applicant may be required, at a minimum, to furnish to the | 9 | | Nationwide Mortgage Licensing System and Registry information | 10 | | concerning the applicant's identity, including: | 11 | | (1) fingerprints for submission to the Federal Bureau | 12 | | of Investigation or any governmental agency or entity | 13 | | authorized to receive such information for a State, | 14 | | national, and international criminal history background | 15 | | check; and | 16 | | (2) personal history and experience in a form
| 17 | | prescribed by the Nationwide Mortgage Licensing System and | 18 | | Registry, including the submission of authorization for | 19 | | the Nationwide Mortgage Licensing System and Registry and | 20 | | the Director to obtain: | 21 | | (A) an independent credit report obtained from a
| 22 | | consumer reporting agency described in Section 603(p) | 23 | | of the Fair Credit Reporting Act (15 U.S.C. 1681a(p)); | 24 | | and | 25 | | (B) information related to any administrative,
| 26 | | civil, or criminal findings by any governmental |
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| 1 | | jurisdiction. | 2 | | (d) For the purposes of this Section, and in order to | 3 | | reduce the points of contact that the Federal Bureau of | 4 | | Investigation may have to maintain for purposes of subsection | 5 | | (c) of this Section, the Director may use the Nationwide | 6 | | Mortgage Licensing System and Registry as a channeling agent | 7 | | for requesting information from and distributing information | 8 | | to the Department of Justice or any governmental agency. | 9 | | (e) For the purposes of this Section, and in order to | 10 | | reduce the points of contact that the Director may have to | 11 | | maintain for purposes of item (2) of subsection (c) of this | 12 | | Section, the Director may use the Nationwide Mortgage Licensing | 13 | | System and Registry as a channeling agent for requesting and | 14 | | distributing information to and from any source so directed by | 15 | | the Director.
| 16 | | (205 ILCS 635/2-4) (from Ch. 17, par. 2322-4)
| 17 | | Sec. 2-4. Averments of Licensee. Each application for | 18 | | license or for the
renewal of a license shall be accompanied by | 19 | | the following averments stating
that the applicant:
| 20 | | (a) Will maintain at least one full service office | 21 | | within the
State of Illinois pursuant to Section 3-4 of | 22 | | this Act;
| 23 | | (b) Will maintain staff reasonably adequate to meet the | 24 | | requirements of
Section 3-4 of this Act;
| 25 | | (c) Will keep and maintain for 36 months the same |
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| 1 | | written records
as required by the federal Equal Credit | 2 | | Opportunity Act, and any other
information required by | 3 | | regulations of the Commissioner regarding any home
| 4 | | mortgage in the course of the conduct of its residential | 5 | | mortgage business;
| 6 | | (d) Will file with the Commissioner or Nationwide | 7 | | Mortgage Licensing System and Registry as applicable, when | 8 | | due, any report or reports
which it is required to file | 9 | | under any of the provisions of this Act;
| 10 | | (e) Will not engage, whether as principal or agent, in | 11 | | the practice of
rejecting residential mortgage | 12 | | applications without reasonable cause, or
varying terms or | 13 | | application procedures without reasonable cause, for home
| 14 | | mortgages on real estate within any specific geographic | 15 | | area from the terms
or procedures generally provided by the | 16 | | licensee within other geographic
areas of the State;
| 17 | | (f) Will not engage in fraudulent home mortgage | 18 | | underwriting practices;
| 19 | | (g) Will not make payment, whether directly or | 20 | | indirectly, of any kind
to any in house or fee appraiser of | 21 | | any government or private money lending
agency with which | 22 | | an application for a home mortgage has been filed for the
| 23 | | purpose of influencing the independent judgment of the | 24 | | appraiser with respect
to the value of any real estate | 25 | | which is to be covered by such home mortgage;
| 26 | | (h) Has filed tax returns (State and Federal) for the |
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| 1 | | past 3
years or filed with the Commissioner an accountant's | 2 | | or attorney's
statement as to why no return was filed;
| 3 | | (i) Will not engage in any discrimination or redlining | 4 | | activities
prohibited by Section 3-8 of this Act;
| 5 | | (j) Will not knowingly make any false promises likely | 6 | | to influence or
persuade, or pursue a course of | 7 | | misrepresentation and false promises
through agents, | 8 | | solicitors, advertising or otherwise;
| 9 | | (k) Will not knowingly misrepresent, circumvent or | 10 | | conceal, through
whatever subterfuge or device, any of the | 11 | | material particulars or the
nature thereof, regarding a | 12 | | transaction to which it is a party to the
injury of another | 13 | | party thereto;
| 14 | | (l) Will disburse funds in accordance with its | 15 | | agreements;
| 16 | | (m) Has not committed a crime against the law of this | 17 | | State, any other
state or of the United States, involving | 18 | | moral turpitude, fraudulent or
dishonest dealing, and that | 19 | | no final judgment has been entered against it in
a civil | 20 | | action upon grounds of fraud, misrepresentation or deceit | 21 | | which has
not been previously reported to the Commissioner;
| 22 | | (n) Will account or deliver to the owner upon request | 23 | | any personal property such as
money, fund, deposit, check, | 24 | | draft, mortgage, other document or thing of
value which it | 25 | | is not in law or equity entitled to retain under the
| 26 | | circumstances;
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| 1 | | (o) Has not engaged in any conduct which would be cause | 2 | | for denial of a
license;
| 3 | | (p) Has not become insolvent;
| 4 | | (q) Has not submitted an application for a license | 5 | | under this Act which
contains a material misstatement;
| 6 | | (r) Has not demonstrated by course of conduct, | 7 | | negligence or incompetence
in performing any act for which | 8 | | it is required to hold a license under this
Act;
| 9 | | (s) Will advise the Commissioner in writing, or the | 10 | | Nationwide Mortgage Licensing System and Registry as | 11 | | applicable, of any changes to the
information submitted on | 12 | | the most recent application for license within 30
days of | 13 | | said change. The written notice must be signed in the same | 14 | | form as
the application for license being amended;
| 15 | | (t) Will comply with the provisions of this Act, or | 16 | | with any lawful
order, rule or regulation made or issued | 17 | | under the provisions of this Act;
| 18 | | (u) Will submit to periodic examination by the | 19 | | Commissioner as required
by this Act;
| 20 | | (v) Will advise the Commissioner in writing of | 21 | | judgments entered
against, and bankruptcy petitions by, | 22 | | the license applicant within 5
days of occurrence;
| 23 | | (w) Will advise the Commissioner in writing within 30 | 24 | | days of any request made to a licensee under this Act to | 25 | | repurchase a loan in a manner that completely and clearly | 26 | | identifies to whom the request was made, the loans |
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| 1 | | involved, and the reason therefor;
| 2 | | (x) Will advise the Commissioner in writing within 30 | 3 | | days of any request from any entity to repurchase a loan in | 4 | | a manner that completely and clearly identifies to whom the | 5 | | request was made, the loans involved, and the reason for | 6 | | the request;
| 7 | | (y) Will at all times act in a manner consistent with | 8 | | subsections (a) and
(b) of Section 1-2 of this Act; and
| 9 | | (z) Will not knowingly hire or employ a loan originator | 10 | | who is
not registered, or mortgage loan originator who is | 11 | | not licensed, with the Commissioner as required under | 12 | | Section 7-1 or Section 7-1A, as applicable, of this Act ; .
| 13 | | (aa) Will not charge or collect advance payments from | 14 | | borrowers or homeowners for engaging in loan modification; | 15 | | and | 16 | | (bb) Will not structure activities or contracts to | 17 | | evade provisions of this Act. | 18 | | A licensee who fails to fulfill obligations of an averment, | 19 | | to comply with
averments made, or otherwise violates any of the | 20 | | averments made under this
Section shall be subject to the | 21 | | penalties in Section 4-5 of this Act.
| 22 | | (Source: P.A. 95-331, eff. 8-21-07; 96-112, eff. 7-31-09.)
| 23 | | (205 ILCS 635/3-2) (from Ch. 17, par. 2323-2)
| 24 | | Sec. 3-2. Annual audit.
| 25 | | (a) At the licensee's fiscal year-end, but in no
case more |
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| 1 | | than 12 months after the last audit conducted pursuant to this
| 2 | | Section, except as otherwise provided in this Section, it shall | 3 | | be
mandatory for each residential mortgage licensee to
cause | 4 | | its books and accounts to be audited by a certified public | 5 | | accountant
not connected with such licensee. The books and | 6 | | records of all licensees
under this Act shall be maintained on | 7 | | an accrual basis. The audit must be
sufficiently comprehensive | 8 | | in scope to permit
the expression of an opinion on the | 9 | | financial statements, which must be
prepared in accordance with | 10 | | generally accepted accounting principles, and
must be | 11 | | performed in accordance with generally accepted auditing | 12 | | standards. Notwithstanding
the requirements of this | 13 | | subsection, a licensee that is a first tier subsidiary
may | 14 | | submit audited consolidated financial statements of its parent | 15 | | as long as
the consolidated statements are supported by | 16 | | consolidating statements. The
licensee's chief financial | 17 | | officer shall attest to the licensee's financial
statements | 18 | | disclosed in the consolidating statements.
| 19 | | (b) As used herein, the term "expression of opinion" | 20 | | includes either
(1) an unqualified opinion, (2) a qualified | 21 | | opinion, (3) a disclaimer of
opinion, or (4) an adverse | 22 | | opinion.
| 23 | | (c) If a qualified or adverse opinion is expressed or if an | 24 | | opinion is
disclaimed, the reasons therefore must be fully | 25 | | explained. An opinion,
qualified as to a scope limitation, | 26 | | shall not be acceptable.
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| 1 | | (d) The most recent audit report shall be filed with the
| 2 | | Commissioner within 90 days after the end of the licensee's | 3 | | fiscal year, or with the Nationwide Mortgage Licensing System | 4 | | and Registry, if applicable, pursuant to Mortgage Call Report | 5 | | requirements. The report
filed with the Commissioner shall be | 6 | | certified by the certified public
accountant conducting the | 7 | | audit. The Commissioner may promulgate rules
regarding late | 8 | | audit reports.
| 9 | | (e) If any licensee required to make an audit shall fail to | 10 | | cause an
audit to be made, the Commissioner shall cause the | 11 | | same to be made by a
certified public accountant at the | 12 | | licensee's expense. The Commissioner
shall select such | 13 | | certified public accountant by advertising for bids or
by such | 14 | | other fair and impartial means as he or she establishes by | 15 | | regulation.
| 16 | | (f) In lieu of the audit or compilation financial statement
| 17 | | required by this Section, a licensee shall submit and the | 18 | | Commissioner may
accept any audit made in conformance with the | 19 | | audit
requirements of the U.S. Department of Housing and Urban | 20 | | Development.
| 21 | | (g) With respect to licensees who solely broker residential | 22 | | mortgage
loans as defined in subsection (o) of Section 1-4, | 23 | | instead of the audit
required by this Section, the Commissioner | 24 | | may
accept
compilation financial statements prepared at least | 25 | | every 12 months, and
the compilation financial statement must | 26 | | be prepared by an independent
certified public accountant |
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| 1 | | licensed under the Illinois Public Accounting Act
or by an | 2 | | equivalent state licensing law with full disclosure in | 3 | | accordance with generally accepted accounting
principals and | 4 | | must be submitted within 90 days after the end of
the | 5 | | licensee's fiscal year, or with the Nationwide Mortgage | 6 | | Licensing System and Registry, if applicable, pursuant to | 7 | | Mortgage Call Report requirements. If a
licensee
under this | 8 | | Section fails to file a compilation as required, the | 9 | | Commissioner
shall cause an audit of the licensee's books and | 10 | | accounts to be made by a
certified public accountant at the | 11 | | licensee's expense. The Commissioner shall
select the | 12 | | certified public accountant by advertising for bids or by such | 13 | | other
fair and impartial means as he or she establishes by | 14 | | rule. A licensee who
files false or misleading compilation | 15 | | financial statements is guilty of a
business offense and shall | 16 | | be fined not less than $5,000.
| 17 | | (h) The workpapers of the certified public accountants | 18 | | employed
by each
licensee for purposes of this Section are to | 19 | | be made available to the
Commissioner or the Commissioner's | 20 | | designee upon request and may be
reproduced by the Commissioner | 21 | | or the Commissioner's designee to enable to
the Commissioner to | 22 | | carry out the purposes of this Act.
| 23 | | (i) Notwithstanding any other provision of this Section, if | 24 | | a licensee
relying on subsection (g) of this Section causes its | 25 | | books to be audited at any
other time or causes its financial | 26 | | statements to be reviewed, a complete copy
of the audited or |
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| 1 | | reviewed financial statements shall be delivered to the
| 2 | | Commissioner at the time of the annual license renewal payment | 3 | | following
receipt by the licensee of the audited or reviewed | 4 | | financial statements. All workpapers shall be made available to | 5 | | the
Commissioner upon request. The financial statements and | 6 | | workpapers may be
reproduced by the Commissioner or the | 7 | | Commissioner's designee to carry out the
purposes of this Act.
| 8 | | (Source: P.A. 96-112, eff. 7-31-09; revised 11-18-11.)
| 9 | | (205 ILCS 635/4-5) (from Ch. 17, par. 2324-5)
| 10 | | Sec. 4-5. Suspension, revocation of licenses; fines.
| 11 | | (a) Upon written notice to a licensee, the Commissioner may | 12 | | suspend
or revoke any license issued pursuant to this Act if he | 13 | | or she shall make a
finding of one or more of the following in | 14 | | the notice that:
| 15 | | (1) Through separate acts or an act or a course of | 16 | | conduct, the licensee
has violated any provisions of this | 17 | | Act, any rule or regulation
promulgated by the Commissioner | 18 | | or of any other law, rule or regulation of
this State or | 19 | | the United States.
| 20 | | (2) Any fact or condition exists which, if it had | 21 | | existed at the time of
the original application for such | 22 | | license would have warranted the
Commissioner in refusing | 23 | | originally to issue such license.
| 24 | | (3) If a licensee is other than an individual, any | 25 | | ultimate
equitable owner, officer, director, or member of |
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| 1 | | the licensed partnership,
association, corporation, or | 2 | | other entity has so acted or failed to act as
would be | 3 | | cause for suspending or revoking a license to that party as | 4 | | an
individual.
| 5 | | (b) No license shall be suspended or revoked, except as | 6 | | provided in this
Section, nor shall any licensee be fined | 7 | | without notice of his or her right
to a hearing as provided in | 8 | | Section 4-12 of this Act.
| 9 | | (c) The Commissioner, on good cause shown that an emergency | 10 | | exists, may
suspend any license for a period not
exceeding 180 | 11 | | days, pending investigation. Upon a showing that a
licensee has | 12 | | failed to meet the experience or educational requirements of
| 13 | | Section 2-2 or the requirements of subsection (g) of Section | 14 | | 3-2, the
Commissioner shall suspend, prior to hearing as | 15 | | provided in Section 4-12, the
license until those requirements | 16 | | have been met.
| 17 | | (d) The provisions of subsection (e) of Section 2-6 of this | 18 | | Act
shall not affect a licensee's civil or criminal liability
| 19 | | for acts committed prior to surrender of a license.
| 20 | | (e) No revocation, suspension or surrender of any license | 21 | | shall impair
or affect the obligation of any pre-existing | 22 | | lawful contract between the
licensee and any person.
| 23 | | (f) Every license issued under this Act shall remain in | 24 | | force and effect
until the same shall have expired without | 25 | | renewal, have been surrendered,
revoked or suspended in | 26 | | accordance with the provisions of this Act, but the
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| 1 | | Commissioner shall have authority to reinstate a suspended | 2 | | license or to
issue a new license to a licensee whose license | 3 | | shall have been revoked if
no fact or condition then exists | 4 | | which would have warranted the
Commissioner in refusing | 5 | | originally to issue such license under this Act.
| 6 | | (g) Whenever the Commissioner shall revoke or suspend a | 7 | | license issued
pursuant to this Act or fine a licensee under | 8 | | this Act, he or she shall
forthwith execute a written order to | 9 | | that effect. The
Commissioner shall publish notice of such | 10 | | order in the Illinois Register
and post notice of the order on | 11 | | an agency Internet site maintained by the Commissioner or on | 12 | | the Nationwide Mortgage Licensing System and Registry and shall | 13 | | forthwith serve a copy of such order upon the
licensee. Any | 14 | | such order may be reviewed in the manner provided by
Section | 15 | | 4-12 of this Act.
| 16 | | (h) When the Commissioner finds any person in violation of | 17 | | the grounds
set forth in subsection (i), he or she may enter an | 18 | | order imposing one or
more of the following penalties:
| 19 | | (1) Revocation of license;
| 20 | | (2) Suspension of a license subject to reinstatement | 21 | | upon satisfying all
reasonable conditions the Commissioner | 22 | | may specify;
| 23 | | (3) Placement of the licensee or applicant on probation | 24 | | for a period of
time and subject to all reasonable | 25 | | conditions as the Commissioner may specify;
| 26 | | (4) Issuance of a reprimand;
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| 1 | | (5) Imposition of a fine not to exceed $25,000 for each
| 2 | | count of
separate offense , provided that a fine may be | 3 | | imposed not to exceed $75,000 for each separate count of | 4 | | offense of paragraph (2) of subsection (i) of this Section ; | 5 | | and
| 6 | | (6) Denial of a license.
| 7 | | (i) The following acts shall constitute grounds for which | 8 | | the
disciplinary actions specified in subsection (h) above may | 9 | | be taken:
| 10 | | (1) Being convicted or found guilty, regardless of | 11 | | pendency of an
appeal, of a crime in any jurisdiction which | 12 | | involves fraud, dishonest
dealing, or any other act of | 13 | | moral turpitude;
| 14 | | (2) Fraud, misrepresentation, deceit or negligence in | 15 | | any mortgage
financing transaction;
| 16 | | (3) A material or intentional misstatement of fact on | 17 | | an initial or
renewal application;
| 18 | | (4) Failure to follow the Commissioner's regulations | 19 | | with respect to
placement of funds in escrow accounts;
| 20 | | (5) Insolvency or filing under any provision of the | 21 | | Bankruptcy Code
as a debtor;
| 22 | | (6) Failure to account or deliver to any person any | 23 | | property such as any
money, fund, deposit, check, draft, | 24 | | mortgage, or other document or thing of
value, which has | 25 | | come into his or her hands and which is not his or her
| 26 | | property or which he or she is not in law or equity |
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| 1 | | entitled to retain,
under the circumstances and at the time | 2 | | which has been agreed upon or is
required by law or, in the | 3 | | absence of a fixed time, upon demand of the
person entitled | 4 | | to such accounting and delivery;
| 5 | | (7) Failure to disburse funds in accordance with | 6 | | agreements;
| 7 | | (8) Any misuse, misapplication, or misappropriation of | 8 | | trust funds
or escrow funds;
| 9 | | (9) Having a license, or the equivalent, to practice | 10 | | any profession or
occupation revoked, suspended, or | 11 | | otherwise acted against, including the
denial of licensure | 12 | | by a licensing authority of this State or another
state, | 13 | | territory or country for fraud, dishonest dealing or any | 14 | | other act
of moral turpitude;
| 15 | | (10) Failure to issue a satisfaction of mortgage when | 16 | | the residential
mortgage has been executed and proceeds | 17 | | were not disbursed to the benefit
of the mortgagor and when | 18 | | the mortgagor has fully paid licensee's costs
and | 19 | | commission;
| 20 | | (11) Failure to comply with any order of the | 21 | | Commissioner or rule made
or issued under the provisions of | 22 | | this Act;
| 23 | | (12) Engaging in activities regulated by this Act | 24 | | without a current,
active license unless specifically | 25 | | exempted by this Act;
| 26 | | (13) Failure to pay in a timely manner any fee, charge |
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| 1 | | or fine under
this Act;
| 2 | | (14) Failure to maintain, preserve, and keep available | 3 | | for examination,
all books, accounts or other documents | 4 | | required by the provisions of this
Act and the rules of the | 5 | | Commissioner;
| 6 | | (15) Refusing, obstructing, evading, or unreasonably | 7 | | delaying an investigation, information request, or | 8 | | examination authorized under this Act, or refusing, | 9 | | obstructing, evading, or unreasonably delaying compliance | 10 | | with the Director's subpoena or subpoena duces tecum;
| 11 | | (16) A pattern of substantially underestimating the | 12 | | maximum closing costs;
| 13 | | (17) Failure to comply with or violation of any | 14 | | provision of this Act ; . | 15 | | (18) Failure to comply with or violation of any | 16 | | provision of Article 3 of the Residential Real Property | 17 | | Disclosure Act.
| 18 | | (j) A licensee shall be subject to the disciplinary actions | 19 | | specified in
this Act for violations of subsection (i) by any | 20 | | officer, director,
shareholder, joint venture, partner, | 21 | | ultimate equitable owner, or employee
of the licensee.
| 22 | | (k) Such licensee shall be subject to suspension or | 23 | | revocation for
unauthorized employee actions only if there is a | 24 | | pattern of repeated violations by
employees or the licensee has | 25 | | knowledge of the violations, or there is substantial harm to a | 26 | | consumer.
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| 1 | | (l) Procedure for surrender of license:
| 2 | | (1) The Commissioner may, after 10 days notice by | 3 | | certified mail to the
licensee at the address set forth on | 4 | | the license, stating the contemplated
action and in general | 5 | | the grounds therefor and the date, time and place of
a | 6 | | hearing thereon, and after providing the licensee with a | 7 | | reasonable
opportunity to be heard prior to such action, | 8 | | fine such licensee an amount
not exceeding $25,000
per | 9 | | violation, or revoke or suspend any license
issued | 10 | | hereunder if he or she finds that:
| 11 | | (i) The licensee has failed to comply with any | 12 | | provision of this Act or
any order, decision, finding, | 13 | | rule, regulation or direction of the
Commissioner | 14 | | lawfully made pursuant to the authority of this Act; or
| 15 | | (ii) Any fact or condition exists which, if it had | 16 | | existed at the time
of the original application for the | 17 | | license, clearly would have warranted
the Commissioner | 18 | | in refusing to issue the license.
| 19 | | (2) Any licensee may submit application to surrender a | 20 | | license,
but upon the Director approving the surrender, it | 21 | | shall not affect the licensee's civil or criminal liability
| 22 | | for acts committed prior to surrender or entitle the | 23 | | licensee to a return
of any part of the license fee.
| 24 | | (Source: P.A. 96-112, eff. 7-31-09.)
| 25 | | (205 ILCS 635/4-8.2)
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| 1 | | Sec. 4-8.2. Reports of violations. Any person licensed | 2 | | under this Act or
any other person may report to the | 3 | | Commissioner any information to show that a
person subject to | 4 | | this Act is or may be in violation of this Act. A licensee who | 5 | | files a report with the Department of Financial and | 6 | | Professional Regulation that another licensee is engaged in one | 7 | | or more violations pursuant to this Act shall not be the | 8 | | subject of disciplinary action by the Department, unless the | 9 | | Department determines, by a preponderance of the evidence | 10 | | available to the Department, that the reporting person | 11 | | knowingly and willingly participated in the violation that was | 12 | | reported.
| 13 | | (Source: P.A. 93-561, eff. 1-1-04.)
| 14 | | (205 ILCS 635/7-1A) | 15 | | Sec. 7-1A. Mortgage loan originator license. | 16 | | (a) It is unlawful for any individual to act or assume to | 17 | | act as a mortgage loan originator, as defined in subsection | 18 | | (jj) of Section 1-4 of this Act, without obtaining a license | 19 | | from the Director, unless the individual is exempt under | 20 | | subsection (c) of this Section. It is unlawful for any | 21 | | individual who holds a mortgage loan originator license to | 22 | | provide short sale facilitation services unless he or she holds | 23 | | a license under the Real Estate License Act of 2000. Each | 24 | | licensed mortgage loan originator must register with and | 25 | | maintain a valid unique identifier issued by the Nationwide |
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| 1 | | Mortgage Licensing System and Registry. | 2 | | (b) In order to facilitate an orderly transition to | 3 | | licensing and minimize disruption in the mortgage marketplace, | 4 | | the operability date for subsection (a) of this Section shall | 5 | | be as provided in this subsection (b). For this purpose, the | 6 | | Director may require submission of licensing information to the | 7 | | Nationwide Mortgage Licensing System and Registry prior to the | 8 | | operability dates designated by the Director pursuant to items | 9 | | (1) and (2) of this subsection (b). | 10 | | (1) For all individuals other than individuals | 11 | | described in item (2) of this subsection (b), the | 12 | | operability date as designated by the Director shall be no | 13 | | later than July 31, 2010, or any date approved by the | 14 | | Secretary of the U.S. Department of Housing and Urban | 15 | | Development, pursuant to the authority granted under | 16 | | federal Public Law 110-289, Section 1508. | 17 | | (2) For all individuals registered as loan originators | 18 | | as of the effective date of this amendatory Act of the 96th | 19 | | General Assembly, the operability date as designated by the | 20 | | Director shall be no later than January 1, 2011, or any | 21 | | date approved by the Secretary of the U.S. Department of | 22 | | Housing and Urban Development, pursuant to the authority | 23 | | granted under Public Law 110-289, Section 1508. | 24 | | (3) For all individuals described in item (1) or (2) of | 25 | | this subsection (b) who are loss mitigation specialists | 26 | | employed by servicers, the operability date shall be July |
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| 1 | | 31, 2011, or any date approved by the Secretary of the U.S. | 2 | | Department of Housing and Urban Development pursuant to | 3 | | authority granted under Public Law 110-289, Section 1508. | 4 | | (c) The following, when engaged in the following | 5 | | activities, are exempt from this Act: | 6 | | (1) Registered mortgage loan originators, when acting | 7 | | for an entity described in subsection (tt) of Section 1-4. | 8 | | (2) Any individual who offers or negotiates terms of a | 9 | | residential mortgage loan with or on behalf of an immediate | 10 | | family member of the individual. | 11 | | (3) Any individual who offers or negotiates terms of a | 12 | | residential mortgage loan secured by a dwelling that served | 13 | | as the individual's residence. | 14 | | (4) A licensed attorney who negotiates the terms of a | 15 | | residential mortgage loan on behalf of a client as an | 16 | | ancillary matter to the attorney's representation of the | 17 | | client, unless the attorney is compensated by a lender, a | 18 | | mortgage broker, or other mortgage loan originator or by | 19 | | any agent of a lender, mortgage broker, or other mortgage | 20 | | loan originator. | 21 | | (d) A loan processor or underwriter who is an independent | 22 | | contractor may not engage in the activities of a loan processor | 23 | | or underwriter unless he or she obtains and maintains a license | 24 | | under subsection (a) of this Section. Each independent | 25 | | contractor loan processor or underwriter licensed as a mortgage | 26 | | loan originator must have and maintain a valid unique |
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| 1 | | identifier issued by the Nationwide Mortgage Licensing System | 2 | | and Registry. | 3 | | (e) For the purposes of implementing an orderly and | 4 | | efficient licensing process, the Director may establish | 5 | | licensing rules or regulations and interim procedures for | 6 | | licensing and acceptance of applications. For previously | 7 | | registered or licensed individuals, the Director may establish | 8 | | expedited review and licensing procedures.
| 9 | | (Source: P.A. 96-112, eff. 7-31-09.) | 10 | | (205 ILCS 635/7-11)
| 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 or, for | 23 | | engaging in an act prohibited by item (1) of Section 7-13, | 24 | | not more than $3,000 for each day for each violation of | 25 | | this Act or any other applicable law or regulation that is |
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| 1 | | committed. If the Mortgage Loan Originator engages in a | 2 | | pattern of repeated violations, the Director may impose a | 3 | | fine of not more than $2,000 or, for engaging in an act | 4 | | prohibited by item (1) of Section 7-13, not more than | 5 | | $6,000 for each day for each violation committed. In | 6 | | determining the amount of a fine to be imposed pursuant to | 7 | | this Act or any other applicable law or regulation, the | 8 | | Director shall consider all of the following: | 9 | | (A) The seriousness of the violation; | 10 | | (B) The mortgage loan originator's good faith | 11 | | efforts to prevent the violation; and | 12 | | (C) The mortgage loan originator's history of | 13 | | violations and compliance with orders. | 14 | | (b) In addition to any other action authorized by this Act | 15 | | or any other applicable law, rule or regulation, the Director | 16 | | may investigate alleged violations of the Act or any other | 17 | | applicable law, rule or regulation and complaints concerning | 18 | | any such violation. The Director may seek a court order to | 19 | | enjoin the violation. | 20 | | (c) In addition to any other action authorized by this Act | 21 | | or any other applicable law, rule or regulation, if the | 22 | | Director determines that a mortgage loan originator is engaged | 23 | | in or is believed to be engaged in activities that may | 24 | | constitute a violation of this Act or any other applicable law, | 25 | | rule or regulation, the Director may issue a cease and desist | 26 | | order to compel the mortgage loan originator to comply with |
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| 1 | | this Act or any other applicable law, rule or regulation or, | 2 | | upon a showing that an emergency exists, may suspend the | 3 | | mortgage loan originator's license for a period not exceeding | 4 | | 180 calendar days, pending investigation.
| 5 | | (Source: P.A. 96-112, eff. 7-31-09.) | 6 | | (205 ILCS 635/7-13)
| 7 | | Sec. 7-13. Prohibited acts and practices for mortgage loan | 8 | | originators. It is a violation of this Act for an individual | 9 | | subject to this Act to: | 10 | | (1) Directly or indirectly employ any scheme, device, | 11 | | or artifice to defraud or mislead borrowers or lenders or | 12 | | to defraud any person. | 13 | | (2) Engage in any unfair or deceptive practice toward | 14 | | any person. | 15 | | (3) Obtain property by fraud or misrepresentation. | 16 | | (4) Solicit or enter into a contract with a borrower | 17 | | that provides in substance that the person or individual | 18 | | subject to this Act may earn a fee or commission through | 19 | | "best efforts" to obtain a loan even though no loan is | 20 | | actually obtained for the borrower. | 21 | | (5) Solicit, advertise, or enter into a contract for | 22 | | specific interest rates, points, or other financing terms | 23 | | unless the terms are actually available at the time of | 24 | | soliciting, advertising, or contracting. | 25 | | (6) Conduct any business covered by this Act without |
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| 1 | | holding a valid license as required under this Act, or | 2 | | assist or aid and abet any person in the conduct of | 3 | | business under this Act without a valid license as required | 4 | | under this Act. | 5 | | (7) Fail to make disclosures as required by this Act | 6 | | and any other applicable State or federal law, including | 7 | | regulations thereunder. | 8 | | (8) Fail to comply with this Act or rules or | 9 | | regulations promulgated under this Act, or fail to comply | 10 | | with any other state or federal law, including the rules | 11 | | and regulations thereunder, applicable to any business | 12 | | authorized or conducted under this Act. | 13 | | (9) Make, in any manner, any false or deceptive | 14 | | statement or representation of a material fact, or any | 15 | | omission of a material fact, required on any document or | 16 | | application subject to this Act. | 17 | | (10) Negligently make any false statement or knowingly | 18 | | and willfully make any omission of material fact in | 19 | | connection with any information or report filed with a | 20 | | governmental agency or the Nationwide Mortgage Licensing | 21 | | System and Registry or in connection with any investigation | 22 | | conducted by the Director or another governmental agency. | 23 | | (11) Make any payment, threat or promise, directly or | 24 | | indirectly, to any person for the purpose of influencing | 25 | | the independent judgment of the person in connection with a | 26 | | residential mortgage loan, or make any payment threat or |
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| 1 | | promise, directly or indirectly, to any appraiser of a | 2 | | property, for the purpose of influencing the independent | 3 | | judgment of the appraiser with respect to the value of the | 4 | | property. | 5 | | (12) Collect, charge, attempt to collect or charge, or | 6 | | use or propose any agreement purporting to collect or | 7 | | charge any fee prohibited by this Act , including advance | 8 | | fees for loan modification . | 9 | | (13) Cause or require a borrower to obtain property | 10 | | insurance coverage in an amount that exceeds the | 11 | | replacement cost of the improvements as established by the | 12 | | property insurer. | 13 | | (14) Fail to truthfully account for monies belonging to | 14 | | a party to a residential mortgage loan transaction. | 15 | | (15) Engage in conduct that constitutes dishonest | 16 | | dealings. | 17 | | (16) Knowingly instruct, solicit, propose, or cause a | 18 | | person other than the borrower to sign a borrower's | 19 | | signature on a mortgage related document, or solicit, | 20 | | accept or execute any contract or other document related to | 21 | | the residential mortgage transaction that contains any | 22 | | blanks to be filled in after signing or initialing the | 23 | | contract or other document, except for forms authorizing | 24 | | the verification of application information. | 25 | | (17) Discourage any applicant from seeking or | 26 | | participating in housing or financial counseling either |
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| 1 | | before or after the consummation of a loan transaction, or | 2 | | fail to provide information on counseling resources upon | 3 | | request. | 4 | | (18) Charge for any ancillary products or services, not | 5 | | essential to the basic loan transaction for which the | 6 | | consumer has applied, without the applicant's knowledge | 7 | | and written authorization, or charge for any ancillary | 8 | | products or services not actually provided in the | 9 | | transaction. | 10 | | (19) Fail to give reasonable consideration to a | 11 | | borrower's ability to repay the debt. | 12 | | (20) Interfere or obstruct an investigation or | 13 | | examination conducted pursuant to this Act.
| 14 | | (21) Structure activities or contracts to evade | 15 | | provisions of this Act. | 16 | | (Source: P.A. 96-112, eff. 7-31-09.)
| 17 | | Section 10. The Title Insurance Act is amended by changing | 18 | | Section 23 as follows:
| 19 | | (215 ILCS 155/23) (from Ch. 73, par. 1423)
| 20 | | Sec. 23. Violation; penalties.
| 21 | | (a) Any violation of any of the provisions of this Act and, | 22 | | beginning January 1, 2013, any violation of any of the | 23 | | provisions of Article 3 of the Residential Real Property | 24 | | Disclosure Act shall
constitute a business offense and shall |
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| 1 | | subject the party violating the
same to a penalty of $1000 for | 2 | | each offense.
| 3 | | (b) Nothing contained in this Section shall affect the | 4 | | right of the Secretary to revoke or suspend a title insurance | 5 | | company's or independent escrowee's certificate of authority | 6 | | or a title insurance agent's registration under any other | 7 | | Section of this Act. | 8 | | (Source: P.A. 94-893, eff. 6-20-06.)
| 9 | | Section 15. The Residential Real Property Disclosure Act is | 10 | | amended by changing Sections 70 and 72 as follows: | 11 | | (765 ILCS 77/70) | 12 | | Sec. 70. Predatory lending database program. | 13 | | (a) As used in this Article: | 14 | | "Adjustable rate mortgage" or "ARM" means a closed-end | 15 | | mortgage transaction that allows adjustments of the loan | 16 | | interest rate during the first 3 years of the loan term. | 17 | | "Borrower" means a person seeking a mortgage loan.
| 18 | | "Broker" means a "broker" or "loan broker", as defined in | 19 | | subsection (p) of Section 1-4 of the Residential Mortgage | 20 | | License Act of 1987. | 21 | | "Closing agent" means an individual assigned by a title | 22 | | insurance company or a broker or originator to ensure that the | 23 | | execution of documents related to the closing of a real estate | 24 | | sale or the refinancing of a real estate loan and the |
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| 1 | | disbursement of closing funds are in conformity with the | 2 | | instructions of the entity financing the transaction.
| 3 | | "Counseling" means in-person counseling provided by a | 4 | | counselor employed by a HUD-certified counseling agency to all | 5 | | borrowers, or documented telephone counseling where a hardship | 6 | | would be imposed on one or more borrowers. A hardship shall | 7 | | exist in instances in which the borrower is confined to his or | 8 | | her home due to medical conditions, as verified in writing by a | 9 | | physician, or the borrower resides 50 miles or more from the | 10 | | nearest participating HUD-certified housing counseling agency. | 11 | | In instances of telephone counseling, the borrower must supply | 12 | | all necessary documents to the counselor at least 72 hours | 13 | | prior to the scheduled telephone counseling session. | 14 | | "Counselor" means a counselor employed by a HUD-certified | 15 | | housing counseling agency. | 16 | | "Credit score" means a credit risk score as defined by the | 17 | | Fair Isaac Corporation, or its successor, and reported under | 18 | | such names as "BEACON", "EMPIRICA", and "FAIR ISAAC RISK SCORE" | 19 | | by one or more of the following credit reporting agencies or | 20 | | their successors: Equifax, Inc., Experian Information | 21 | | Solutions, Inc., and TransUnion
LLC. If the borrower's credit | 22 | | report contains credit scores from 2 reporting agencies, then | 23 | | the broker or loan originator shall report the lower score. If | 24 | | the borrower's credit report contains credit scores from 3 | 25 | | reporting agencies, then the broker or loan originator shall | 26 | | report the middle score.
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| 1 | | "Department" means the Department of Financial and | 2 | | Professional Regulation.
| 3 | | "Exempt person" means that term as it is defined in | 4 | | subsections (d)(1) , and (d)(1.5) , and (d)(1.8) of Section 1-4 | 5 | | of the Residential Mortgage License Act of 1987.
| 6 | | "First-time homebuyer" means a borrower who has not held an | 7 | | ownership interest in residential property.
| 8 | | "HUD-certified counseling" or "counseling" means | 9 | | counseling given to a borrower by a counselor employed by a | 10 | | HUD-certified housing counseling agency. | 11 | | "Interest only" means a closed-end loan that permits one or | 12 | | more payments of interest without any reduction of the | 13 | | principal balance of the loan, other than the first payment on | 14 | | the loan. | 15 | | "Lender" means that term as it is defined in subsection (g) | 16 | | of Section 1-4 of the Residential Mortgage License Act of 1987.
| 17 | | "Licensee" means that term as it is defined in subsection | 18 | | (e) of Section 1-4 of the Residential Mortgage License Act of | 19 | | 1987.
| 20 | | "Mortgage loan" means that term as it is defined in | 21 | | subsection (f) of Section 1-4 of the Residential Mortgage | 22 | | License Act of 1987.
| 23 | | "Negative amortization" means an amortization method under | 24 | | which the outstanding balance may increase at any time over the | 25 | | course of the loan because the regular periodic payment does | 26 | | not cover the full amount of interest due. |
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| 1 | | "Originator" means a "loan originator" as defined in | 2 | | subsection (hh) of Section 1-4 of the Residential Mortgage | 3 | | License Act of 1987, except an exempt person , and means a | 4 | | "mortgage loan originator" as defined in subsection (jj) of | 5 | | Section 1-4 of the Residential Mortgage License Act of 1987, | 6 | | except an exempt person . | 7 | | "Points and fees" has the meaning ascribed to that term in | 8 | | Section 10 of the High Risk Home Loan Act. | 9 | | "Prepayment penalty" means a charge imposed by a lender | 10 | | under a mortgage note or rider when the loan is paid before the | 11 | | expiration of the term of the loan. | 12 | | "Refinancing" means a loan secured by the borrower's or | 13 | | borrowers' primary residence where the proceeds are not used as | 14 | | purchase money for the residence. | 15 | | "Title insurance company" means any domestic company | 16 | | organized under the laws of this State for the purpose of | 17 | | conducting the business of guaranteeing or insuring titles to | 18 | | real estate and any title insurance company organized under the | 19 | | laws of another State, the District of Columbia, or a foreign | 20 | | government and authorized to transact the business of | 21 | | guaranteeing or insuring titles to real estate in this State.
| 22 | | (a-5) A predatory lending database program shall be | 23 | | established within Cook County. The program shall be | 24 | | administered in accordance with this Article. The inception | 25 | | date of the program shall be July 1, 2008.
A predatory lending
| 26 | | database program shall be expanded to include Kane, Peoria, and |
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| 1 | | Will counties. The
inception date of the expansion of the | 2 | | program as it applies to Kane, Peoria, and Will
counties shall | 3 | | be July 1, 2010. Until the inception date, none of the duties, | 4 | | obligations, contingencies, or consequences of or from the | 5 | | program shall be imposed. The program shall apply to all | 6 | | mortgage applications that are governed by this Article and | 7 | | that are made or taken on or after the inception of the | 8 | | program.
| 9 | | (b) The database created under this program shall be | 10 | | maintained and administered by the Department. The database | 11 | | shall be designed to allow brokers, originators, counselors, | 12 | | title insurance companies, and closing agents to submit | 13 | | information to the database online. The database shall not be | 14 | | designed to allow those entities to retrieve information from | 15 | | the database, except as otherwise provided in this Article. | 16 | | Information submitted by the broker or originator to the | 17 | | Department may be used to populate the online form submitted by | 18 | | a counselor, title insurance company, or closing agent. | 19 | | (c) Within 10 days after taking a mortgage application, the | 20 | | broker or originator for any mortgage on residential property | 21 | | within the program area must submit to the predatory lending | 22 | | database all of the information required under Section 72 and | 23 | | any other information required by the Department by rule. | 24 | | Within 7 days after receipt of the information, the Department | 25 | | shall compare that information to the housing
counseling | 26 | | standards in Section 73
and issue to the borrower and the |
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| 1 | | broker or originator a determination of whether counseling is | 2 | | recommended for the borrower. The borrower may not waive | 3 | | counseling. If at any time after submitting the information | 4 | | required under Section 72 the broker or originator (i) changes | 5 | | the terms of the loan or (ii) issues a new commitment to the | 6 | | borrower, then, within 5 days thereafter, the broker or | 7 | | originator shall re-submit all of the information required | 8 | | under Section 72 and, within 4 days after receipt of the | 9 | | information re-submitted by the broker or originator, the | 10 | | Department shall compare that information to the housing
| 11 | | counseling standards in Section 73
and shall issue to the | 12 | | borrower and the broker or originator a new determination of | 13 | | whether re-counseling
is recommended for the borrower based on | 14 | | the information re-submitted by the broker or originator. The | 15 | | Department shall require re-counseling if the loan terms have | 16 | | been modified to meet another counseling standard in Section | 17 | | 73, or if the broker has increased the interest rate by more | 18 | | than 200 basis points.
| 19 | | (d) If the Department recommends counseling for the | 20 | | borrower under subsection (c), then the Department shall notify | 21 | | the borrower of all participating HUD-certified counseling | 22 | | agencies located within the State and direct the borrower to | 23 | | interview with a counselor associated with one of those | 24 | | agencies. Within 10 days after receipt of the notice of | 25 | | HUD-certified counseling agencies, the borrower shall select | 26 | | one of those agencies and shall engage in an interview with a |
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| 1 | | counselor associated with that agency. Within 7 days after | 2 | | interviewing the borrower, the counselor must submit to the | 3 | | predatory lending database all of the information required | 4 | | under Section 74 and any other information required by the | 5 | | Department by rule. Reasonable and customary costs not to | 6 | | exceed $300
associated with counseling provided under the | 7 | | program shall be paid by the broker or originator. The | 8 | | Department shall annually calculate to the nearest dollar an | 9 | | adjusted rate for inflation. A counselor shall not recommend or | 10 | | suggest that a borrower contact any specific mortgage | 11 | | origination company, financial institution, or entity that | 12 | | deals in mortgage finance to obtain a loan, another quote, or | 13 | | for any other reason related to the specific mortgage | 14 | | transaction; however, a counselor may suggest that the borrower | 15 | | seek an opinion or a quote from another mortgage origination | 16 | | company, financial institution, or entity that deals in | 17 | | mortgage finance. A counselor or housing counseling agency that
| 18 | | in good faith provides counseling shall not be liable to a | 19 | | broker or originator or borrower for civil damages, except for | 20 | | willful or wanton misconduct on the part of the counselor in | 21 | | providing the counseling. | 22 | | (e) The broker or originator and the borrower may not take | 23 | | any legally binding action concerning the loan transaction | 24 | | until the later of the following: | 25 | | (1) the Department issues a determination not to | 26 | | recommend HUD-certified
counseling for the borrower in |
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| 1 | | accordance with subsection (c); or | 2 | | (2) the Department issues a determination that | 3 | | HUD-certified
counseling is recommended for the borrower | 4 | | and the counselor submits all required information to the | 5 | | database in accordance with subsection (d).
| 6 | | (f) Within 10 days after closing, the title insurance | 7 | | company or closing agent must submit to the predatory lending | 8 | | database all of the information required under Section 76 and | 9 | | any other information required by the Department by rule. | 10 | | (g) The title insurance company or closing agent shall | 11 | | attach to the mortgage a certificate of
compliance with the | 12 | | requirements of this Article, as generated by the database. If | 13 | | the title insurance company or closing agent fails to attach | 14 | | the certificate of compliance, then the mortgage is not | 15 | | recordable. In addition, if any lis pendens for a residential | 16 | | mortgage foreclosure is recorded on the property within the | 17 | | program area, a certificate of service must be simultaneously | 18 | | recorded that affirms that a copy of the lis pendens was filed | 19 | | with the Department. If the certificate of service is not | 20 | | recorded, then the lis pendens pertaining to the residential | 21 | | mortgage foreclosure in question is not recordable and is of no | 22 | | force and effect. | 23 | | (h) All information provided to the predatory lending | 24 | | database under the program is confidential and is not subject | 25 | | to disclosure under the Freedom of Information Act, except as | 26 | | otherwise provided in this Article. Information or documents |
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| 1 | | obtained by employees of the Department in the course of | 2 | | maintaining and administering the predatory lending database | 3 | | are deemed confidential. Employees are prohibited from making | 4 | | disclosure of such confidential information or documents. Any | 5 | | request for production of information from the predatory | 6 | | lending database, whether by subpoena, notice, or any other | 7 | | source, shall be referred to the Department of Financial and | 8 | | Professional Regulation. Any borrower may authorize in writing | 9 | | the release of database information. The Department may use the | 10 | | information in the database without the consent of the | 11 | | borrower: (i) for the purposes of administering and enforcing | 12 | | the program; (ii) to provide relevant information to a | 13 | | counselor providing counseling to a borrower under the program; | 14 | | or (iii) to the appropriate law enforcement agency or the | 15 | | applicable administrative agency if the database information | 16 | | demonstrates criminal, fraudulent, or otherwise illegal | 17 | | activity.
| 18 | | (i) Nothing in this Article is intended to prevent a | 19 | | borrower from making his or her own decision as to whether to | 20 | | proceed with a transaction.
| 21 | | (j) Any person who violates any provision of this Article | 22 | | commits an unlawful practice within the meaning of the Consumer | 23 | | Fraud and Deceptive Business Practices Act.
| 24 | | (j-1) A violation of any provision of this Article by a | 25 | | mortgage banking licensee or licensed mortgage loan originator | 26 | | shall constitute a violation of the Residential Mortgage |
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| 1 | | License Act of 1987. | 2 | | (j-2) A violation of any provision of this Article by a | 3 | | title insurance company, title agent, or escrow agent shall | 4 | | constitute a violation of the Title Insurance Act. | 5 | | (j-3) A violation of any provision of this Article by a | 6 | | housing counselor shall be referred to the Department of | 7 | | Housing and Urban Development. | 8 | | (k) During the existence of the program, the Department | 9 | | shall submit semi-annual reports to the Governor and to the | 10 | | General Assembly by May 1 and November 1 of each year detailing | 11 | | its findings regarding the program. The report shall include, | 12 | | by county, at least the following information for each | 13 | | reporting period: | 14 | | (1) the number of loans registered with the program; | 15 | | (2) the number of borrowers receiving counseling; | 16 | | (3) the number of loans closed; | 17 | | (4) the number of loans requiring counseling for each | 18 | | of the standards set forth in Section 73; | 19 | | (5) the number of loans requiring counseling where the | 20 | | mortgage originator changed the loan terms subsequent to | 21 | | counseling;
| 22 | | (6) the number of licensed mortgage brokers and loan | 23 | | originators entering information into
the database; | 24 | | (7) the number of investigations based on information | 25 | | obtained from the database,
including the number of | 26 | | licensees fined, the number of licenses suspended, and the
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| 1 | | number of licenses revoked; | 2 | | (8) a summary of the types of non-traditional mortgage | 3 | | products being offered; and | 4 | | (9) a summary of how the Department is actively | 5 | | utilizing the program to combat
mortgage fraud. | 6 | | (Source: P.A. 95-691, eff. 6-1-08; 96-328, eff. 8-11-09; | 7 | | 96-856, eff. 12-31-09.) | 8 | | (765 ILCS 77/72) | 9 | | Sec. 72. Originator; required information. As part of the | 10 | | predatory lending database program, the broker or originator | 11 | | must submit all of the following information for inclusion in | 12 | | the predatory lending database for each loan for which the | 13 | | originator takes an application: | 14 | | (1) The borrower's name, address, social security | 15 | | number or taxpayer identification number, date of birth, | 16 | | and income and expense information , including total | 17 | | monthly consumer debt, contained in the mortgage | 18 | | application.
| 19 | | (2) The address, permanent index number, and a | 20 | | description of the collateral and information about the | 21 | | loan or loans being applied for and the loan terms, | 22 | | including the amount of the loan, the rate and whether the | 23 | | rate is fixed or adjustable, amortization or loan period | 24 | | terms, and any other material terms.
| 25 | | (3) The borrower's credit score at the time of |
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| 1 | | application.
| 2 | | (4) Information about the originator and the company | 3 | | the originator works for, including the originator's | 4 | | license number and address, fees being charged, whether the | 5 | | fees are being charged as points up front, the yield spread | 6 | | premium payable outside closing, and other charges made or | 7 | | remuneration required by the broker or originator or its | 8 | | affiliates or the broker's or originator's employer or its | 9 | | affiliates for the mortgage loans.
| 10 | | (5) Information about affiliated or third party | 11 | | service providers, including the names and addresses of | 12 | | appraisers, title insurance companies, closing agents, | 13 | | attorneys, and realtors who are involved with the | 14 | | transaction and the broker or originator and any moneys | 15 | | received from the broker or originator in connection with | 16 | | the transaction.
| 17 | | (6) All information indicated on the Good Faith | 18 | | Estimate and Truth in Lending statement disclosures given | 19 | | to the borrower by the broker or originator.
| 20 | | (7) Annual real estate taxes for the property, together | 21 | | with any assessments payable in connection with the | 22 | | property to be secured by the collateral and the proposed | 23 | | monthly principal and interest charge of all loans to be | 24 | | taken by the borrower and secured by the property of the | 25 | | borrower.
| 26 | | (8) Information concerning how the broker or |
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| 1 | | originator obtained the client and the name of its referral | 2 | | source, if any.
| 3 | | (9) Information concerning the notices provided by the | 4 | | broker or originator to the borrower as required by law and | 5 | | the date those notices were given.
| 6 | | (10) Information concerning whether a sale and | 7 | | leaseback is contemplated and the names of the lessor and | 8 | | lessee, seller, and purchaser.
| 9 | | (11) Any and all financing by the borrower for the | 10 | | subject property within 12 months prior to the date of | 11 | | application. | 12 | | (12) Loan information, including interest rate, term, | 13 | | purchase price, down payment, and closing costs. | 14 | | (13) Whether the buyer is a first-time homebuyer or | 15 | | refinancing a primary residence. | 16 | | (14) Whether the loan permits interest only payments. | 17 | | (15) Whether the loan may result in negative | 18 | | amortization. | 19 | | (16) Whether the total points and fees payable by the | 20 | | borrowers at or before closing will exceed 5%. | 21 | | (17) Whether the loan includes a prepayment penalty, | 22 | | and, if so, the terms of the penalty. | 23 | | (18) Whether the loan is an ARM. | 24 | | (Source: P.A. 94-280, eff. 1-1-06; 95-691, eff. 6-1-08 .) | 25 | | Section 99. Effective date. This Act takes effect January | 26 | | 1, 2013. |
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