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90_SB0497
205 ILCS 635/1-3 from Ch. 17, par. 2321-3
205 ILCS 635/1-4 from Ch. 17, par. 2321-4
205 ILCS 635/4-1 from Ch. 17, par. 2324-1
205 ILCS 635/4-2 from Ch. 17, par. 2324-2
205 ILCS 635/4-8 from Ch. 17, par. 2324-8
205 ILCS 635/4-10 from Ch. 17, par. 2324-10
Amends the Residential Mortgage License Act of 1987.
Provides that examinations of licensees shall be conducted
for cause rather than merely on a periodic basis. Abolishes
the exemption for licensees under the Real Estate License Act
of 1983. Requires an entity to either have a physical
presence in Illinois or not originate mortgage loans in its
ordinary course of business to qualify for exemption related
to volume of business. Provides that default rate provisions
apply only to licensees that service, fund, or make credit
decisions regarding mortgage loans. Prohibits the limitation
of fees. Requires the Commissioner of Banks and Real Estate
to maintain a registry of employees of licensees.
LRB9001616JSgc
LRB9001616JSgc
1 AN ACT to amend the Residential Mortgage License Act of
2 1987 by changing Sections 1-3, 1-4, 4-1, 4-2, 4-8, and 4-10.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Residential Mortgage License Act of 1987
6 is amended by changing Sections 1-3, 1-4, 4-1, 4-2, 4-8, and
7 4-10 as follows:
8 (205 ILCS 635/1-3) (from Ch. 17, par. 2321-3)
9 Sec. 1-3. Necessity for License; Scope of Act.
10 (a) No person, partnership, association, corporation, or
11 other entity, or affiliate thereof shall engage in the
12 business of brokering, funding, originating, servicing or
13 purchasing of residential mortgage loans without first
14 obtaining a license from the Commissioner in accordance with
15 the licensing procedure provided in this Article I and such
16 regulations as may be promulgated by the Commissioner. The
17 licensing provisions of this Section shall not apply to any
18 entity engaged solely in commercial mortgage lending or to
19 any person, partnership association, corporation or other
20 entity exempted pursuant to Section 1-4, subsection (d), of
21 this Act or in accordance with regulations promulgated by the
22 Commissioner hereunder.
23 (b) No person, partnership, association, corporation, or
24 other entity except a licensee under this Act or an entity
25 exempt from licensing pursuant to Section 1-4, subsection
26 (d), of this Act shall do any business under any name or
27 title, or circulate or use any advertising or make any
28 representation or give any information to any person, which
29 indicates or reasonably implies activity within the scope of
30 this Act.
31 (c) The Commissioner may, through the Attorney General,
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1 request the circuit court of either Cook or Sangamon County
2 to issue an injunction to restrain any person from violating
3 or continuing to violate any of the foregoing provisions of
4 this Section.
5 (d) When the Commissioner has reasonable cause to
6 believe that any entity which has not submitted an
7 application for licensure is conducting any of the activities
8 described in subsection (a) hereof, the Commissioner shall
9 have the power to examine all books and records of the entity
10 and any additional documentation necessary in order to
11 determine whether such entity should become licensed under
12 this Act.
13 (e) Any person, partnership, association, corporation or
14 other entity who violates any provision of this Section
15 commits a business offense and shall be fined an amount not
16 to exceed $5,000.
17 (f) Each person, partnership, association, corporation
18 or other entity conducting activities regulated by this Act
19 shall be issued one license. Each office, place of business
20 or location at which a residential mortgage licensee conducts
21 any part of his or her business must be recorded with the
22 Commissioner pursuant to Section 2-8 of this Act.
23 (g) Licensees under this Act shall solicit, broker,
24 fund, originate, service and purchase residential mortgage
25 loans only in conformity with the provisions of this Act and
26 such rules and regulations as may be promulgated by the
27 Commissioner.
28 (h) This Act applies to all entities doing business in
29 Illinois as residential mortgage bankers, as defined by "An
30 Act to provide for the regulation of mortgage bankers",
31 approved September 15, 1977, as amended, regardless of
32 whether licensed under that or any prior Act. Any existing
33 residential mortgage lender or residential mortgage broker in
34 Illinois whether or not previously licensed, must operate in
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1 accordance with this Act.
2 (i) This Act is a successor Act to and a continuance of
3 the regulation of residential mortgage bankers provided in,
4 "An Act to provide for the regulation of mortgage bankers",
5 approved September 15, 1977, as amended.
6 Entities and persons subject to the predecessor Act shall
7 be subject to this Act from and after its effective date.
8 (Source: P.A. 86-137; 87-642.)
9 (205 ILCS 635/1-4) (from Ch. 17, par. 2321-4)
10 Sec. 1-4. Definitions.
11 (a) "Residential real property" or "residential real
12 estate" shall mean real property located in this State
13 improved by a one-to-four family dwelling used or occupied,
14 wholly or partly, as the home or residence of one or more
15 persons and may refer, subject to regulations of the
16 Commissioner, to unimproved real property upon which those
17 kinds dwellings are to be constructed.
18 (b) "Making a residential mortgage loan" or "funding a
19 residential mortgage loan" shall mean for compensation or
20 gain, either directly or indirectly, advancing funds or
21 making a commitment to advance funds to a loan applicant for
22 a residential mortgage loan.
23 (c) "Soliciting, processing, placing, or negotiating a
24 residential mortgage loan" shall mean for compensation or
25 gain, either directly or indirectly, accepting or offering to
26 accept an application for a residential mortgage loan,
27 assisting or offering to assist in the processing of an
28 application for a residential mortgage loan on behalf of a
29 borrower, or negotiating or offering to negotiate the terms
30 or conditions of a residential mortgage loan with a lender on
31 behalf of a borrower including, but not limited to, the
32 submission of credit packages for the approval of lenders,
33 the preparation of residential mortgage loan closing
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1 documents, including a closing in the name of a broker.
2 (d) "Exempt entity" shall mean the following:
3 (1) (i) Any banking organization or foreign banking
4 corporation licensed by the Illinois Commissioner of
5 Banks and Real Estate or the United States Comptroller of
6 the Currency to transact business in this State; (ii) any
7 national bank, federally chartered savings and loan
8 association, federal savings bank, federal credit union;
9 (iii) any pension trust, bank trust, or bank trust
10 company; (iv) any savings and loan association, savings
11 bank, or credit union organized under the laws of this or
12 any other state; (v) any Illinois Consumer Installment
13 Loan Act licensee; (vi) any insurance company authorized
14 to transact business in this State; (vii) any entity
15 engaged solely in commercial mortgage lending; (viii) any
16 service corporation of a savings and loan association or
17 savings bank organized under the laws of this State or
18 the service corporation of a federally chartered savings
19 and loan association or savings bank having its principal
20 place of business in this State, other than a service
21 corporation licensed or entitled to reciprocity under the
22 Real Estate License Act of 1983; or (ix) any first tier
23 subsidiary of a bank, the charter of which is issued
24 under the Illinois Banking Act by the Illinois
25 Commissioner of Banks and Real Estate, or the first tier
26 subsidiary of a bank chartered by the United States
27 Comptroller of the Currency and that has its principal
28 place of business in this State, provided that the first
29 tier subsidiary is regularly examined by the Illinois
30 Commissioner of Banks and Real Estate or the Comptroller
31 of the Currency, or a consumer compliance examination is
32 regularly conducted by the Federal Reserve Board.
33 (2) Any person or entity that either (i) has a
34 physical presence in Illinois or (ii) does not originate
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1 mortgage loans in the ordinary course of business making
2 or acquiring residential mortgage loans with his or her
3 own funds for his or her own investment without intent to
4 make, acquire, or resell more than 10 residential
5 mortgage loans in any one calendar year.
6 (3) Any person employed by a licensee to assist in
7 the performance of the activities regulated by this Act
8 who is compensated in any manner by only one licensee.
9 (4) (Blank). Any person licensed pursuant to the
10 Real Estate License Act of 1983, who engages only in the
11 taking of applications and credit and appraisal
12 information to forward to a licensee or an exempt entity
13 under this Act and who is compensated by either a
14 licensee or an exempt entity under this Act, but is not
15 compensated by either the buyer (applicant) or the
16 seller.
17 (5) Any individual, corporation, partnership, or
18 other entity that originates, services, or brokers
19 residential mortgage loans, as these activities are
20 defined in this Act, and who or which receives no
21 compensation for those activities, subject to the
22 Commissioner's regulations with regard to the nature and
23 amount of compensation.
24 (6) A person who prepares supporting documentation
25 for a residential mortgage loan application taken by a
26 licensee and performs ministerial functions pursuant to
27 specific instructions of the licensee who neither
28 requires nor permits the preparer to exercise his or her
29 discretion or judgment; provided that this activity is
30 engaged in pursuant to a binding, written agreement
31 between the licensee and the preparer that:
32 (A) holds the licensee fully accountable for
33 the preparer's action; and
34 (B) otherwise meets the requirements of this
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1 Section and this Act, does not undermine the
2 purposes of this Act, and is approved by the
3 Commissioner.
4 (e) "Licensee" or "residential mortgage licensee" shall
5 mean a person, partnership, association, corporation, or any
6 other entity who or which is licensed pursuant to this Act to
7 engage in the activities regulated by this Act.
8 (f) "Mortgage loan" "residential mortgage loan" or "home
9 mortgage loan" shall mean a loan to or for the benefit of any
10 natural person made primarily for personal, family, or
11 household use, primarily secured by either a mortgage on
12 residential real property or certificates of stock or other
13 evidence of ownership interests in and proprietary leases
14 from, corporations, partnerships, or limited liability
15 companies formed for the purpose of cooperative ownership of
16 residential real property, all located in Illinois.
17 (g) "Lender" shall mean any person, partnership,
18 association, corporation, or any other entity who either
19 lends or invests money in residential mortgage loans.
20 (h) "Ultimate equitable owner" shall mean a person who,
21 directly or indirectly, owns or controls an ownership
22 interest in a corporation, foreign corporation, alien
23 business organization, trust, or any other form of business
24 organization regardless of whether the person owns or
25 controls the ownership interest through one or more persons
26 or one or more proxies, powers of attorney, nominees,
27 corporations, associations, partnerships, trusts, joint stock
28 companies, or other entities or devices, or any combination
29 thereof.
30 (i) "Residential mortgage financing transaction" shall
31 mean the negotiation, acquisition, sale, or arrangement for
32 or the offer to negotiate, acquire, sell, or arrange for, a
33 residential mortgage loan or residential mortgage loan
34 commitment.
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1 (j) "Personal residence address" shall mean a street
2 address and shall not include a post office box number.
3 (k) "Residential mortgage loan commitment" shall mean a
4 contract for residential mortgage loan financing.
5 (l) "Party to a residential mortgage financing
6 transaction" shall mean a borrower, lender, or loan broker in
7 a residential mortgage financing transaction.
8 (m) "Payments" shall mean payment of all or any of the
9 following: principal, interest and escrow reserves for taxes,
10 insurance and other related reserves, and reimbursement for
11 lender advances.
12 (n) "Commissioner" shall mean the Commissioner of Banks
13 and Real Estate or a person authorized by the Commissioner,
14 the Office of Banks and Real Estate Act, or this Act to act
15 in the Commissioner's stead .
16 (o) "Loan brokering", "brokering", or "brokerage
17 service" shall mean the act of helping to obtain from another
18 entity, for a borrower, a loan secured by residential real
19 estate situated in Illinois or assisting a borrower in
20 obtaining a loan secured by residential real estate situated
21 in Illinois in return for consideration to be paid by either
22 the borrower or the lender including, but not limited to,
23 contracting for the delivery of residential mortgage loans to
24 a third party lender and soliciting, processing, placing, or
25 negotiating residential mortgage loans.
26 (p) "Loan broker" or "broker" shall mean a person,
27 partnership, association, corporation, or limited liability
28 company, other than those persons, partnerships,
29 associations, corporations, or limited liability companies
30 exempted from licensing pursuant to Section 1-4, subsection
31 (d), of this Act, who performs the activities described in
32 subsections (c) and (o) of this Section.
33 (q) "Servicing" shall mean the collection or remittance
34 for or the right or obligation to collect or remit for any
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1 lender, noteowner, noteholder, or for a licensee's own
2 account, of payments, interests, principal, and trust items
3 such as hazard insurance and taxes on a residential mortgage
4 loan in accordance with the terms of the residential mortgage
5 loan; and includes loan payment follow-up, delinquency loan
6 follow-up, loan analysis and any notifications to the
7 borrower that are necessary to enable the borrower to keep
8 the loan current and in good standing.
9 (r) "Full service office" shall mean office and staff in
10 Illinois reasonably adequate to handle efficiently
11 communications, questions, and other matters relating to any
12 application for, or an existing home mortgage secured by
13 residential real estate situated in Illinois with respect to
14 which the licensee is brokering, funding originating,
15 purchasing, or servicing. The management and operation of
16 each full service office must include observance of good
17 business practices such as adequate, organized, and accurate
18 books and records; ample phone lines, hours of business,
19 staff training and supervision, and provision for a mechanism
20 to resolve consumer inquiries, complaints, and problems. The
21 Commissioner shall issue regulations with regard to these
22 requirements and shall include an evaluation of compliance
23 with this Section in his or her periodic examination of each
24 licensee.
25 (s) "Purchasing" shall mean the purchase of conventional
26 or government-insured mortgage loans secured by residential
27 real estate situated in Illinois from either the lender or
28 from the secondary market.
29 (t) "Borrower" shall mean the person or persons who seek
30 the services of a loan broker, originator, or lender.
31 (u) "Originating" shall mean the issuing of commitments
32 for and funding of residential mortgage loans.
33 (v) "Loan brokerage agreement" shall mean a written
34 agreement in which a broker or loan broker agrees to do
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1 either of the following:
2 (1) obtain a residential mortgage loan for the
3 borrower or assist the borrower in obtaining a
4 residential mortgage loan; or
5 (2) consider making a residential mortgage loan to
6 the borrower.
7 (w) "Advertisement" shall mean the attempt by
8 publication, dissemination, or circulation to induce,
9 directly or indirectly, any person to enter into a
10 residential mortgage loan agreement or residential mortgage
11 loan brokerage agreement relative to a mortgage secured by
12 residential real estate situated in Illinois.
13 (x) "Residential Mortgage Board" shall mean the
14 Residential Mortgage Board created in Section 1-5 of this
15 Act.
16 (y) "Government-insured mortgage loan" shall mean any
17 mortgage loan made on the security of residential real estate
18 insured by the Department of Housing and Urban Development or
19 Farmers Home Loan Administration, or guaranteed by the
20 Veterans Administration.
21 (z) "Annual audit" shall mean a certified audit of the
22 licensee's books and records and systems of internal control
23 performed by a certified public accountant in accordance with
24 generally accepted accounting principles and generally
25 accepted auditing standards.
26 (aa) "Financial institution" shall mean a savings and
27 loan association, savings bank, credit union, or a bank
28 organized under the laws of Illinois or a savings and loan
29 association, savings bank, credit union or a bank organized
30 under the laws of the United States and headquartered in
31 Illinois.
32 (bb) "Escrow agent" shall mean a third party, individual
33 or entity charged with the fiduciary obligation for holding
34 escrow funds on a residential mortgage loan pending final
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1 payout of those funds in accordance with the terms of the
2 residential mortgage loan.
3 (cc) "Net worth" shall have the meaning ascribed thereto
4 in Section 3-5 of this Act.
5 (dd) "Affiliate" shall mean:
6 (1) any entity that directly controls or is
7 controlled by the licensee and any other company that is
8 directly affecting activities regulated by this Act that
9 is controlled by the company that controls the licensee;
10 (2) any entity:
11 (A) that is controlled, directly or
12 indirectly, by a trust or otherwise, by or for the
13 benefit of shareholders who beneficially or
14 otherwise control, directly or indirectly, by trust
15 or otherwise, the licensee or any company that
16 controls the licensee; or
17 (B) a majority of the directors or trustees of
18 which constitute a majority of the persons holding
19 any such office with the licensee or any company
20 that controls the licensee;
21 (3) any company, including a real estate investment
22 trust, that is sponsored and advised on a contractual
23 basis by the licensee or any subsidiary or affiliate of
24 the licensee.
25 The Commissioner may define by rule and regulation any
26 terms used in this Act for the efficient and clear
27 administration of this Act.
28 (ee) "First tier subsidiary" shall be defined by
29 regulation incorporating the comparable definitions used by
30 the Office of the Comptroller of the Currency and the
31 Illinois Commissioner of Banks and Real Estate.
32 (ff) "Gross delinquency rate" means the quotient
33 determined by dividing (1) the sum of (i) the number of
34 government-insured residential mortgage loans funded or
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1 purchased by a licensee in the preceding calendar year that
2 are delinquent and (ii) the number of conventional
3 residential mortgage loans funded or purchased by the
4 licensee in the preceding calendar year that are delinquent
5 by (2) the sum of (i) the number of government-insured
6 residential mortgage loans funded or purchased by the
7 licensee in the preceding calendar year and (ii) the number
8 of conventional residential mortgage loans funded or
9 purchased by the licensee in the preceding calendar year.
10 (gg) "Delinquency rate factor" means the factor set by
11 rule of the Commissioner that is multiplied by the average
12 gross delinquency rate of licensees, determined annually for
13 the immediately preceding calendar year, for the purpose of
14 determining which licensees shall be examined by the
15 Commissioner pursuant to subsection (b) of Section 4-8 of
16 this Act.
17 (Source: P.A. 89-355, eff. 8-17-95; 89-508, eff. 7-3-96.)
18 (205 ILCS 635/4-1) (from Ch. 17, par. 2324-1)
19 Sec. 4-1. Commissioner of Banks and Real Estate;
20 functions, powers, and duties. The functions, powers, and
21 duties of the Commissioner of Banks and Real Estate shall
22 include the following:
23 (a) To issue or refuse to issue any license as provided
24 by this Act;
25 (b) To revoke or suspend for cause any license issued
26 under this Act;
27 (c) To keep records of all licenses issued under this
28 Act;
29 (d) To receive, consider, investigate, and act upon
30 complaints made by any person in connection with any
31 residential mortgage licensee in this State;
32 (e) To consider and act upon any recommendations from
33 the Residential Mortgage Board;
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1 (f) To prescribe the forms of and receive:
2 (1) applications for licenses; and
3 (2) all reports and all books and records required
4 to be made by any licensee under this Act, including
5 annual audited financial statements and annual reports of
6 mortgage activity;
7 (g) To adopt rules and regulations necessary and proper
8 for the administration of this Act;
9 (h) To subpoena documents and witnesses and compel their
10 attendance and production, to administer oaths, and to
11 require the production of any books, papers, or other
12 materials relevant to any inquiry authorized by this Act;
13 (i) To require information with regard to any license
14 applicant as he or she may deem desirable, with due regard to
15 the paramount interests of the public as to the experience,
16 background, honesty, truthfulness, integrity, and competency
17 of the license applicant as to financial transactions
18 involving primary or subordinate mortgage financing, and
19 where the license applicant is an entity other than an
20 individual, as to the honesty, truthfulness, integrity, and
21 competency of any officer or director of the corporation,
22 association, or other entity, or the members of a
23 partnership;
24 (j) To examine the books and records of every licensee
25 under this Act at intervals as specified in Section 4-2;
26 (k) To enforce provisions of this Act;
27 (l) To levy fees, fines, and charges for services
28 performed in administering this Act; the aggregate of all
29 fees collected by the Commissioner on and after the effective
30 date of this Act shall be paid promptly after receipt of the
31 same, accompanied by a detailed statement thereof, into the
32 Savings and Residential Finance Regulatory Fund; the amounts
33 deposited into that Fund shall be used for the ordinary and
34 contingent expenses of the Office of Banks and Real Estate.
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1 Nothing in this Act shall prevent continuing the practice of
2 paying expenses involving salaries, retirement, social
3 security, and State-paid insurance of State officers by
4 appropriation from the General Revenue Fund;.
5 (m) To appoint examiners, supervisors, experts, and
6 special assistants as needed to effectively and efficiently
7 administer this Act; and
8 (n) To conduct hearings for the purpose of:
9 (1) appeals of orders of the Commissioner;
10 (2) suspensions or revocations of licenses, or
11 fining of licensees;
12 (3) investigating:
13 (i) complaints against licensees; or
14 (ii) annual gross delinquency rates; and
15 (4) carrying out the purposes of this Act; and.
16 (o) To maintain a registry of persons employed by a
17 licensee to assist in the performance of activities regulated
18 under this Act.
19 (Source: P.A. 89-355, eff. 8-17-95; 89-508, eff. 7-3-96.)
20 (205 ILCS 635/4-2) (from Ch. 17, par. 2324-2)
21 Sec. 4-2. Examination; prohibited activities.
22 (a) The business affairs of a licensee under this Act
23 may, for cause, shall be examined for compliance with this
24 Act as often as the Commissioner deems necessary and proper.
25 The Commissioner shall promulgate rules with respect to the
26 frequency and manner of examination. The Commissioner shall
27 appoint a suitable person to perform such examination. The
28 Commissioner and his appointees may examine the entire books,
29 records, documents, and operations of each licensee and may
30 examine any of the licensee's officers, directors, employees
31 and agents under oath.
32 (b) The Commissioner shall prepare a full and detailed
33 report of each licensee's examination, shall issue a copy of
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1 such report to each licensee's principals, officers, or
2 directors and shall take appropriate steps to ensure
3 correction of violations of this Act.
4 (c) Affiliates of a licensee shall be subject to
5 examination by the Commissioner on the same terms as the
6 licensee, but only when reports from, or examination of a
7 licensee provides for documented evidence of unlawful
8 activity between a licensee and affiliate benefiting,
9 affecting or deriving from the activities regulated by this
10 Act.
11 (d) The expenses of any examination of the licensee and
12 affiliates shall be borne by the licensee and assessed by the
13 Commissioner as established by regulation.
14 (e) Upon completion of the examination, the Commissioner
15 shall issue a report to the licensee. The examination
16 report, and the work papers of the report shall belong to the
17 Commissioner's office and may not be disclosed to anyone
18 other than the licensee, law enforcement officials or other
19 regulatory agencies that shall be defined in rules
20 promulgated by the Commissioner, or to a party presenting a
21 lawful subpoena to the Office of the Commissioner. Reports
22 required of licensees by the Commissioner under this Act and
23 results of examinations performed by the Commissioner under
24 this Act shall be the property of only the licensee and the
25 Commissioner. Access under this Act to the books and records
26 of each licensee shall be limited to the Commissioner and his
27 agents as provided in this Act and to the licensee and its
28 authorized agents and designees. No other person shall have
29 access to the books and records of a licensee under this Act.
30 (f) The Commissioner, deputy commissioners, and
31 employees of the Office of Banks and Real Estate shall be
32 subject to the restrictions provided in Section 2.5 of the
33 Office of Banks and Real Estate Act including, without
34 limitation, the restrictions on (i) owning shares of stock or
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1 holding any other equity interest in an entity regulated
2 under this Act or in any corporation or company that owns or
3 controls an entity regulated under this Act; (ii) being an
4 officer, director, employee, or agent of an entity regulated
5 under this Act; and (iii) obtaining a loan or accepting a
6 gratuity from an entity regulated under this Act.
7 (g) After the initial examination for those licensees
8 whose only mortgage activity is servicing fewer than 500
9 Illinois residential loans, the examination required in
10 subsection (a) may be waived upon submission of a letter from
11 the licensee's independent certified auditor that the
12 licensee serviced fewer than 500 Illinois residential loans
13 during the year in which the audit was performed.
14 (Source: P.A. 89-355, eff. 8-17-95; 89-508, eff. 7-3-96.)
15 (205 ILCS 635/4-8) (from Ch. 17, par. 2324-8)
16 Sec. 4-8. Gross delinquency rate; examination.
17 (a) The gross delinquency rate of each licensee shall be
18 determined annually by the Commissioner. The gross
19 delinquency rate shall be the figure used by the Commissioner
20 to monitor the delinquency performance of licensees dealing
21 in mortgages.
22 (b) The Commissioner shall conduct an examination of
23 each licensee that (i) services mortgage loans, makes credit
24 decisions to fund mortgage loans, or funds mortgage loans
25 using its own money and (ii) has having a gross delinquency
26 rate equal to or greater than the product of (1) the average
27 gross delinquency rate of all licensees for the immediately
28 preceding calendar year, as determined by the Commissioner
29 under subsection (a) and (2) the delinquency rate factor as
30 set by rule of the Commissioner.
31 (c) Notwithstanding the provisions of subsection (b), a
32 licensee with an annual gross delinquency rate that is less
33 than or equal to 5% for the immediately preceding calendar
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1 year shall not be examined by the Commissioner for that
2 calendar year. This subsection shall not be construed as a
3 limitation of the Commissioner's examination authority under
4 Section 4-2 of this Act or as otherwise provided in this Act.
5 (d) The purpose of the examination under subsection (b)
6 shall be to determine whether the gross delinquency rate of
7 the licensee has resulted from practices which deviate from
8 sound and accepted mortgage underwriting practices, including
9 but not limited to credit fraud, appraisal fraud and property
10 inspection fraud. For the purpose of conducting this
11 examination, the Commissioner may accept materials prepared
12 for the U.S. Department of Housing and Urban Development. At
13 the conclusion of the examination, the Commissioner shall
14 make his or her findings available to the Residential
15 Mortgage Board.
16 (e) The Commissioner, at his or her discretion, may hold
17 public hearings, or at the direction of the Residential
18 Mortgage Board, shall hold public hearings. Such testimony
19 shall be by a homeowner or mortgagor or his agent, whose
20 residential interest is affected by the activities of the
21 residential mortgage licensee subject to such hearing. At
22 such public hearing, a witness may present testimony on his
23 or her behalf concerning only his or her home, or home
24 mortgage or a witness may authorize a third party to appear
25 on his or her behalf. The testimony shall be restricted to
26 information and comments related to a specific residence or
27 specific residential mortgage application or applications for
28 a residential mortgage or residential loan transaction. The
29 testimony must be preceded by either a letter of complaint or
30 a completed consumer complaint form prescribed by the
31 Commissioner.
32 (f) The Commissioner shall, at the conclusion of the
33 public hearings, release his or her findings and shall also
34 make public any action taken with respect to the licensee.
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1 The Commissioner shall also give full consideration to the
2 findings of this examination whenever reapplication is made
3 by the licensee for a new license under this Act.
4 (g) A licensee that is examined pursuant to subsection
5 (b) shall submit to the Commissioner a plan which shall be
6 designed to reduce that licensee's gross delinquency rate to
7 a figure that is less than or equal to the average gross
8 delinquency rate for all licensees for the calendar year for
9 which the delinquency data was submitted. The plan shall be
10 implemented by the licensee as approved by the Commissioner.
11 A licensee that is examined pursuant to subsection (b) shall
12 report monthly, for a one year period, one, 2, and 3 month
13 delinquencies.
14 (h) Whenever the Commissioner finds that a licensee's
15 gross delinquency rate on insured mortgages is unusually high
16 within a particular geographic area, he or she shall require
17 that licensee to submit such information as is necessary to
18 determine whether that licensee's practices have constituted
19 credit fraud, appraisal fraud or property inspection fraud.
20 The Commissioner shall promulgate such rules as are necessary
21 to determine whether any licensee's gross delinquency rate is
22 unusually high within a particular area.
23 (Source: P.A. 89-355, eff. 1-1-96; 89-626, eff. 8-9-96.)
24 (205 ILCS 635/4-10) (from Ch. 17, par. 2324-10)
25 Sec. 4-10. Rules and Regulations of the Commissioner.
26 (a) In addition to such powers as may be prescribed by
27 this Act, the Commissioner is hereby authorized and empowered
28 to promulgate regulations consistent with the purposes of
29 this Act, including but not limited to:
30 (1) Such rules and regulations in connection with
31 the activities of licensees as may be necessary and
32 appropriate for the protection of consumers in this
33 State;
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1 (2) Such rules and regulations as may be necessary
2 and appropriate to define improper or fraudulent business
3 practices in connection with the activities of licensees
4 in making mortgage loans;
5 (3) Such rules and regulations as may define the
6 terms used in this Act and as may be necessary and
7 appropriate to interpret and implement the provisions of
8 this Act; and
9 (4) Such rules and regulations as may be necessary
10 for the enforcement of this Act.
11 (b) The Commissioner is hereby authorized and empowered
12 to make such specific rulings, demands, and findings as he or
13 she may deem necessary for the proper conduct of the mortgage
14 lending industry.
15 (c) The Commissioner may not make any rule that directly
16 or indirectly limits fees charged to consumers if the fees
17 are fully disclosed, subject to a written agreement, and not
18 in violation of any law. The Commissioner may not restrict a
19 licensee's ability to pursue remedies against a consumer
20 under a contract or agreement with the consumer.
21 (Source: P.A. 85-735.)