[ Search ] [ Legislation ] [ Bill Summary ]
[ Home ] [ Back ] [ Bottom ]
| [ Engrossed ] | [ Enrolled ] | [ House Amendment 001 ] |
| [ House Amendment 002 ] | [ House Amendment 003 ] | [ Senate Amendment 001 ] |
90_SB1076
New Act
Creates the Mortgage Insurance Limitation and
Notification Act. Prohibits mortgagees from requiring
mortgage insurance after the mortgagor has reduced the amount
of the loan to 80% of the original amount of the loan.
Effective January 1, 1998.
LRB9003310JSgc
LRB9003310JSgc
1 AN ACT concerning mortgage insurance.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 1. Short title. This Act may be cited as the
5 Mortgage Insurance Limitation and Notification Act.
6 Section 5. Definitions.
7 "Mortgage insurance" means mortgage life insurance (term
8 or ordinary), mortgage disability insurance, mortgage
9 accidental death insurance, or any combination thereof,
10 written in connection with a credit transaction that is
11 secured by a mortgage on a single family residence by a
12 natural person.
13 "Mortgagor" means a natural person whose interest in a
14 single family residence is the subject of a mortgage for
15 which the mortgagee has required mortgage insurance.
16 "Mortgagee" means the holder of an indebtedness secured
17 by a mortgage of a single family residence.
18 Section 10. Limitation. A mortgagee may not require a
19 mortgagor to hold and pay for mortgage insurance with respect
20 to a mortgage of a single family residence after the amount
21 owed on the mortgage has been reduced to 80% of the original
22 amount of the loan by payments by the mortgagor.
23 Section 15. Notification. When the amount owed on a
24 mortgage has been reduced to 80% of the original amount of
25 the loan, the mortgagee shall notify the mortgagor in writing
26 on a piece of paper separate from any other notices or
27 documents issued by the mortgagee that the amount owed on the
28 mortgage has been reduced to 80% or less of the original
29 amount of the loan and that the mortgagor has the right to
-2- LRB9003310JSgc
1 cancel the mortgage insurance. The notice shall include
2 information disclosing the procedures necessary to cancel the
3 mortgage insurance.
4 Section 20. Penalty; damages.
5 (a) A mortgagee that violates this Act is guilty of a
6 petty offense and shall be fined $500.
7 (b) A mortgagee that violates this Act is liable for
8 damages to the mortgagor injured by the violation.
9 Section 99. Effective date. This Act takes effect
10 January 1, 1998.