Illinois General Assembly - Full Text of Public Act 099-0015
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Public Act 099-0015





Public Act 099-0015
HB3369 EnrolledLRB099 10087 MGM 30310 b

    AN ACT concerning regulation.
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
    Section 5. The Residential Mortgage License Act of 1987 is
amended by changing Sections 2-1, 2-2, 2-6, 4-5, and 4-8 as
    (205 ILCS 635/2-1)  (from Ch. 17, par. 2322-1)
    Sec. 2-1. Licensee Name.
    (a) No person, partnership, association, corporation,
limited liability company, or other entity engaged in the
business regulated by this Act shall operate such business
under a name other than the real names of the entity and
individuals conducting such business. Such business may in
addition operate under , an assumed corporate name pursuant to
the Business Corporation Act of 1983, an assumed limited
liability company name pursuant to the Limited Liability
Company Act, or an assumed business name pursuant to the
Assumed Business Name Act.
    (b) A knowing violation of this Section constitutes an
unlawful practice within the meaning of this Act, and in
addition to the administrative relief available under this Act,
may be prosecuted for the commission of a Class A misdemeanor.
A person who is convicted of a second or subsequent violation
of this Section is guilty of a Class 4 felony.
(Source: P.A. 89-355, eff. 8-17-95.)
    (205 ILCS 635/2-2)
    Sec. 2-2. Application process; investigation; fee.
    (a) The Secretary shall issue a license upon completion of
all of the following:
        (1) The filing of an application for license with the
    Director or the Nationwide Mortgage Licensing System and
    Registry as approved by the Director.
        (2) The filing with the Secretary of a listing of
    judgments entered against, and bankruptcy petitions by,
    the license applicant for the preceding 10 years.
        (3) The payment, in certified funds, of investigation
    and application fees, the total of which shall be in an
    amount equal to $2,700 annually. To comply with the common
    renewal date and requirements of the Nationwide Mortgage
    Licensing System and Registry, the term of initial licenses
    may be extended or shortened with applicable fees prorated
    or combined accordingly.
        (4) Except for a broker applying to renew a license,
    the filing of an audited balance sheet including all
    footnotes prepared by a certified public accountant in
    accordance with generally accepted accounting principles
    and generally accepted auditing standards which evidences
    that the applicant meets the net worth requirements of
    Section 3-5. Notwithstanding the requirements of this
    subsection, an applicant that is a subsidiary may submit
    audited consolidated financial statements of its parent,
    intermediary parent, or ultimate parent as long as the
    consolidated statements are supported by consolidating
    statements which include the applicant's financial
    statement. If the consolidating statements are unaudited,
    the applicant's chief financial officer shall attest to the
    applicant's financial statements disclosed in the
    consolidating statements.
        (5) The filing of proof satisfactory to the
    Commissioner that the applicant, the members thereof if the
    applicant is a partnership or association, the members or
    managers thereof that retain any authority or
    responsibility under the operating agreement if the
    applicant is a limited liability company, or the officers
    thereof if the applicant is a corporation have 3 years
    experience preceding application in real estate finance.
    Instead of this requirement, the applicant and the
    applicant's officers or members, as applicable, may
    satisfactorily complete a program of education in real
    estate finance and fair lending, as approved by the
    Commissioner, prior to receiving the initial license. The
    Commissioner shall promulgate rules regarding proof of
    experience requirements and educational requirements and
    the satisfactory completion of those requirements. The
    Commissioner may establish by rule a list of duly licensed
    professionals and others who may be exempt from this
        (6) An investigation of the averments required by
    Section 2-4, which investigation must allow the
    Commissioner to issue positive findings stating that the
    financial responsibility, experience, character, and
    general fitness of the license applicant and of the members
    thereof if the license applicant is a partnership or
    association, of the officers and directors thereof if the
    license applicant is a corporation, and of the managers and
    members that retain any authority or responsibility under
    the operating agreement if the license applicant is a
    limited liability company are such as to command the
    confidence of the community and to warrant belief that the
    business will be operated honestly, fairly and efficiently
    within the purpose of this Act. If the Commissioner shall
    not so find, he or she shall not issue such license, and he
    or she shall notify the license applicant of the denial.
    The Commissioner may impose conditions on a license if the
Commissioner determines that the conditions are necessary or
appropriate. These conditions shall be imposed in writing and
shall continue in effect for the period prescribed by the
    (b) All licenses shall be issued to the license applicant.
    Upon receipt of such license, a residential mortgage
licensee shall be authorized to engage in the business
regulated by this Act. Such license shall remain in full force
and effect until it expires without renewal, is surrendered by
the licensee or revoked or suspended as hereinafter provided.
(Source: P.A. 97-891, eff. 8-3-12; 98-1081, eff. 1-1-15.)
    (205 ILCS 635/2-6)
    Sec. 2-6. License issuance and renewal; fee.
    (a) Licenses Beginning July 1, 2003, licenses shall be
renewed every year using on the anniversary of the date of
issuance of the original license, or the common renewal date of
the Nationwide Mortgage Licensing System and Registry as
adopted by the Director. To comply with the common renewal date
of the Nationwide Mortgage Licensing System and Registry, the
term of existing licenses may be extended or shortened with
applicable fees prorated accordingly. Properly completed
renewal application forms and filing fees may must be received
by the Secretary 60 days prior to the license expiration
renewal date, but, to be deemed timely, the completed renewal
application forms and filing fees must be received by the
Secretary no later than 30 days prior to the license expiration
    (b) It shall be the responsibility of each licensee to
accomplish renewal of its license; failure of the licensee to
receive renewal forms absent a request sent by certified mail
for such forms will not waive said responsibility. Failure by a
licensee to submit a properly completed renewal application
form and fees in a timely fashion, absent a written extension
from the Secretary, will result in the license becoming
inactive. in the assessment of additional fees, as follows:
        (1) A fee of $567.50 will be assessed to the licensee
    30 days after the proper renewal date and $1,135 each month
    thereafter, until the license is either renewed or expires
    pursuant to Section 2-6, subsections (c) and (d), of this
        (2) Such fee will be assessed without prior notice to
    the licensee, but will be assessed only in cases wherein
    the Secretary has in his or her possession documentation of
    the licensee's continuing activity for which the unrenewed
    license was issued.
    (c) A license which is not renewed by the date required in
this Section shall automatically become inactive. No activity
regulated by this Act shall be conducted by the licensee when a
license becomes inactive. The Commissioner may require the
licensee to provide a plan for the disposition of any
residential mortgage loans not closed or funded when the
license becomes inactive. The Commissioner may allow a licensee
with an inactive license to conduct activities regulated by
this Act for the sole purpose of assisting borrowers in the
closing or funding of loans for which the loan application was
taken from a borrower while the license was active. An inactive
license may be reactivated by the Commissioner upon payment of
the renewal fee, and payment of a reactivation fee equal to the
renewal fee.
    (d) (Blank) A license which is not renewed within one year
of becoming inactive shall expire.
    (e) A licensee ceasing an activity or activities regulated
by this Act and desiring to no longer be licensed shall so
inform the Commissioner in writing and, at the same time,
convey any the license issued and all other symbols or indicia
of licensure. The licensee shall include a plan for the
withdrawal from regulated business, including a timetable for
the disposition of the business, and comply with the surrender
guidelines or requirements of the Director. Upon receipt of
such written notice, the Commissioner shall post the
cancellation or issue a certified statement canceling the
(Source: P.A. 95-1047, eff. 4-6-09; 96-112, eff. 7-31-09;
96-1000, eff. 7-2-10.)
    (205 ILCS 635/4-5)  (from Ch. 17, par. 2324-5)
    Sec. 4-5. Suspension, revocation of licenses; fines.
    (a) Upon written notice to a licensee, the Commissioner may
suspend or revoke any license issued pursuant to this Act if he
or she shall make a finding of one or more of the following in
the notice that:
        (1) Through separate acts or an act or a course of
    conduct, the licensee has violated any provisions of this
    Act, any rule or regulation promulgated by the Commissioner
    or of any other law, rule or regulation of this State or
    the United States.
        (2) Any fact or condition exists which, if it had
    existed at the time of the original application for such
    license would have warranted the Commissioner in refusing
    originally to issue such license.
        (3) If a licensee is other than an individual, any
    ultimate equitable owner, officer, director, or member of
    the licensed partnership, association, corporation, or
    other entity has so acted or failed to act as would be
    cause for suspending or revoking a license to that party as
    an individual.
    (b) No license shall be suspended or revoked, except as
provided in this Section, nor shall any licensee be fined
without notice of his or her right to a hearing as provided in
Section 4-12 of this Act.
    (c) The Commissioner, on good cause shown that an emergency
exists, may suspend any license for a period not exceeding 180
days, pending investigation. Upon a showing that a licensee has
failed to meet the experience or educational requirements of
Section 2-2 or the requirements of subsection (g) of Section
3-2, the Commissioner shall suspend, prior to hearing as
provided in Section 4-12, the license until those requirements
have been met.
    (d) The provisions of subsection (e) of Section 2-6 of this
Act shall not affect a licensee's civil or criminal liability
for acts committed prior to surrender of a license.
    (e) No revocation, suspension or surrender of any license
shall impair or affect the obligation of any pre-existing
lawful contract between the licensee and any person.
    (f) Every license issued under this Act shall remain in
force and effect until the same shall have expired without
renewal, have been surrendered, revoked or suspended in
accordance with the provisions of this Act, but the
Commissioner shall have authority to reinstate a suspended
license or to issue a new license to a licensee whose license
shall have been revoked if no fact or condition then exists
which would have warranted the Commissioner in refusing
originally to issue such license under this Act.
    (g) Whenever the Commissioner shall revoke or suspend a
license issued pursuant to this Act or fine a licensee under
this Act, he or she shall forthwith execute a written order to
that effect. The Commissioner shall publish notice of such
order in the Illinois Register and post notice of the order on
an agency Internet site maintained by the Commissioner or on
the Nationwide Mortgage Licensing System and Registry and shall
forthwith serve a copy of such order upon the licensee. Any
such order may be reviewed in the manner provided by Section
4-12 of this Act.
    (h) When the Commissioner finds any person in violation of
the grounds set forth in subsection (i), he or she may enter an
order imposing one or more of the following penalties:
        (1) Revocation of license;
        (2) Suspension of a license subject to reinstatement
    upon satisfying all reasonable conditions the Commissioner
    may specify;
        (3) Placement of the licensee or applicant on probation
    for a period of time and subject to all reasonable
    conditions as the Commissioner may specify;
        (4) Issuance of a reprimand;
        (5) Imposition of a fine not to exceed $25,000 for each
    count of separate offense, provided that a fine may be
    imposed not to exceed $75,000 for each separate count of
    offense of paragraph (2) of subsection (i) of this Section;
        (6) Denial of a license.
    (i) The following acts shall constitute grounds for which
the disciplinary actions specified in subsection (h) above may
be taken:
        (1) Being convicted or found guilty, regardless of
    pendency of an appeal, of a crime in any jurisdiction which
    involves fraud, dishonest dealing, or any other act of
    moral turpitude;
        (2) Fraud, misrepresentation, deceit or negligence in
    any mortgage financing transaction;
        (3) A material or intentional misstatement of fact on
    an initial or renewal application;
        (4) Failure to follow the Commissioner's regulations
    with respect to placement of funds in escrow accounts;
        (5) Insolvency or filing under any provision of the
    Bankruptcy Code as a debtor;
        (6) Failure to account or deliver to any person any
    property such as any money, fund, deposit, check, draft,
    mortgage, or other document or thing of value, which has
    come into his or her hands and which is not his or her
    property or which he or she is not in law or equity
    entitled to retain, under the circumstances and at the time
    which has been agreed upon or is required by law or, in the
    absence of a fixed time, upon demand of the person entitled
    to such accounting and delivery;
        (7) Failure to disburse funds in accordance with
        (8) Any misuse, misapplication, or misappropriation of
    trust funds or escrow funds;
        (9) Having a license, or the equivalent, to practice
    any profession or occupation revoked, suspended, or
    otherwise acted against, including the denial of licensure
    by a licensing authority of this State or another state,
    territory or country for fraud, dishonest dealing or any
    other act of moral turpitude;
        (10) Failure to issue a satisfaction of mortgage when
    the residential mortgage has been executed and proceeds
    were not disbursed to the benefit of the mortgagor and when
    the mortgagor has fully paid licensee's costs and
        (11) Failure to comply with any order of the
    Commissioner or rule made or issued under the provisions of
    this Act;
        (12) Engaging in activities regulated by this Act
    without a current, active license unless specifically
    exempted by this Act;
        (13) Failure to pay in a timely manner any fee, charge
    or fine under this Act;
        (14) Failure to maintain, preserve, and keep available
    for examination, all books, accounts or other documents
    required by the provisions of this Act and the rules of the
        (15) Refusing, obstructing, evading, or unreasonably
    delaying an investigation, information request, or
    examination authorized under this Act, or refusing,
    obstructing, evading, or unreasonably delaying compliance
    with the Director's subpoena or subpoena duces tecum;
        (16) A pattern of substantially underestimating the
    maximum closing costs;
        (17) Failure to comply with or violation of any
    provision of this Act;
        (18) Failure to comply with or violation of any
    provision of Article 3 of the Residential Real Property
    Disclosure Act.
    (j) A licensee shall be subject to the disciplinary actions
specified in this Act for violations of subsection (i) by any
officer, director, shareholder, joint venture, partner,
ultimate equitable owner, or employee of the licensee.
    (k) Such licensee shall be subject to suspension or
revocation for unauthorized employee actions only if there is a
pattern of repeated violations by employees or the licensee has
knowledge of the violations, or there is substantial harm to a
    (l) Procedure for surrender of license:
        (1) The Commissioner may, after 10 days notice by
    certified mail to the licensee at the address set forth on
    the license, stating the contemplated action and in general
    the grounds therefor and the date, time and place of a
    hearing thereon, and after providing the licensee with a
    reasonable opportunity to be heard prior to such action,
    fine such licensee an amount not exceeding $25,000 per
    violation, or revoke or suspend any license issued
    hereunder if he or she finds that:
            (i) The licensee has failed to comply with any
        provision of this Act or any order, decision, finding,
        rule, regulation or direction of the Commissioner
        lawfully made pursuant to the authority of this Act; or
            (ii) Any fact or condition exists which, if it had
        existed at the time of the original application for the
        license, clearly would have warranted the Commissioner
        in refusing to issue the license.
        (2) Any licensee may submit application to surrender a
    license, but upon the Director approving the surrender, it
    shall not affect the licensee's civil or criminal liability
    for acts committed prior to surrender or entitle the
    licensee to a return of any part of the license fee.
(Source: P.A. 96-112, eff. 7-31-09; 97-891, eff. 8-3-12.)
    (205 ILCS 635/4-8)  (from Ch. 17, par. 2324-8)
    Sec. 4-8. Delinquency Default rate; examination.
    (a) The Commissioner shall obtain from the U.S. Department
of Housing and Urban Development on a semi-annual basis that
Department's loan delinquency data default claim rates for
endorsements issued by that Department.
    (b) The Commissioner shall conduct as part of an
examination of each licensee a review of the licensee's loan
delinquency data having a default rate equal to or greater than
    This subsection shall not be construed as a limitation of
the Commissioner's examination authority under Section 4-2 of
this Act or as otherwise provided in this Act. The Commissioner
may require a licensee to provide loan delinquency default data
as the Commissioner deems necessary for the proper enforcement
of the Act.
    (c) The purpose of the examination under subsection (b)
shall be to determine whether the loan delinquency data default
rate of the licensee has resulted from practices which deviate
from sound and accepted mortgage underwriting practices,
including but not limited to credit fraud, appraisal fraud and
property inspection fraud. For the purpose of conducting this
examination, the Commissioner may accept materials prepared
for the U.S. Department of Housing and Urban Development. At
the conclusion of the examination, the Commissioner shall make
his or her findings available to the Residential Mortgage
    (d) The Commissioner, at his or her discretion, may hold
public hearings, or at the direction of the Residential
Mortgage Board, shall hold public hearings. Such testimony
shall be by a homeowner or mortgagor or his agent, whose
residential interest is affected by the activities of the
residential mortgage licensee subject to such hearing. At such
public hearing, a witness may present testimony on his or her
behalf concerning only his or her home, or home mortgage or a
witness may authorize a third party to appear on his or her
behalf. The testimony shall be restricted to information and
comments related to a specific residence or specific
residential mortgage application or applications for a
residential mortgage or residential loan transaction. The
testimony must be preceded by either a letter of complaint or a
completed consumer complaint form prescribed by the
    (e) The Commissioner shall, at the conclusion of the public
hearings, release his or her findings and shall also make
public any action taken with respect to the licensee. The
Commissioner shall also give full consideration to the findings
of this examination whenever reapplication is made by the
licensee for a new license under this Act.
    (f) A licensee that is examined pursuant to subsection (b)
shall submit to the Commissioner a plan which shall be designed
to reduce that licensee's loan delinquencies default rate to a
figure that is less than 5%. The plan shall be implemented by
the licensee as approved by the Commissioner. A licensee that
is examined pursuant to subsection (b) shall report monthly,
for a one year period, one, 2, and 3 month loan delinquencies
    (g) Whenever the Commissioner finds that a licensee's loan
delinquencies default rate on insured mortgages is unusually
high within a particular geographic area, he or she shall
require that licensee to submit such information as is
necessary to determine whether that licensee's practices have
constituted credit fraud, appraisal fraud or property
inspection fraud. The Commissioner shall promulgate such rules
as are necessary to determine whether any licensee's loan
delinquencies are default rate is unusually high within a
particular area.
(Source: P.A. 89-355, eff. 1-1-96; 89-626, eff. 8-9-96; 90-301,
eff. 8-1-97.)

Effective Date: 1/1/2016