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Public Act 099-0150 | ||||
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AN ACT concerning business.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The High Risk Home Loan Act is amended by | ||||
changing Section 10 as follows:
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(815 ILCS 137/10)
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(Text of Section before P.A. 97-849 takes effect ) | ||||
Sec. 10. Definitions. As used in this Act:
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"Approved credit counselor" means a credit counselor | ||||
approved by the
Director of Financial Institutions.
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"Borrower" means a natural person who seeks or obtains a | ||||
high risk
home loan.
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"Commissioner" means the Commissioner of the Office of | ||||
Banks and Real
Estate.
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"Department" means the Department of Financial | ||||
Institutions.
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"Director" means the Director of Financial Institutions.
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"Good faith" means honesty in fact in the conduct or | ||||
transaction concerned.
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"High risk home loan"
means a home equity loan in which (i) | ||||
at the time of origination, the annual
percentage rate
exceeds | ||||
by more than 6 percentage points in the case of a first lien | ||||
mortgage,
or
by more than 8 percentage points in the case of a |
junior mortgage, the yield on
U.S. Treasury securities having | ||
comparable periods of maturity to the loan
maturity as of the | ||
fifteenth day of the month immediately preceding the month
in
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which the application for the loan is received by the lender or | ||
(ii) the total
points
and fees payable by the consumer at or | ||
before closing will exceed the greater
of
5% of the total loan | ||
amount or $800. The $800 figure shall be adjusted annually
on | ||
January 1 by the annual percentage change in the Consumer Price | ||
Index for
All Urban Consumers for all items published by the | ||
United States Department of
Labor.
"High risk home loan"
does
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not include a loan that is made primarily for a business | ||
purpose unrelated to
the
residential real property securing the | ||
loan or to an open-end credit plan
subject to
12 CFR 226 (2000, | ||
no subsequent amendments or editions are included).
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"Home equity loan" means any loan secured by the borrower's | ||
primary
residence where the proceeds are not used as purchase | ||
money for the
residence.
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"Lender" means a natural or artificial person who | ||
transfers, deals in,
offers, or makes a high risk home loan. | ||
"Lender" includes, but is not limited
to,
creditors and
brokers | ||
who transfer, deal in, offer, or make high risk home loans. | ||
"Lender"
does not include purchasers, assignees, or subsequent | ||
holders of high risk home
loans.
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"Office" means the Office of Banks and Real Estate.
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"Points and fees" means all items required to be disclosed | ||
as points and
fees under 12 CFR 226.32 (2000, no subsequent |
amendments or editions
included); the premium of any single | ||
premium credit life, credit disability,
credit
unemployment, | ||
or any other life or health insurance that is financed directly
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or
indirectly into the loan; and compensation paid directly or | ||
indirectly to a
mortgage
broker, including a broker that | ||
originates a loan in its own name in a
table-funded
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transaction, not otherwise included in 12 CFR 226.4.
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"Reasonable" means fair, proper, just, or prudent under the | ||
circumstances.
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"Servicer" means any entity chartered under the Illinois | ||
Banking Act, the
Savings Bank Act, the Illinois Credit Union | ||
Act, or the Illinois Savings and
Loan Act of 1985 and any | ||
person or entity licensed under the Residential
Mortgage | ||
License Act of 1987, the Consumer Installment Loan Act, or the | ||
Sales
Finance Agency Act who
is responsible for the collection | ||
or remittance for, or has the right or
obligation to collect or | ||
remit for, any lender, note owner, or note holder or
for a | ||
licensee's own account, of payments, interest, principal, and | ||
trust items
(such as hazard
insurance and taxes on a | ||
residential mortgage loan) in accordance with the
terms of the | ||
residential mortgage loan, including loan payment follow-up,
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delinquency loan follow-up, loan analysis, and any | ||
notifications to
the borrower that are necessary to enable the | ||
borrower to keep the loan current
and in good
standing.
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"Total loan amount" has the same meaning as that term is | ||
given in 12
CFR 226.32 and shall be calculated in accordance |
with the Federal Reserve
Board's Official Staff Commentary to | ||
that regulation.
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(Source: P.A. 93-561, eff. 1-1-04.) | ||
(Text of Section after P.A. 97-849 takes effect ) | ||
Sec. 10. Definitions. As used in this Act:
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"Approved credit counselor" means a credit counselor | ||
approved by the
Director of Financial Institutions.
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"Bona fide discount points" means loan discount points that | ||
are knowingly paid by the consumer for the purpose of reducing, | ||
and that in fact result in a bona fide reduction of, the
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interest rate or time price differential applicable to the | ||
mortgage. | ||
"Borrower" means a natural person who seeks or obtains a | ||
high risk
home loan.
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"Commissioner" means the Commissioner of the Office of | ||
Banks and Real
Estate.
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"Department" means the Department of Financial | ||
Institutions.
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"Director" means the Director of Financial Institutions.
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"Good faith" means honesty in fact in the conduct or | ||
transaction concerned.
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"High risk home loan"
means a consumer credit transaction, | ||
other than a reverse mortgage, that is secured by the | ||
consumer's principal dwelling if: (i) at the time of | ||
origination, the annual
percentage rate
exceeds by more than 6 |
percentage points in the case of a first lien mortgage,
or
by | ||
more than 8 percentage points in the case of a junior mortgage, | ||
the average prime offer rate, as defined in Section | ||
129C(b)(2)(B) of the federal Truth in Lending Act, for a | ||
comparable transaction as of the date on which the interest | ||
rate for the transaction is set, or if the dwelling is personal | ||
property, then as provided under 15 U.S.C. 1602(bb), as | ||
amended, and any corresponding regulation, as amended, (ii) the | ||
loan documents permit the creditor to charge or collect | ||
prepayment fees or penalties more than 36 months after the | ||
transaction closing or such fees exceed, in the aggregate, more | ||
than 2% of the amount prepaid, or (iii) the total
points
and | ||
fees payable in connection with the transaction, other than | ||
bona fide third-party charges not retained by the mortgage | ||
originator, creditor, or an affiliate of the mortgage | ||
originator or creditor, will exceed (1)
5% of the total loan | ||
amount in the case of a transaction for $20,000 or more or (2) | ||
the lesser of 8% of the total loan amount or $1,000 (or such | ||
other dollar amount as prescribed by federal regulation | ||
pursuant to the federal Dodd-Frank Act) in the case of a | ||
transaction for less than $20,000, except that, with respect to | ||
all transactions, bona fide loan discount points may be | ||
excluded as provided for in Section 35 of this Act.
"High risk | ||
home loan"
does
not include a loan that is made primarily for a | ||
business purpose unrelated to
the
residential real property | ||
securing the loan or a consumer credit transaction made by a |
natural person who provides seller financing secured by a | ||
principal residence no more than 3 times in a 12-month period, | ||
provided such consumer credit transaction is not made by a | ||
person that has constructed or acted as a contractor for the | ||
construction of the residence in the ordinary course of | ||
business of such person.
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"Lender" means a natural or artificial person who | ||
transfers, deals in,
offers, or makes a high risk home loan. | ||
"Lender" includes, but is not limited
to,
creditors and
brokers | ||
who transfer, deal in, offer, or make high risk home loans. | ||
"Lender"
does not include purchasers, assignees, or subsequent | ||
holders of high risk home
loans.
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"Office" means the Office of Banks and Real Estate.
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"Points and fees" means all items considered to be points | ||
and
fees under 12 CFR 226.32 (2000, or as initially amended | ||
pursuant to Section 1431 of the federal Dodd-Frank Act with no | ||
subsequent amendments or editions
included, whichever is | ||
later); compensation paid directly or indirectly by a consumer | ||
or creditor to a
mortgage
broker from any source, including a | ||
broker that originates a loan in its own name in a
table-funded
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transaction, not otherwise included in 12 CFR 226.4; the | ||
maximum prepayment fees and penalties that may be charged or | ||
collected under the terms of the credit transaction; all | ||
prepayment fees or penalties that are incurred by the consumer | ||
if the loan refinances a previous loan made or currently held | ||
by the same creditor or an affiliate of the creditor; and |
premiums or other charges payable at or before closing or | ||
financed directly or indirectly into the loan for any credit | ||
life, credit disability, credit unemployment, credit property, | ||
other accident, loss of income, life, or health insurance or | ||
payments directly or indirectly for any debt cancellation or | ||
suspension agreement or contract, except that insurance | ||
premiums or debt cancellation or suspension fees calculated and | ||
paid in full on a monthly basis shall not be considered | ||
financed by the creditor. "Points and fees" does not include | ||
any insurance premium provided by an agency of the federal | ||
government or an agency of a state; any insurance premium paid | ||
by the consumer after closing; and any amount of a premium, | ||
charge, or fee that is not in excess of the amount payable | ||
under policies in effect at the time of origination under | ||
Section 203(c)(2)(A) of the National Housing Act (12 U.S.C. | ||
1709(c)(2)(A)), provided that the premium, charge, or fee is | ||
required to be refundable on a pro-rated basis and the refund | ||
is automatically issued upon notification of the satisfaction | ||
of the underlying mortgage loan.
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"Reasonable" means fair, proper, just, or prudent under the | ||
circumstances.
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"Servicer" means any entity chartered under the Illinois | ||
Banking Act, the
Savings Bank Act, the Illinois Credit Union | ||
Act, or the Illinois Savings and
Loan Act of 1985 and any | ||
person or entity licensed under the Residential
Mortgage | ||
License Act of 1987, the Consumer Installment Loan Act, or the |
Sales
Finance Agency Act who
is responsible for the collection | ||
or remittance for, or has the right or
obligation to collect or | ||
remit for, any lender, note owner, or note holder or
for a | ||
licensee's own account, of payments, interest, principal, and | ||
trust items
(such as hazard
insurance and taxes on a | ||
residential mortgage loan) in accordance with the
terms of the | ||
residential mortgage loan, including loan payment follow-up,
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delinquency loan follow-up, loan analysis, and any | ||
notifications to
the borrower that are necessary to enable the | ||
borrower to keep the loan current
and in good
standing.
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"Total loan amount" has the same meaning as that term is | ||
given in 12
CFR 226.32 and shall be calculated in accordance | ||
with the Federal Reserve
Board's Official Staff Commentary to | ||
that regulation.
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(Source: P.A. 97-849, see Section 10 of P.A. 97-1159 for | ||
effective date of P.A. 97-849.)
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Section 95. No acceleration or delay. Where this Act makes | ||
changes in a statute that is represented in this Act by text | ||
that is not yet or no longer in effect (for example, a Section | ||
represented by multiple versions), the use of that text does | ||
not accelerate or delay the taking effect of (i) the changes | ||
made by this Act or (ii) provisions derived from any other | ||
Public Act.
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Section 99. Effective date. This Act takes effect upon | ||
becoming law.
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