|
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
|
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
|
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).
|
"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.
|
"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.
|
"Office" means the Office of Banks and Real Estate.
|
"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
|
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
|
transaction, not otherwise included in 12 CFR 226.4.
|
"Reasonable" means fair, proper, just, or prudent under the |
circumstances.
|
"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,
|
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.
|
"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.
|
(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:
|
"Approved credit counselor" means a credit counselor |
approved by the
Director of Financial Institutions.
|
"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
|
interest rate or time price differential applicable to the |
mortgage. |
"Borrower" means a natural person who seeks or obtains a |
high risk
home loan.
|
"Commissioner" means the Commissioner of the Office of |
Banks and Real
Estate.
|
"Department" means the Department of Financial |
Institutions.
|
"Director" means the Director of Financial Institutions.
|
"Good faith" means honesty in fact in the conduct or |
transaction concerned.
|
"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, (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 such other dollar amount as prescribed by federal |
regulation pursuant to the federal Dodd-Frank Act) 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 (or such other dollar amount |
as prescribed by federal regulation pursuant to the federal |
Dodd-Frank Act), 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.
|
"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.
|
"Office" means the Office of Banks and Real Estate.
|
"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
|
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. |
"Prepayment penalty" and "prepayment fees or penalties" |
mean: (i) for a closed-end credit transaction, a charge imposed |
for paying all or part of the transaction's principal before |
the date on which the principal is due, other than a waived, |
bona fide third-party charge that the creditor imposes if the |
consumer prepays all of the transactions's principal sooner |
than 36 months after consummation and (ii) for an open-end |
|
credit plan, a charge imposed by the creditor if the consumer |
terminates the open-end credit plan prior to the end of its |
term, other than a waived, bona fide third-party charge that |
the creditor imposes if the consumer terminates the open-end |
credit plan sooner than 36 months after account opening.
|
"Reasonable" means fair, proper, just, or prudent under the |
circumstances.
|
"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,
|
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.
|
"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.
|
|
(Source: P.A. 97-849, see Section 10 of P.A. 97-1159 for |
effective date of P.A. 97-849.)
|
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.
|
Section 99. Effective date. This Act takes effect upon |
becoming law.
|