Illinois General Assembly - Full Text of Public Act 099-0331
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Public Act 099-0331


 

Public Act 0331 99TH GENERAL ASSEMBLY

  
  
  

 


 
Public Act 099-0331
 
SB1440 EnrolledLRB099 03529 HAF 23537 b

    AN ACT concerning regulation.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 1. Short title. This Act may be cited as the
Reverse Mortgage Act.
 
    Section 5. General definitions. As used in this Act, unless
the context otherwise requires:
    "Borrower" means a natural person who seeks or obtains a
reverse mortgage.
    "Business day" means any calendar day except Saturday,
Sunday, or a State or federal holiday.
    "Homestead property" means the domicile and contiguous
real estate owned and occupied by the borrower. "Homestead
property" includes a manufactured home as defined in
subdivision (53) of Section 9-102 of the Uniform Commercial
Code that is real property under Section 5-35 of the Conveyance
and Encumbrance of Manufactured Homes as Real Property and
Severance Act.
    "Lender" means a natural or artificial person who
transfers, deals in, offers, or makes a reverse mortgage.
"Lender" includes, but is not limited to, creditors and brokers
who transfer, deal in, offer, or make reverse mortgages.
"Lender" does not include purchasers, assignees, or subsequent
holders of reverse mortgages.
    "Real property" includes a manufactured home as defined in
subdivision (53) of Section 9-102 of the Uniform Commercial
Code that is real property under Section 5-35 of the Conveyance
and Encumbrance of Manufactured Homes as Real Property and
Severance Act.
    "Reverse mortgage" means a non-recourse loan, secured by
real property or a homestead property, that complies with all
of the following:
        (1) Provides cash advances to a borrower for the
    purchase of the home or based on the equity in a borrower's
    owner-occupied principal residence, provided that it is a
    residence with not more than 4 units.
        (2) Requires no payment of principal or interest until
    the entire loan becomes due and payable.
 
    Section 10. Reverse mortgages.
    (a) Reverse mortgage loans shall be subject to all of the
following provisions:
        (1) Payment, in whole or in part, shall be permitted
    without penalty at any time during the term of the
    mortgage.
        (2) A reverse mortgage may provide for an interest rate
    that is fixed or adjustable and may provide for interest
    that is contingent on appreciation in the value of the
    property.
        (3) If a reverse mortgage provides for periodic
    advances to a borrower, the advances may not be reduced in
    amount or number based on any adjustment in the interest
    rate.
        (4) A reverse mortgage may be subject to any additional
    terms and conditions imposed by a lender that are required
    under the provisions of the federal Housing and Community
    Development Act of 1987 to enable the lender to obtain
    federal government insurance on the mortgage if a loan is
    to be insured under that Act.
    (b) The repayment obligation under a reverse mortgage is
subject to all of the following:
        (1) Temporary absences from the home not exceeding 60
    consecutive days shall not cause the mortgage to become due
    and payable.
        (2) Temporary absences from the home exceeding 60 days,
    but not exceeding one year, shall not cause the mortgage to
    become due and payable, provided that the borrower has
    taken action that secures the home in a manner satisfactory
    to the lender.
    (c) A reverse mortgage shall become due and payable upon
the occurrence of any of the following events, unless the
maturity date has been deferred under the Federal Housing
Administration's Home Equity Conversion Mortgage Program:
        (1) The property securing the loan is sold.
        (2) All borrowers cease to occupy the home as a
    principal residence.
        (3) A fixed maturity date agreed to by the lender and
    the borrower is reached.
        (4) Default by the borrower in the performance of its
    obligations under the loan agreement.
        (5) The death of the borrower or, for homestead
    properties in joint tenancy, the death of the last
    surviving joint tenant who had an interest in the property
    at the time the loan was initiated.
 
    Section 15. Reverse mortgage disclosures.
    (a) The Office of the Attorney General shall develop the
content and format of an educational document providing
independent consumer information regarding reverse mortgages,
potential alternatives to reverse mortgages, and the
availability of independent counseling services, including
services provided by nonprofit agencies certified by the
federal government to provide required counseling for reverse
mortgages insured by the U.S. Federal Government. The document
shall also include a statement that the terms of a reverse
mortgage may adversely affect the applicant's eligibility to
obtain a tax deferral under the Senior Citizens Real Estate Tax
Deferral Act. The document shall be updated and revised as
often as deemed necessary by the Office of the Attorney
General.
    (b) Lenders are required to provide each borrower a
document regarding the availability of counseling services
that shall be in at least 12-point font, containing contact
information (including agency name, address, telephone number,
and, if applicable, website) for agencies approved by the U.S.
Department of Housing and Urban Development (HUD) to conduct
reverse mortgage counseling. The agencies included on the list
shall be in accordance with requirements for the Federal
Housing Administration's Home Equity Conversion Mortgage
Program. This document shall contain the following statement:
    "IMPORTANT NOTICE: Under Illinois law, reverse mortgages
are non-recourse loans secured by real or homestead property.
Reverse mortgages insured by the U.S. Federal Government, known
as Home Equity Conversion Mortgages or HECM loans, require
people considering reverse mortgages to get counseling prior to
submitting a completed application for the loan from an agency
approved by the U.S. Department of Housing and Urban
Development (HUD) to conduct reverse mortgage counseling.
    The purpose of the counseling is to help the prospective
borrower understand the financial implications, alternatives
to securing a reverse mortgage, borrower obligations, costs of
obtaining the loan, repayment conditions, and other issues.
Counseling can also be a benefit to people considering reverse
mortgages not insured by the federal government. There are
advantages to receiving this counseling in person, as this
method allows for greater participation by the prospective
borrower, and also allows the counselor to more accurately
determine the prospective borrower's understanding of the
program. However, counseling can also be conducted over the
telephone.
    In accordance with federal requirements, Illinois State
law requires reverse mortgage lenders to provide potential
reverse mortgage borrowers with a list, including contact
information, of agencies that are approved by HUD to conduct
reverse mortgage counseling. Contact information for
additional approved counseling agencies is available from HUD
or your lender.".
    (c) At the time of the initial inquiry regarding a reverse
mortgage or, if not practically feasible, after the borrower
makes a request to apply for a reverse mortgage, a lender shall
provide to the borrower the documents described in subsections
(a) and (b) of this Section.
 
    Section 20. Reverse mortgages cooling-off period.
    (a) Any written commitment provided by the lender to the
borrower must contain the material terms and conditions of the
reverse mortgage. That commitment may be subject to a
satisfactory appraisal and the borrower meeting standard
closing conditions.
    (b) A borrower shall not be bound for 3 full business days
after the borrower's acceptance, in writing, of a lender's
written commitment to make a reverse mortgage loan and may not
be required to close or proceed with the loan during that time
period. A borrower may not waive the provisions of this
subsection (b).
    (c) At the time of making a written commitment, the lender
shall provide the borrower a separate document in at least
12-point font that contains the following statement:
"IMPORTANT NOTICE REGARDING THE COOLING-OFF PERIOD: Illinois
State law requires a 3-day cooling-off period for reverse
mortgage loans, during which time a potential borrower cannot
be required to close or proceed with the loan. The purpose of
this requirement is to provide potential borrowers with 3
business days to consider their decision whether to secure a
reverse mortgage or not. Potential borrowers may want to seek
additional information from a reverse mortgage counselor
during this 3-day period. The 3-day cooling-off period cannot
be waived.".
 
    Section 25. Reverse mortgages; restriction on
cross-selling. No lender may:
        (1) require the purchase of an annuity, investment,
    life insurance, or long-term care insurance product as a
    condition of obtaining a reverse mortgage loan; however,
    nothing in this paragraph shall preclude a lender from
    requiring the borrower to purchase property and casualty
    insurance, title insurance, flood insurance, or other
    products meant to insure or protect the value of the home
    or the lender's lien and that are customary for residential
    mortgage or reverse mortgage transactions on the
    borrower's residence securing the reverse mortgage loan;
        (2) enter into any agreement to make a reverse mortgage
    loan that obligates the borrower to purchase an annuity,
    investment, life insurance, or long-term care insurance
    product;
        (3) offer an annuity to the borrower before the closing
    of the reverse mortgage or before the expiration of the
    right of the borrower to rescind the reverse mortgage
    agreement;
        (4) refer the borrower to anyone for the purchase of an
    annuity before the closing of the reverse mortgage or
    before the expiration of the right of the borrower to
    rescind the reverse mortgage agreement; or
        (5) provide marketing information or annuity sales
    leads to anyone regarding the prospective borrower or
    borrower before the closing of the reverse mortgage or
    before the expiration of the right of the borrower to
    rescind the reverse mortgage loan.
 
    Section 30. Reverse mortgages; restriction on distribution
of loan proceeds. No person, other than a borrower's spouse or
partner, who directly or indirectly facilitates, processes,
negotiates, assists, encourages, arranges, or otherwise
induces consumers to take out a reverse mortgage with a lender
may receive any portion of the loan proceeds for any service or
product, including for services that fall under the Home Repair
and Remodeling Act, other than that for bona fide fees for
origination of the loan. This Section shall not prohibit
disbursements of loan proceeds in compliance with guidelines,
including uses defined as mandatory obligations, under the
Federal Housing Administration's Home Equity Conversion
Mortgage Program, nor shall it prohibit a borrower from using
the loan proceeds to purchase products or services from a
lender that is a financial institution in the ordinary course
of the financial institution's business.
 
    Section 35. Reverse mortgages; certification requirements.
    (a) No reverse mortgage commitment may be made unless all
lenders involved in brokering and making the reverse mortgage
loan certify, in writing, that:
        (1) the borrower has received from the lender the
    educational document prepared by the Office of the Attorney
    General required in subsection (a) of Section 15 and the
    document required in subsection (b) of Section 15 regarding
    the availability of counseling services on reverse
    mortgages;
        (2) the borrower has received from the lender, at the
    time a written commitment was made to the applicant to
    provide a reverse mortgage loan, the disclosure document
    required in Section 20 regarding the 3-day cooling-off
    period and that at least 3 business days have passed since
    the document was provided; the certification shall also
    include the date the cooling-off period disclosure was
    provided;
        (3) the reverse mortgage loan does not include any
    current or future requirement for the applicant to purchase
    an annuity, investment, life insurance, or long-term care
    insurance product; however, nothing in this paragraph (3)
    shall preclude a lender from requiring the borrower to
    purchase property and casualty insurance, title insurance,
    flood insurance, or other such products meant to insure or
    protect the value of the home or the lender's lien and that
    are customary for residential mortgage or reverse mortgage
    transactions;
        (4) no offer of an annuity was made to the borrower
    before the closing of the reverse mortgage or will be
    before the expiration of the right of the borrower to
    rescind the reverse mortgage loan;
        (5) the borrower was not referred to anyone for the
    purchase of an annuity before the closing of the reverse
    mortgage or will be before the expiration of the right of
    the borrower to rescind the reverse mortgage loan;
        (6) the borrower was not provided marketing
    information or annuity sales leads to anyone regarding the
    prospective borrower or borrower before the closing of the
    reverse mortgage or will be before the expiration of the
    right of the borrower to rescind the reverse mortgage loan;
    and
        (7) to their knowledge, no person, other than a
    borrower's spouse or partner, who directly or indirectly
    facilitates, processes, negotiates, assists, encourages,
    arranges, or otherwise induces consumers to take out a
    reverse mortgage with a lender has received or will receive
    any portion of the loan proceeds for any service or
    product, including for services that fall under the Home
    Repair and Remodeling Act, other than that for bona fide
    fees for origination of the loan.
    This Section shall not prohibit disbursements of loan
proceeds in compliance with guidelines under the Federal
Housing Administration's Home Equity Conversion Mortgage
Program, including uses defined as mandatory obligations, nor
shall it prohibit a borrower from using the loan proceeds to
purchase products or services from a lender that is a financial
institution in the ordinary course of the financial
institution's business.
    (b) The lender shall maintain the certification in an
accurate, reproducible, and accessible format for the term of
the reverse mortgage.
 
    Section 40. Enforcement.
    (a) Any violation of this Act shall also be considered an
unlawful practice under the Consumer Fraud and Deceptive
Business Practices Act. Only the Attorney General may enforce
violations of this Act. The Attorney General shall only find a
violation of this Act if the conduct constitutes a pattern or
practice.
    (b) Any violation of this Act by a licensee or residential
mortgage licensee under the Residential Mortgage License Act of
1987 shall also be considered a violation of the Residential
Mortgage License Act of 1987.
 
    Section 900. The Illinois Act on the Aging is amended by
changing Section 4.01 as follows:
 
    (20 ILCS 105/4.01)  (from Ch. 23, par. 6104.01)
    Sec. 4.01. Additional powers and duties of the Department.
In addition to powers and duties otherwise provided by law, the
Department shall have the following powers and duties:
    (1) To evaluate all programs, services, and facilities for
the aged and for minority senior citizens within the State and
determine the extent to which present public or private
programs, services and facilities meet the needs of the aged.
    (2) To coordinate and evaluate all programs, services, and
facilities for the Aging and for minority senior citizens
presently furnished by State agencies and make appropriate
recommendations regarding such services, programs and
facilities to the Governor and/or the General Assembly.
    (2-a) To request, receive, and share information
electronically through the use of data-sharing agreements for
the purpose of (i) establishing and verifying the initial and
continuing eligibility of older adults to participate in
programs administered by the Department; (ii) maximizing
federal financial participation in State assistance
expenditures; and (iii) investigating allegations of fraud or
other abuse of publicly funded benefits. Notwithstanding any
other law to the contrary, but only for the limited purposes
identified in the preceding sentence, this paragraph (2-a)
expressly authorizes the exchanges of income, identification,
and other pertinent eligibility information by and among the
Department and the Social Security Administration, the
Department of Employment Security, the Department of
Healthcare and Family Services, the Department of Human
Services, the Department of Revenue, the Secretary of State,
the U.S. Department of Veterans Affairs, and any other
governmental entity. The confidentiality of information
otherwise shall be maintained as required by law. In addition,
the Department on Aging shall verify employment information at
the request of a community care provider for the purpose of
ensuring program integrity under the Community Care Program.
    (3) To function as the sole State agency to develop a
comprehensive plan to meet the needs of the State's senior
citizens and the State's minority senior citizens.
    (4) To receive and disburse State and federal funds made
available directly to the Department including those funds made
available under the Older Americans Act and the Senior
Community Service Employment Program for providing services
for senior citizens and minority senior citizens or for
purposes related thereto, and shall develop and administer any
State Plan for the Aging required by federal law.
    (5) To solicit, accept, hold, and administer in behalf of
the State any grants or legacies of money, securities, or
property to the State of Illinois for services to senior
citizens and minority senior citizens or purposes related
thereto.
    (6) To provide consultation and assistance to communities,
area agencies on aging, and groups developing local services
for senior citizens and minority senior citizens.
    (7) To promote community education regarding the problems
of senior citizens and minority senior citizens through
institutes, publications, radio, television and the local
press.
    (8) To cooperate with agencies of the federal government in
studies and conferences designed to examine the needs of senior
citizens and minority senior citizens and to prepare programs
and facilities to meet those needs.
    (9) To establish and maintain information and referral
sources throughout the State when not provided by other
agencies.
    (10) To provide the staff support that may reasonably be
required by the Council.
    (11) To make and enforce rules and regulations necessary
and proper to the performance of its duties.
    (12) To establish and fund programs or projects or
experimental facilities that are specially designed as
alternatives to institutional care.
    (13) To develop a training program to train the counselors
presently employed by the Department's aging network to provide
Medicare beneficiaries with counseling and advocacy in
Medicare, private health insurance, and related health care
coverage plans. The Department shall report to the General
Assembly on the implementation of the training program on or
before December 1, 1986.
    (14) To make a grant to an institution of higher learning
to study the feasibility of establishing and implementing an
affirmative action employment plan for the recruitment,
hiring, training and retraining of persons 60 or more years old
for jobs for which their employment would not be precluded by
law.
    (15) To present one award annually in each of the
categories of community service, education, the performance
and graphic arts, and the labor force to outstanding Illinois
senior citizens and minority senior citizens in recognition of
their individual contributions to either community service,
education, the performance and graphic arts, or the labor
force. The awards shall be presented to 4 senior citizens and
minority senior citizens selected from a list of 44 nominees
compiled annually by the Department. Nominations shall be
solicited from senior citizens' service providers, area
agencies on aging, senior citizens' centers, and senior
citizens' organizations. The Department shall establish a
central location within the State to be designated as the
Senior Illinoisans Hall of Fame for the public display of all
the annual awards, or replicas thereof.
    (16) To establish multipurpose senior centers through area
agencies on aging and to fund those new and existing
multipurpose senior centers through area agencies on aging, the
establishment and funding to begin in such areas of the State
as the Department shall designate by rule and as specifically
appropriated funds become available.
    (17) (Blank). To develop the content and format of the
acknowledgment regarding non-recourse reverse mortgage loans
under Section 6.1 of the Illinois Banking Act; to provide
independent consumer information on reverse mortgages and
alternatives; and to refer consumers to independent counseling
services with expertise in reverse mortgages.
    (18) To develop a pamphlet in English and Spanish which may
be used by physicians licensed to practice medicine in all of
its branches pursuant to the Medical Practice Act of 1987,
pharmacists licensed pursuant to the Pharmacy Practice Act, and
Illinois residents 65 years of age or older for the purpose of
assisting physicians, pharmacists, and patients in monitoring
prescriptions provided by various physicians and to aid persons
65 years of age or older in complying with directions for
proper use of pharmaceutical prescriptions. The pamphlet may
provide space for recording information including but not
limited to the following:
        (a) name and telephone number of the patient;
        (b) name and telephone number of the prescribing
    physician;
        (c) date of prescription;
        (d) name of drug prescribed;
        (e) directions for patient compliance; and
        (f) name and telephone number of dispensing pharmacy.
    In developing the pamphlet, the Department shall consult
with the Illinois State Medical Society, the Center for
Minority Health Services, the Illinois Pharmacists Association
and senior citizens organizations. The Department shall
distribute the pamphlets to physicians, pharmacists and
persons 65 years of age or older or various senior citizen
organizations throughout the State.
    (19) To conduct a study of the feasibility of implementing
the Senior Companion Program throughout the State.
    (20) The reimbursement rates paid through the community
care program for chore housekeeping services and home care
aides shall be the same.
    (21) From funds appropriated to the Department from the
Meals on Wheels Fund, a special fund in the State treasury that
is hereby created, and in accordance with State and federal
guidelines and the intrastate funding formula, to make grants
to area agencies on aging, designated by the Department, for
the sole purpose of delivering meals to homebound persons 60
years of age and older.
    (22) To distribute, through its area agencies on aging,
information alerting seniors on safety issues regarding
emergency weather conditions, including extreme heat and cold,
flooding, tornadoes, electrical storms, and other severe storm
weather. The information shall include all necessary
instructions for safety and all emergency telephone numbers of
organizations that will provide additional information and
assistance.
    (23) To develop guidelines for the organization and
implementation of Volunteer Services Credit Programs to be
administered by Area Agencies on Aging or community based
senior service organizations. The Department shall hold public
hearings on the proposed guidelines for public comment,
suggestion, and determination of public interest. The
guidelines shall be based on the findings of other states and
of community organizations in Illinois that are currently
operating volunteer services credit programs or demonstration
volunteer services credit programs. The Department shall offer
guidelines for all aspects of the programs including, but not
limited to, the following:
        (a) types of services to be offered by volunteers;
        (b) types of services to be received upon the
    redemption of service credits;
        (c) issues of liability for the volunteers and the
    administering organizations;
        (d) methods of tracking service credits earned and
    service credits redeemed;
        (e) issues of time limits for redemption of service
    credits;
        (f) methods of recruitment of volunteers;
        (g) utilization of community volunteers, community
    service groups, and other resources for delivering
    services to be received by service credit program clients;
        (h) accountability and assurance that services will be
    available to individuals who have earned service credits;
    and
        (i) volunteer screening and qualifications.
The Department shall submit a written copy of the guidelines to
the General Assembly by July 1, 1998.
    (24) To function as the sole State agency to receive and
disburse State and federal funds for providing adult protective
services in a domestic living situation in accordance with the
Adult Protective Services Act.
    (25) To hold conferences, trainings, and other programs for
which the Department shall determine by rule a reasonable fee
to cover related administrative costs. Rules to implement the
fee authority granted by this paragraph (25) must be adopted in
accordance with all provisions of the Illinois Administrative
Procedure Act and all rules and procedures of the Joint
Committee on Administrative Rules; any purported rule not so
adopted, for whatever reason, is unauthorized.
(Source: P.A. 98-8, eff. 5-3-13; 98-49, eff. 7-1-13; 98-380,
eff. 8-16-13; 98-756, eff. 7-16-14.)
 
    (205 ILCS 5/5a rep.)
    (205 ILCS 5/6.1 rep.)
    (205 ILCS 5/6.2 rep.)
    Section 905. The Illinois Banking Act is amended by
repealing Sections 5a, 6.1, and 6.2.
 
    (205 ILCS 205/1010 rep.)
    Section 910. The Savings Bank Act is amended by repealing
Section 1010.
 
    Section 915. The Illinois Credit Union Act is amended by
changing Section 46 as follows:
 
    (205 ILCS 305/46)  (from Ch. 17, par. 4447)
    Sec. 46. Loans and interest rate.
    (1) A credit union may make loans to its members for such
purpose and upon such security and terms, including rates of
interest, as the credit committee, credit manager, or loan
officer approves. Notwithstanding the provisions of any other
law in connection with extensions of credit, a credit union may
elect to contract for and receive interest and fees and other
charges for extensions of credit subject only to the provisions
of this Act and rules promulgated under this Act, except that
extensions of credit secured by residential real estate shall
be subject to the laws applicable thereto. The rates of
interest to be charged on loans to members shall be set by the
board of directors of each individual credit union in
accordance with Section 30 of this Act and such rates may be
less than, but may not exceed, the maximum rate set forth in
this Section. A borrower may repay his loan prior to maturity,
in whole or in part, without penalty. The credit contract may
provide for the payment by the member and receipt by the credit
union of all costs and disbursements, including reasonable
attorney's fees and collection agency charges, incurred by the
credit union to collect or enforce the debt in the event of a
delinquency by the member, or in the event of a breach of any
obligation of the member under the credit contract. A
contingency or hourly arrangement established under an
agreement entered into by a credit union with an attorney or
collection agency to collect a loan of a member in default
shall be presumed prima facie reasonable.
    (2) Credit unions may make loans based upon the security of
any interest or equity in real estate, subject to rules and
regulations promulgated by the Secretary. In any contract or
loan which is secured by a mortgage, deed of trust, or
conveyance in the nature of a mortgage, on residential real
estate, the interest which is computed, calculated, charged, or
collected pursuant to such contract or loan, or pursuant to any
regulation or rule promulgated pursuant to this Act, may not be
computed, calculated, charged or collected for any period of
time occurring after the date on which the total indebtedness,
with the exception of late payment penalties, is paid in full.
    For purposes of this subsection (2) of this Section 46, a
prepayment shall mean the payment of the total indebtedness,
with the exception of late payment penalties if incurred or
charged, on any date before the date specified in the contract
or loan agreement on which the total indebtedness shall be paid
in full, or before the date on which all payments, if timely
made, shall have been made. In the event of a prepayment of the
indebtedness which is made on a date after the date on which
interest on the indebtedness was last computed, calculated,
charged, or collected but before the next date on which
interest on the indebtedness was to be calculated, computed,
charged, or collected, the lender may calculate, charge and
collect interest on the indebtedness for the period which
elapsed between the date on which the prepayment is made and
the date on which interest on the indebtedness was last
computed, calculated, charged or collected at a rate equal to
1/360 of the annual rate for each day which so elapsed, which
rate shall be applied to the indebtedness outstanding as of the
date of prepayment. The lender shall refund to the borrower any
interest charged or collected which exceeds that which the
lender may charge or collect pursuant to the preceding
sentence. The provisions of this amendatory Act of 1985 shall
apply only to contracts or loans entered into on or after the
effective date of this amendatory Act.
    (3) (Blank). Notwithstanding any other provision of this
Act, a credit union authorized under this Act to make loans
secured by an interest or equity in real estate may engage in
making "reverse mortgage" loans to persons for the purpose of
making home improvements or repairs, paying insurance premiums
or paying real estate taxes on the homestead properties of such
persons. If made, such loans shall be made on such terms and
conditions as the credit union shall determine and as shall be
consistent with the provisions of this Section and such rules
and regulations as the Secretary shall promulgate hereunder.
For purposes of this Section, a "reverse mortgage" loan shall
be a loan extended on the basis of existing equity in homestead
property and secured by a mortgage on such property. Such loans
shall be repaid upon the sale of the property or upon the death
of the owner or, if the property is in joint tenancy, upon the
death of the last surviving joint tenant who had such an
interest in the property at the time the loan was initiated,
provided, however, that the credit union and its member may by
mutual agreement, establish other repayment terms. A credit
union, in making a "reverse mortgage" loan, may add deferred
interest to principal or otherwise provide for the charging of
interest or premiums on such deferred interest. "Homestead"
property, for purposes of this Section, means the domicile and
contiguous real estate owned and occupied by the mortgagor.
    (4) Notwithstanding any other provisions of this Act, a
credit union authorized under this Act to make loans secured by
an interest or equity in real property may engage in making
revolving credit loans secured by mortgages or deeds of trust
on such real property or by security assignments of beneficial
interests in land trusts.
    For purposes of this Section, "revolving credit" has the
meaning defined in Section 4.1 of the Interest Act.
    Any mortgage or deed of trust given to secure a revolving
credit loan may, and when so expressed therein shall, secure
not only the existing indebtedness but also such future
advances, whether such advances are obligatory or to be made at
the option of the lender, or otherwise, as are made within
twenty years from the date thereof, to the same extent as if
such future advances were made on the date of the execution of
such mortgage or deed of trust, although there may be no
advance made at the time of execution of such mortgage or other
instrument, and although there may be no indebtedness
outstanding at the time any advance is made. The lien of such
mortgage or deed of trust, as to third persons without actual
notice thereof, shall be valid as to all such indebtedness and
future advances form the time said mortgage or deed of trust is
filed for record in the office of the recorder of deeds or the
registrar of titles of the county where the real property
described therein is located. The total amount of indebtedness
that may be so secured may increase or decrease from time to
time, but the total unpaid balance so secured at any one time
shall not exceed a maximum principal amount which must be
specified in such mortgage or deed of trust, plus interest
thereon, and any disbursements made for the payment of taxes,
special assessments, or insurance on said real property, with
interest on such disbursements.
    Any such mortgage or deed of trust shall be valid and have
priority over all subsequent liens and encumbrances, including
statutory liens, except taxes and assessments levied on said
real property.
    (4-5) For purposes of this Section, "real estate" and "real
property" include a manufactured home as defined in subdivision
(53) of Section 9-102 of the Uniform Commercial Code which is
real property as defined in Section 5-35 of the Conveyance and
Encumbrance of Manufactured Homes as Real Property and
Severance Act.
    (5) Compliance with federal or Illinois preemptive laws or
regulations governing loans made by a credit union chartered
under this Act shall constitute compliance with this Act.
    (6) Credit unions may make residential real estate mortgage
loans on terms and conditions established by the United States
Department of Agriculture through its Rural Development
Housing and Community Facilities Program. The portion of any
loan in excess of the appraised value of the real estate shall
be allocable only to the guarantee fee required under the
program.
    (7) For a renewal, refinancing, or restructuring of an
existing loan that is secured by an interest or equity in real
estate, a new appraisal of the collateral shall not be required
when the transaction involves an existing extension of credit
at the credit union, no new moneys are advanced other than
funds necessary to cover reasonable closing costs, and there
has been no obvious or material change in market conditions or
physical aspects of the real estate that threatens the adequacy
of the credit union's real estate collateral protection after
the transaction.
(Source: P.A. 97-133, eff. 1-1-12; 98-749, eff. 7-16-14;
98-784, eff. 7-24-14; revised 10-2-14.)
 
    (205 ILCS 305/46.1 rep.)
    (205 ILCS 305/46.2 rep.)
    Section 920. The Illinois Credit Union Act is amended by
repealing Sections 46.1 and 46.2.
 
    Section 925. The Residential Mortgage License Act of 1987
is amended by adding Section 5-5A as follows:
 
    (205 ILCS 635/5-5A new)
    Sec. 5-5A. Violations of the Reverse Mortgage Act. Any
violation of the Reverse Mortgage Act by a residential mortgage
licensee shall be considered a violation of this Act.
 
    (205 ILCS 635/5-5 rep.)
    Section 930. The Residential Mortgage License Act of 1987
is amended by repealing Section 5-5.
 
    Section 935. The Consumer Fraud and Deceptive Business
Practices Act is amended by changing Section 2Z as follows:
 
    (815 ILCS 505/2Z)  (from Ch. 121 1/2, par. 262Z)
    Sec. 2Z. Violations of other Acts. Any person who knowingly
violates the Automotive Repair Act, the Automotive Collision
Repair Act, the Home Repair and Remodeling Act, the Dance
Studio Act, the Physical Fitness Services Act, the Hearing
Instrument Consumer Protection Act, the Illinois Union Label
Act, the Job Referral and Job Listing Services Consumer
Protection Act, the Travel Promotion Consumer Protection Act,
the Credit Services Organizations Act, the Automatic Telephone
Dialers Act, the Pay-Per-Call Services Consumer Protection
Act, the Telephone Solicitations Act, the Illinois Funeral or
Burial Funds Act, the Cemetery Oversight Act, the Cemetery Care
Act, the Safe and Hygienic Bed Act, the Pre-Need Cemetery Sales
Act, the High Risk Home Loan Act, the Payday Loan Reform Act,
the Mortgage Rescue Fraud Act, subsection (a) or (b) of Section
3-10 of the Cigarette Tax Act, subsection (a) or (b) of Section
3-10 of the Cigarette Use Tax Act, the Electronic Mail Act, the
Internet Caller Identification Act, paragraph (6) of
subsection (k) of Section 6-305 of the Illinois Vehicle Code,
Section 11-1431, 18d-115, 18d-120, 18d-125, 18d-135, 18d-150,
or 18d-153 of the Illinois Vehicle Code, Article 3 of the
Residential Real Property Disclosure Act, the Automatic
Contract Renewal Act, the Reverse Mortgage Act, or the Personal
Information Protection Act commits an unlawful practice within
the meaning of this Act.
(Source: P.A. 96-863, eff. 1-19-10; 96-1369, eff. 1-1-11;
96-1376, eff. 7-29-10; 97-333, eff. 8-12-11.)

Effective Date: 1/1/2016