Bill Amendment: IL HB5231 | 2023-2024 | 103rd General Assembly
NOTE: For additional amemendments please see the Bill Drafting List
Bill Title: SHARED APPRECIATION AGREEMENTS
Status: 2024-04-19 - Rule 19(a) / Re-referred to Rules Committee [HB5231 Detail]
Download: Illinois-2023-HB5231-House_Amendment_001.html
Bill Title: SHARED APPRECIATION AGREEMENTS
Status: 2024-04-19 - Rule 19(a) / Re-referred to Rules Committee [HB5231 Detail]
Download: Illinois-2023-HB5231-House_Amendment_001.html
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1 | AMENDMENT TO HOUSE BILL 5231 | ||||||
2 | AMENDMENT NO. ______. Amend House Bill 5231 on page 20, by | ||||||
3 | replacing line 12 with the following: | ||||||
4 | "is amended by changing Sections 70, 72, and 73 as follows:
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5 | (765 ILCS 77/70) | ||||||
6 | Sec. 70. Predatory lending database program. | ||||||
7 | (a) As used in this Article: | ||||||
8 | "Adjustable rate mortgage" or "ARM" means a closed-end | ||||||
9 | mortgage transaction that allows adjustments of the loan | ||||||
10 | interest rate during the first 3 years of the loan term. | ||||||
11 | "Borrower" means a person seeking a mortgage loan. | ||||||
12 | "Broker" means a "broker" or "loan broker", as defined in | ||||||
13 | subsection (p) of Section 1-4 of the Residential Mortgage | ||||||
14 | License Act of 1987. | ||||||
15 | "Closing agent" means an individual assigned by a title | ||||||
16 | insurance company or a broker or originator to ensure that the | ||||||
17 | execution of documents related to the closing of a real estate |
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1 | sale or the refinancing of a real estate loan and the | ||||||
2 | disbursement of closing funds are in conformity with the | ||||||
3 | instructions of the entity financing the transaction. | ||||||
4 | "Counseling" means in-person counseling provided by a | ||||||
5 | counselor employed by a HUD-approved counseling agency to all | ||||||
6 | borrowers, or documented telephone counseling where a hardship | ||||||
7 | would be imposed on one or more borrowers. A hardship shall | ||||||
8 | exist in instances in which the borrower is confined to his or | ||||||
9 | her home due to medical conditions, as verified in writing by a | ||||||
10 | physician, or the borrower resides 50 miles or more from the | ||||||
11 | nearest participating HUD-approved housing counseling agency. | ||||||
12 | "Counselor" means a counselor employed by a HUD-approved | ||||||
13 | housing counseling agency. | ||||||
14 | "Credit score" means a credit risk score as defined by the | ||||||
15 | Fair Isaac Corporation, or its successor, and reported under | ||||||
16 | such names as "BEACON", "EMPIRICA", and "FAIR ISAAC RISK | ||||||
17 | SCORE" by one or more of the following credit reporting | ||||||
18 | agencies or their successors: Equifax, Inc., Experian | ||||||
19 | Information Solutions, Inc., and TransUnion LLC. If the | ||||||
20 | borrower's credit report contains credit scores from 2 | ||||||
21 | reporting agencies, then the broker or loan originator shall | ||||||
22 | report the lower score. If the borrower's credit report | ||||||
23 | contains credit scores from 3 reporting agencies, then the | ||||||
24 | broker or loan originator shall report the middle score. | ||||||
25 | "Department" means the Department of Financial and | ||||||
26 | Professional Regulation. |
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1 | "Exempt person or entity" means that term as it is defined | ||||||
2 | in subsection subsections (d) (1), (d)(1.5), and (d)(1.8) of | ||||||
3 | Section 1-4 of the Residential Mortgage License Act of 1987. | ||||||
4 | "First-time homebuyer" means a borrower who has not held | ||||||
5 | an ownership interest in residential property. | ||||||
6 | "HUD-approved counseling" or "counseling" means counseling | ||||||
7 | given to a borrower by a counselor employed by a HUD-approved | ||||||
8 | housing counseling agency. | ||||||
9 | "Interest only" means a closed-end loan that permits one | ||||||
10 | or more payments of interest without any reduction of the | ||||||
11 | principal balance of the loan, other than the first payment on | ||||||
12 | the loan. | ||||||
13 | "Lender" means that term as it is defined in subsection | ||||||
14 | (g) of Section 1-4 of the Residential Mortgage License Act of | ||||||
15 | 1987. | ||||||
16 | "Licensee" means that term as it is defined in subsection | ||||||
17 | (e) of Section 1-4 of the Residential Mortgage License Act of | ||||||
18 | 1987. | ||||||
19 | "Mortgage loan" means that term as it is defined in | ||||||
20 | subsection (f) of Section 1-4 of the Residential Mortgage | ||||||
21 | License Act of 1987. | ||||||
22 | "Negative amortization" means an amortization method under | ||||||
23 | which the outstanding balance may increase at any time over | ||||||
24 | the course of the loan because the regular periodic payment | ||||||
25 | does not cover the full amount of interest due. | ||||||
26 | "Originator" means a "mortgage loan originator" as defined |
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1 | in subsection (jj) of Section 1-4 of the Residential Mortgage | ||||||
2 | License Act of 1987, except an exempt person. | ||||||
3 | "Points and fees" has the meaning ascribed to that term in | ||||||
4 | Section 10 of the High Risk Home Loan Act. | ||||||
5 | "Prepayment penalty" means a charge imposed by a lender | ||||||
6 | under a mortgage note or rider when the loan is paid before the | ||||||
7 | expiration of the term of the loan. | ||||||
8 | "Refinancing" means a loan secured by the borrower's or | ||||||
9 | borrowers' primary residence where the proceeds are not used | ||||||
10 | as purchase money for the residence. | ||||||
11 | "Title insurance company" means any domestic company | ||||||
12 | organized under the laws of this State for the purpose of | ||||||
13 | conducting the business of guaranteeing or insuring titles to | ||||||
14 | real estate and any title insurance company organized under | ||||||
15 | the laws of another State, the District of Columbia, or a | ||||||
16 | foreign government and authorized to transact the business of | ||||||
17 | guaranteeing or insuring titles to real estate in this State. | ||||||
18 | (a-5) A predatory lending database program shall be | ||||||
19 | established within Cook County. The program shall be | ||||||
20 | administered in accordance with this Article. The inception | ||||||
21 | date of the program shall be July 1, 2008. A predatory lending | ||||||
22 | database program shall be expanded to include Kane, Peoria, | ||||||
23 | and Will counties. The inception date of the expansion of the | ||||||
24 | program as it applies to Kane, Peoria, and Will counties shall | ||||||
25 | be July 1, 2010. Until the inception date, none of the duties, | ||||||
26 | obligations, contingencies, or consequences of or from the |
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1 | program shall be imposed. The program shall apply to all | ||||||
2 | mortgage applications that are governed by this Article and | ||||||
3 | that are made or taken on or after the inception of the | ||||||
4 | program. | ||||||
5 | (b) The database created under this program shall be | ||||||
6 | maintained and administered by the Department. The database | ||||||
7 | shall be designed to allow brokers, originators, counselors, | ||||||
8 | title insurance companies, and closing agents to submit | ||||||
9 | information to the database online. The database shall not be | ||||||
10 | designed to allow those entities to retrieve information from | ||||||
11 | the database, except as otherwise provided in this Article. | ||||||
12 | Information submitted by the broker or originator to the | ||||||
13 | Department may be used to populate the online form submitted | ||||||
14 | by a counselor, title insurance company, or closing agent. | ||||||
15 | (c) Within 10 business days after taking a mortgage | ||||||
16 | application, the broker or originator for any mortgage on | ||||||
17 | residential property within the program area must submit to | ||||||
18 | the predatory lending database all of the information required | ||||||
19 | under Section 72 and any other information required by the | ||||||
20 | Department by rule. Within 7 business days after receipt of | ||||||
21 | the information, the Department shall compare that information | ||||||
22 | to the housing counseling standards in Section 73 and issue to | ||||||
23 | the borrower and the broker or originator a determination of | ||||||
24 | whether counseling is recommended for the borrower. The | ||||||
25 | borrower may not waive counseling. If at any time after | ||||||
26 | submitting the information required under Section 72 the |
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1 | broker or originator (i) changes the terms of the loan or (ii) | ||||||
2 | issues a new commitment to the borrower, then, within 5 | ||||||
3 | business days thereafter, the broker or originator shall | ||||||
4 | re-submit all of the information required under Section 72 | ||||||
5 | and, within 4 business days after receipt of the information | ||||||
6 | re-submitted by the broker or originator, the Department shall | ||||||
7 | compare that information to the housing counseling standards | ||||||
8 | in Section 73 and shall issue to the borrower and the broker or | ||||||
9 | originator a new determination of whether re-counseling is | ||||||
10 | recommended for the borrower based on the information | ||||||
11 | re-submitted by the broker or originator. The Department shall | ||||||
12 | require re-counseling if the loan terms have been modified to | ||||||
13 | meet another counseling standard in Section 73, or if the | ||||||
14 | broker has increased the interest rate by more than 200 basis | ||||||
15 | points. | ||||||
16 | (d) If the Department recommends counseling for the | ||||||
17 | borrower under subsection (c), then the Department shall | ||||||
18 | notify the borrower of all participating HUD-approved | ||||||
19 | counseling agencies located within the State and direct the | ||||||
20 | borrower to interview with a counselor associated with one of | ||||||
21 | those agencies. Within 10 business days after receipt of the | ||||||
22 | notice of HUD-approved counseling agencies, it is the | ||||||
23 | borrower's responsibility to select one of those agencies and | ||||||
24 | shall engage in an interview with a counselor associated with | ||||||
25 | that agency. The borrower must supply all necessary documents, | ||||||
26 | as set forth by the counselor, at least 72 hours before the |
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1 | scheduled interview. The selection must take place and the | ||||||
2 | appointment for the interview must be set within 10 business | ||||||
3 | days, although the interview may take place beyond the 10 | ||||||
4 | business day period. Within 7 business days after interviewing | ||||||
5 | the borrower, the counselor must submit to the predatory | ||||||
6 | lending database all of the information required under Section | ||||||
7 | 74 and any other information required by the Department by | ||||||
8 | rule. Reasonable and customary costs not to exceed $300 | ||||||
9 | associated with counseling provided under the program shall be | ||||||
10 | paid by the broker or originator and shall not be charged back | ||||||
11 | to, or recovered from, the borrower. The Department shall | ||||||
12 | annually calculate to the nearest dollar an adjusted rate for | ||||||
13 | inflation. A counselor shall not recommend or suggest that a | ||||||
14 | borrower contact any specific mortgage origination company, | ||||||
15 | financial institution, or entity that deals in mortgage | ||||||
16 | finance to obtain a loan, another quote, or for any other | ||||||
17 | reason related to the specific mortgage transaction; however, | ||||||
18 | a counselor may suggest that the borrower seek an opinion or a | ||||||
19 | quote from another mortgage origination company, financial | ||||||
20 | institution, or entity that deals in mortgage finance. A | ||||||
21 | counselor or housing counseling agency that in good faith | ||||||
22 | provides counseling shall not be liable to a broker or | ||||||
23 | originator or borrower for civil damages, except for willful | ||||||
24 | or wanton misconduct on the part of the counselor in providing | ||||||
25 | the counseling. | ||||||
26 | (e) The broker or originator and the borrower may not take |
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1 | any legally binding action concerning the loan transaction | ||||||
2 | until the later of the following: | ||||||
3 | (1) the Department issues a determination not to | ||||||
4 | recommend HUD-approved counseling for the borrower in | ||||||
5 | accordance with subsection (c); or | ||||||
6 | (2) the Department issues a determination that | ||||||
7 | HUD-approved counseling is recommended for the borrower | ||||||
8 | and the counselor submits all required information to the | ||||||
9 | database in accordance with subsection (d). | ||||||
10 | (f) Within 10 business days after closing, the title | ||||||
11 | insurance company or closing agent must submit to the | ||||||
12 | predatory lending database all of the information required | ||||||
13 | under Section 76 and any other information required by the | ||||||
14 | Department by rule. | ||||||
15 | (g) The title insurance company or closing agent shall | ||||||
16 | attach to the mortgage a certificate of compliance with the | ||||||
17 | requirements of this Article, as generated by the database. If | ||||||
18 | the transaction is exempt, the title insurance company or | ||||||
19 | closing agent shall attach to the mortgage a certificate of | ||||||
20 | exemption, as generated by the database. Each certificate of | ||||||
21 | compliance or certificate of exemption must contain, at a | ||||||
22 | minimum, one of the borrower's names on the mortgage loan and | ||||||
23 | the property index number for the subject property. If the | ||||||
24 | title insurance company or closing agent fails to attach the | ||||||
25 | certificate of compliance or exemption, whichever is required, | ||||||
26 | then the mortgage is not recordable. In addition, if any lis |
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1 | pendens for a residential mortgage foreclosure is recorded on | ||||||
2 | the property within the program area, a certificate of service | ||||||
3 | must be simultaneously recorded that affirms that a copy of | ||||||
4 | the lis pendens was filed with the Department. A lis pendens | ||||||
5 | filed after July 1, 2016 shall be filed with the Department | ||||||
6 | electronically. If the certificate of service is not recorded, | ||||||
7 | then the lis pendens pertaining to the residential mortgage | ||||||
8 | foreclosure in question is not recordable and is of no force | ||||||
9 | and effect. | ||||||
10 | (h) All information provided to the predatory lending | ||||||
11 | database under the program is confidential and is not subject | ||||||
12 | to disclosure under the Freedom of Information Act, except as | ||||||
13 | otherwise provided in this Article. Information or documents | ||||||
14 | obtained by employees of the Department in the course of | ||||||
15 | maintaining and administering the predatory lending database | ||||||
16 | are deemed confidential. Employees are prohibited from making | ||||||
17 | disclosure of such confidential information or documents. Any | ||||||
18 | request for production of information from the predatory | ||||||
19 | lending database, whether by subpoena, notice, or any other | ||||||
20 | source, shall be referred to the Department of Financial and | ||||||
21 | Professional Regulation. Any borrower may authorize in writing | ||||||
22 | the release of database information. The Department may use | ||||||
23 | the information in the database without the consent of the | ||||||
24 | borrower: (i) for the purposes of administering and enforcing | ||||||
25 | the program; (ii) to provide relevant information to a | ||||||
26 | counselor providing counseling to a borrower under the |
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1 | program; or (iii) to the appropriate law enforcement agency or | ||||||
2 | the applicable administrative agency if the database | ||||||
3 | information demonstrates criminal, fraudulent, or otherwise | ||||||
4 | illegal activity. | ||||||
5 | (i) Nothing in this Article is intended to prevent a | ||||||
6 | borrower from making his or her own decision as to whether to | ||||||
7 | proceed with a transaction. | ||||||
8 | (j) Any person who violates any provision of this Article | ||||||
9 | commits an unlawful practice within the meaning of the | ||||||
10 | Consumer Fraud and Deceptive Business Practices Act. | ||||||
11 | (j-1) A violation of any provision of this Article by a | ||||||
12 | mortgage banking licensee or licensed mortgage loan originator | ||||||
13 | shall constitute a violation of the Residential Mortgage | ||||||
14 | License Act of 1987. | ||||||
15 | (j-2) A violation of any provision of this Article by a | ||||||
16 | title insurance company, title agent, or escrow agent shall | ||||||
17 | constitute a violation of the Title Insurance Act. | ||||||
18 | (j-3) A violation of any provision of this Article by a | ||||||
19 | housing counselor shall be referred to the Department of | ||||||
20 | Housing and Urban Development. | ||||||
21 | (k) During the existence of the program, the Department | ||||||
22 | shall submit semi-annual reports to the Governor and to the | ||||||
23 | General Assembly by May 1 and November 1 of each year detailing | ||||||
24 | its findings regarding the program. The report shall include, | ||||||
25 | by county, at least the following information for each | ||||||
26 | reporting period: |
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