2005 Illinois Code - 765 ILCS 77/ Residential Real Property Disclosure Act. Article 3 - Predatory Lending Database
(765 ILCS 77/Art. 3 heading)
ARTICLE 3
PREDATORY LENDING DATABASE
(Source: P.A. 94‑280, eff. 1‑1‑06.)
(765 ILCS 77/70)
Sec. 70. Predatory lending database pilot program.
(a) As used in this Article:
"Borrower" means a person seeking a mortgage loan.
"Broker" means a "broker" or "loan broker", as defined in subsection (p) of Section 1‑4 of the Residential Mortgage License Act of 1987.
"Closing agent" means an individual assigned by a title insurance company or a broker or originator to ensure that the execution of documents related to the closing of a real estate sale or the refinancing of a real estate loan and the disbursement of closing funds are in conformity with the instructions of the entity financing the transaction.
"Department" means the Department of Financial and Professional Regulation.
"Exempt person" means that term as it is defined in subsections (d)(1) and (d)(1.5) of Section 1‑4 of the Residential Mortgage License Act of 1987.
"Lender" means that term as it is defined in subsection (g) of Section 1‑4 of the Residential Mortgage License Act.
"Licensee" means that term as it is defined in subsection (e) of Section 1‑4 of the Residential Mortgage License Act of 1987.
"Mortgage loan" means that term as it is defined in subsection (f) of Section 1‑4 of the Residential Mortgage License Act of 1987.
"Originator" means a "loan originator" as defined in subsection (hh) of Section 1‑4 of the Residential Mortgage License Act of 1987, except an exempt person.
"Pilot program area" means all areas within Cook County designated as such by the Department due to the high rate of foreclosure on residential home mortgages that is primarily the result of predatory lending practices. The Department shall designate the pilot program area within 30 days after the effective date of this amendatory Act of the 94th General Assembly.
"Title insurance company" means any domestic company organized under the laws of this State for the purpose of conducting the business of guaranteeing or insuring titles to real estate and any title insurance company organized under the laws of another State, the District of Columbia, or a foreign government and authorized to transact the business of guaranteeing or insuring titles to real estate in this State.
(b) A predatory lending database pilot program is established within the pilot program area. The pilot program shall continue for 4 years after its creation and shall be administered in accordance with Article 3 of this Act. The database created under this program shall be maintained and administered by the Department. The database shall be designed to allow brokers, originators, credit counselors, title insurance companies, and closing agents to submit information to the database online. The database shall not be designed to allow those entities to retrieve information from the database, except as otherwise provided in this Article. Information submitted by the broker or originator to the Department may be used to populate the online form submitted by a credit counselor, title insurance company, or closing agent.
(c) Within 10 days after taking a mortgage application, the broker or originator for any mortgage on residential property within the pilot program area must submit to the predatory lending database all of the information required under Section 72 and any other information required by the Department by rule. Within 7 days after receipt of the information, the Department shall compare that information to credit counseling standards developed by the Department by rule and issue to the borrower and the broker or originator a determination of whether credit counseling is recommended for the borrower. The borrower may not waive credit counseling. If at any time after submitting the information required under Section 72 the broker or originator (i) changes the terms of the loan or (ii) issues a new commitment to the borrower, then, within 5 days thereafter, the broker or originator shall re‑submit all of the information required under Section 72 and, within 4 days after receipt of the information re‑submitted by the broker or originator, the Department shall compare that information to credit counseling standards developed by the Department by rule and shall issue to the borrower and the broker or originator a new determination of whether credit counseling is recommended for the borrower based on the information re‑submitted by the broker or originator.
(d) If the Department recommends credit counseling for the borrower under subsection (c), then the Department shall notify the borrower of all HUD‑certified counseling agencies located within the State and direct the borrower to interview with a counselor associated with one of those agencies. Within 10 days after receipt of the notice of HUD‑certified counseling agencies, the borrower shall select one of those agencies and shall engage in an interview with a counselor associated with that agency. Within 7 days after interviewing the borrower, the credit counselor must submit to the predatory lending database all of the information required under Section 74 and any other information required by the Department by rule. Any costs associated with credit counseling provided under the pilot program shall be paid by the broker or originator.
(e) The broker or originator and the borrower may not take any legally binding action concerning the loan transaction until the later of the following:
(1) the Department issues a determination not to
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recommend credit counseling for the borrower in accordance with subsection (c); or
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(2) the Department issues a determination that credit
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counseling is recommended for the borrower and the credit counselor submits all required information to the database in accordance with subsection (d).
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(f) Within 10 days after closing, the title insurance company or closing agent must submit to the predatory lending database all of the information required under Section 76 and any other information required by the Department by rule.
(g) Upon recording the mortgage, the title insurance company or closing agent must simultaneously file with the recorder a certificate of its compliance with the requirements of this Article, as generated by the database. If the title insurance company or closing agent fails to file the certificate of compliance, then the mortgage is not recordable. In addition, if any lis pendens for a residential mortgage foreclosure is recorded on the property within the pilot program area, a certificate of service must be simultaneously recorded that affirms that a copy of the lis pendens was filed with the Department. If the certificate of service is not recorded, then the lis pendens pertaining to the residential mortgage foreclosure in question is not recordable and is of no force and effect.
(h) All information provided to the predatory lending database under the program is confidential and is not subject to disclosure under the Freedom of Information Act, except as otherwise provided in this Article. Any borrower may authorize in writing the release of database information. The Department may use the information in the database without the consent of the borrower: (i) for the purposes of administering and enforcing the pilot program; (ii) to provide relevant information to a credit counselor providing credit counseling to a borrower under the pilot program; or (iii) to the appropriate law enforcement agency or the applicable administrative agency if the database information demonstrates criminal, fraudulent, or otherwise illegal activity.
(i) Nothing in this Article is intended to prevent a borrower from making his or her own decision as to whether to proceed with a transaction.
(j) Any person who violates any provision of this Article commits an unlawful practice within the meaning of the Consumer Fraud and Deceptive Business Practices Act.
(k) Not later than one year after the Department designates the pilot program area and annually thereafter during the existence of the pilot program, the Department shall report to the Governor and to the General Assembly concerning its administration and the effectiveness of the pilot program.
(Source: P.A. 94‑280, eff. 1‑1‑06.)
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(765 ILCS 77/72)
Sec. 72. Originator; required information. As part of the predatory lending database pilot program, the broker or originator must submit all of the following information for inclusion in the predatory lending database for each loan for which the originator takes an application:
(1) The borrower's name, address, social security
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number or taxpayer identification number, date of birth, and income and expense information contained in the mortgage application.
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(2) The address, permanent index number, and a
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description of the collateral and information about the loan or loans being applied for and the loan terms, including the amount of the loan, the rate and whether the rate is fixed or adjustable, amortization or loan period terms, and any other material terms.
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(3) The borrower's credit score at the time of
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(4) Information about the originator and the company
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the originator works for, including the originator's license number and address, fees being charged, whether the fees are being charged as points up front, the yield spread premium payable outside closing, and other charges made or remuneration required by the broker or originator or its affiliates or the broker's or originator's employer or its affiliates for the mortgage loans.
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(5) Information about affiliated or third party
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service providers, including the names and addresses of appraisers, title insurance companies, closing agents, attorneys, and realtors who are involved with the transaction and the broker or originator and any moneys received from the broker or originator in connection with the transaction.
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(6) All information indicated on the Good Faith
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Estimate and Truth in Lending statement disclosures given to the borrower by the broker or originator.
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(7) Annual real estate taxes for the property,
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together with any assessments payable in connection with the property to be secured by the collateral and the proposed monthly principal and interest charge of all loans to be taken by the borrower and secured by the property of the borrower.
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(8) Information concerning how the broker or
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originator obtained the client and the name of its referral source, if any.
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(9) Information concerning the notices provided by
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the broker or originator to the borrower as required by law and the date those notices were given.
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(10) Information concerning whether a sale and
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leaseback is contemplated and the names of the lessor and lessee, seller, and purchaser.
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(Source: P.A. 94‑280, eff. 1‑1‑06.)
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(765 ILCS 77/74)
Sec. 74. Credit counselor; required information. As part of the predatory lending database pilot program, a credit counselor must submit all of the following information for inclusion in the predatory lending database:
(1) The information called for in Section 72.
(2) Any information from the borrower that confirms
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or contradicts the information called for under item (1) of this Section.
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(3) The name and address of the credit counselor.
(4) Information pertaining to the borrower's monthly
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expenses that assists the credit counselor in determining whether the borrower can afford the loans or loans for which the borrower is applying.
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(5) A list of the disclosures furnished to the
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borrower, as seen and reviewed by the credit counselor, and a comparison of that list to all disclosures required by law.
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(6) Whether the borrower provided tax returns to the
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broker or originator or to the credit counselor, and, if so, who prepared the tax returns.
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(7) The date the loan commitment expires and whether
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a written commitment has been given, together with the proposed date of closing.
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(8) A statement of the recommendations of the credit
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counselor that indicates the counselor's response to each of the following statements:
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(A) The loan should not be approved due to
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(B) The loan should be approved; no material
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(C) The borrower cannot afford the loan.
(D) The borrower does not understand the
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(E) The borrower does not understand the costs
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associated with the transaction.
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(F) The borrower's monthly income and expenses
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have been reviewed and disclosed.
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(G) The rate of the loan is above market rate.
(H) The borrower should seek a competitive bid
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from another broker or originator.
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(I) There are discrepancies between the
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borrower's verbal understanding and the originator's completed form.
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(J) The borrower is precipitously close to not
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being able to afford the loan.
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(K) The borrower understands the true cost of
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debt consolidation and the need for credit card discipline.
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(L) The information that the borrower provided
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the originator has been amended by the originator.
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(Source: P.A. 94‑280, eff. 1‑1‑06.)
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(765 ILCS 77/76)
Sec. 76. Title insurance company or closing agent; required information. As part of the predatory lending database pilot program, a title insurance company or closing agent must submit all of the following information for inclusion in the predatory lending database:
(1) The borrower's name, address, social security
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number or taxpayer identification number, date of birth, and income and expense information contained in the mortgage application.
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(2) The address, permanent index number, and a
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description of the collateral and information about the loan or loans being applied for and the loan terms, including the amount of the loan, the rate and whether the rate is fixed or adjustable, amortization or loan period terms, and any other material terms.
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(3) Annual real estate taxes for the property,
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together with any assessments payable in connection with the property to be secured by the collateral and the proposed monthly principal and interest charge of all loans to be taken by the borrower and secured by the property of the borrower as well as any required escrows and the amounts paid monthly for those escrows.
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(4) All itemizations and descriptions set forth in
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the RESPA settlement statement including items to be disbursed, payable outside closing "POC" items noted on the statement, and a list of payees and the amounts of their checks.
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(5) The name and license number of the title
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insurance company or closing agent together with the name of the agent actually conducting the closing.
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(6) The names and addresses of all originators,
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brokers, appraisers, sales persons, attorneys, and surveyors that are present at the closing.
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(7) The date of closing, a detailed list of all
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notices provided to the borrower at closing and the date of those notices, and all information indicated on the Truth in Lending statement and Good Faith Estimate disclosures.
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(Source: P.A. 94‑280, eff. 1‑1‑06.)
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