SB 2908 — FIN REG-RESIDENTIAL MORTGAGE

(l) "Party to a residential mortgage financing transaction" shall mean a borrower, lender, or loan broker in a residential mortgage financing transaction.

(m) "Payments" shall mean payment of all or any of the following:

principal, interest and escrow reserves for taxes, insurance and other related reserves, and reimbursement for SB2908 Enrolled - 7 - LRB093 18470 SAS 44184 b lender advances.

(n) "Commissioner" shall mean the Commissioner of Banks and Real Estate or a person authorized by the Commissioner, the Office of Banks and Real Estate Act, or this Act to act in the Commissioner’s stead.

(o) "Loan brokering", "brokering", or "brokerage service" shall mean the act of helping to obtain from another entity, for a borrower, a loan secured by residential real estate situated in Illinois or assisting a borrower in obtaining a loan secured by residential real estate situated in Illinois in return for consideration to be paid by either the borrower or the lender including, but not limited to, contracting for the delivery of residential mortgage loans to a third party lender and soliciting, processing, placing, or negotiating residential mortgage loans.

(p) "Loan broker" or "broker" shall mean a person, partnership, association, corporation, or limited liability company, other than those persons, partnerships, associations, corporations, or limited liability companies exempted from licensing pursuant to Section 1-4, subsection (d), of this Act, who performs the activities described in subsections (c) and (o) of this Section.

(q) "Servicing" shall mean the collection or remittance for or the right or obligation to collect or remit for any lender, noteowner, noteholder, or for a licensee’s own account, of payments, interests, 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;

and includes 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.

(r) "Full service office" shall mean office and staff in Illinois reasonably adequate to handle efficiently communications, questions, and other matters relating to any application for, or an existing home mortgage secured by SB2908 Enrolled - 8 - LRB093 18470 SAS 44184 b residential real estate situated in Illinois with respect to which the licensee is brokering, funding originating, purchasing, or servicing.

The management and operation of each full service office must include observance of good business practices such as adequate, organized, and accurate books and records;

ample phone lines, hours of business, staff training and supervision, and provision for a mechanism to resolve consumer inquiries, complaints, and problems.

The Commissioner shall issue regulations with regard to these requirements and shall include an evaluation of compliance with this Section in his or her periodic examination of each licensee.

(s) "Purchasing" shall mean the purchase of conventional or government-insured mortgage loans secured by residential real estate situated in Illinois from either the lender or from the secondary market.

(t) "Borrower" shall mean the person or persons who seek the services of a loan broker, originator, or lender.

(u) "Originating" shall mean the issuing of commitments for and funding of residential mortgage loans.

(v) "Loan brokerage agreement" shall mean a written agreement in which a broker or loan broker agrees to do either of the following:

(1) obtain a residential mortgage loan for the borrower or assist the borrower in obtaining a residential mortgage loan;

or (2) consider making a residential mortgage loan to the borrower.

(w) "Advertisement" shall mean the attempt by publication, dissemination, or circulation to induce, directly or indirectly, any person to enter into a residential mortgage loan agreement or residential mortgage loan brokerage agreement relative to a mortgage secured by residential real estate situated in Illinois.

(x) "Residential Mortgage Board" shall mean the Residential Mortgage Board created in Section 1-5 of this Act.

(y) "Government-insured mortgage loan" shall mean any SB2908 Enrolled - 9 - LRB093 18470 SAS 44184 b mortgage loan made on the security of residential real estate insured by the Department of Housing and Urban Development or Farmers Home Loan Administration, or guaranteed by the Veterans Administration.

(z) "Annual audit" shall mean a certified audit of the licensee’s books and records and systems of internal control performed by a certified public accountant in accordance with generally accepted accounting principles and generally accepted auditing standards.

(aa) "Financial institution" shall mean a savings and loan association, savings bank, credit union, or a bank organized under the laws of Illinois or a savings and loan association, savings bank, credit union or a bank organized under the laws of the United States and headquartered in Illinois.

(bb) "Escrow agent" shall mean a third party, individual or entity charged with the fiduciary obligation for holding escrow funds on a residential mortgage loan pending final payout of those funds in accordance with the terms of the residential mortgage loan.

(cc) "Net worth" shall have the meaning ascribed thereto in Section 3-5 of this Act.

(dd) "Affiliate" shall mean:

(1) any entity that directly controls or is controlled by the licensee and any other company that is directly affecting activities regulated by this Act that is controlled by the company that controls the licensee;

(2) any entity:

(A) that is controlled, directly or indirectly, by a trust or otherwise, by or for the benefit of shareholders who beneficially or otherwise control, directly or indirectly, by trust or otherwise, the licensee or any company that controls the licensee;

or (B) a majority of the directors or trustees of which constitute a majority of the persons holding any such office with the licensee or any company that controls the licensee;

SB2908 Enrolled - 10 - LRB093 18470 SAS 44184 b (3) any company, including a real estate investment trust, that is sponsored and advised on a contractual basis by the licensee or any subsidiary or affiliate of the licensee.

The Commissioner may define by rule and regulation any terms used in this Act for the efficient and clear administration of this Act.

(ee) "First tier subsidiary" shall be defined by regulation incorporating the comparable definitions used by the Office of the Comptroller of the Currency and the Illinois Commissioner of Banks and Real Estate.

(ff) "Gross delinquency rate" means the quotient determined by dividing (1) the sum of (i) the number of government-insured residential mortgage loans funded or purchased by a licensee in the preceding calendar year that are delinquent and (ii) the number of conventional residential mortgage loans funded or purchased by the licensee in the preceding calendar year that are delinquent by (2) the sum of (i) the number of government-insured residential mortgage loans funded or purchased by the licensee in the preceding calendar year and (ii) the number of conventional residential mortgage loans funded or purchased by the licensee in the preceding calendar year.

(gg) "Delinquency rate factor" means the factor set by rule of the Commissioner that is multiplied by the average gross delinquency rate of licensees, determined annually for the immediately preceding calendar year, for the purpose of determining which licensees shall be examined by the Commissioner pursuant to subsection (b) of Section 4-8 of this Act.

(hh) "Loan originator" means any natural person who, for compensation or in the expectation of compensation, either directly or indirectly makes, offers to make, solicits, places, or negotiates a residential mortgage loan.

(ii) "Confidential supervisory information" means any report of examination, visitation, or investigation prepared SB2908 Enrolled - 11 - LRB093 18470 SAS 44184 b by the Commissioner under this Act, any report of examination visitation, or investigation prepared by the state regulatory authority of another state that examines a licensee, any document or record prepared or obtained in connection with or relating to any examination, visitation, or investigation, and any record prepared or obtained by the Commissioner to the extent that the record summarizes or contains information derived from any report, document, or record described in this subsection.

"Confidential supervisory information" does not include any information or record routinely prepared by a licensee and maintained in the ordinary course of business or any information or record that is required to be made publicly available pursuant to State or federal law or rule.

93-561, eff.

1-1-04.) (205 ILCS 635/1-5) (from Ch.

17, par.

2321-5) Sec.

1-5.

Residential Mortgage Board.

(a) Board composition, compensation.

There is created the Residential Mortgage Board composed of 5 members appointed by the Commissioner of Banks and Real Estate.

The majority of persons on the Board shall have no financial interest in any residential mortgage business and one member shall be a representative of the Mortgage Banking Trade Association and one member shall be a representative of the Mortgage Broker Trade Association.

Members of the Board serving on the effective date of this amendatory Act of 1996 shall continue to serve their unexpired terms as members of the Residential Mortgage Board.

Thereafter, on or before January 15 of each year, the Commissioner shall appoint one or more board members, as shall be necessary to maintain a 5 member Board, whose terms shall be for 3 years commencing February 1 of the year in which they are respectively appointed.

If a vacancy occurs on the Residential Mortgage Board, the Commissioner shall within 60 days appoint a new member who shall hold office for the remainder of the vacated term.

The Board shall meet at the call of the chairman, who along SB2908 Enrolled - 12 - LRB093 18470 SAS 44184 b with a Secretary, shall be selected by the Board from among its members.

Members of the Board shall be entitled to receive a per diem allowance of $25 for each day or part of a day spent on Board work and shall be entitled to their expenses actually and necessarily incurred in the performance of their duties.

The members of the Board serve at the pleasure of the Commissioner.

(b) Duties of Board.

The Residential Mortgage Board shall assist the Commissioner by:

(1) submitting recommendations to the Commissioner for the efficient administration of this Act;

and (2) performing other duties as are prescribed by the Commissioner.

(c) Conflict of interest declarations.

Each member of the Residential Mortgage Board shall file annually, no later than February 1, with the Commissioner a statement of his or her current business transactions or other affiliations with any licensee under this Act.

The Commissioner may adopt rules to avoid conflicts of interest on the part of members of the Residential Mortgage Board in connection with their position on the Board.

(Source:

P.A.

8-17-95.)8-17-95; (205 ILCS 635/2-4) (from Ch.

89-508, eff.

7-3-96.) (205 ILCS 635/2-2) (from Ch.

2322-4)2322-2) Sec.

2-4.2-2.

AvermentsApplication ofprocess; Licensee.

Eachinvestigation; application for license or for the renewal of a license shall be accompanied by the following averments stating that the applicant:

(a)fee. Will maintain at least one full service office within the State of Illinois pursuant to Section 3-4 of this Act;

(b)(a) WillThe maintainCommissioner staffshall reasonablyissue adequatea tolicense meetupon thecompletion requirements of Sectionall 3-4 of thisthe Act;following:

(c)(1) WillThe keepfiling and maintain for 36 months the same written records as required by the federal Equal Credit Opportunity Act, and any other information required by regulations of thean Commissionerapplication regardingfor anylicense. home SB2908 Engrossed - 5 - LRB093 18470 SAS 44184 b mortgage in the course of the conduct of its residential mortgage business;

(d)(2) WillThe filefiling with the Commissioner,Commissioner whenof due,a anylisting reportof orjudgments reportsentered whichagainst, itand isbankruptcy requiredpetitions toby, filethe underlicense anyapplicant offor the provisionspreceding of10 thisyears. Act;

(e)(3) WillThe notpayment, engage, whether as principal or agent, in thecertified practicefunds, of rejectinginvestigation residentialand mortgageapplication applicationsfees, withoutthe reasonabletotal cause,of orwhich varyingshall termsbe orin applicationan proceduresamount withoutequal reasonableto cause,$2,700 forannually, homehowever, mortgagesthe onCommissioner realmay estateincrease within any specific geographic area from the termsinvestigation orand proceduresapplication generallyfees provided by therule licenseeas withinprovided otherin geographicSection areas4-11. of the State;

(f)SB2908 WillEnrolled not- engage13 - LRB093 18470 SAS 44184 b (4) Except for a broker applying to renew a license, the filing of an audited balance sheet including all footnotes prepared by a certified public accountant in fraudulentaccordance homewith mortgagegenerally underwritingaccepted practices;accounting principles and generally accepted auditing principles which evidences that the applicant meets the net worth requirements of Section 3-5.

(g)(5) WillThe notfiling makeof payment,proof whethersatisfactory directlyto orthe indirectly,Commissioner ofthat anythe kindapplicant, tothe anymembers inthereof houseif orthe feeapplicant appraiseris ofa anypartnership government or privateassociation, moneythe lendingmembers agencyor withmanagers whichthereof anthat applicationretain forany aauthority homeor mortgageresponsibility hasunder beenthe filedoperating foragreement if the purposeapplicant ofis influencinga thelimited independentliability judgmentcompany, ofor the appraiserofficers withthereof respectif to the valueapplicant ofis anya realcorporation estatehave which3 isyears toexperience bepreceding coveredapplication byin suchreal homeestate mortgage;finance.

(h)Instead Hasof filedthis taxrequirement, returnsthe (Stateapplicant and Federal)the forapplicant’s theofficers pastor 3members, yearsas orapplicable, filedmay withsatisfactorily thecomplete Commissionera anprogram accountant’sof oreducation attorney’sin statementreal estate finance and fair lending, as toapproved whyby nothe returnCommissioner, wasprior filed;to receiving the initial license.

(i)The WillCommissioner notshall engagepromulgate inrules anyregarding discriminationproof orof redliningexperience activitiesrequirements prohibitedand byeducational Sectionrequirements 3-8and the satisfactory completion of thisthose Act;requirements.

(j)The WillCommissioner notmay knowinglyestablish makeby anyrule false promises likely to influence or persuade, or pursue a courselist of misrepresentationduly licensed professionals and falseothers promiseswho throughmay agents,be solicitors,exempt advertisingfrom orthis otherwise;requirement.

(k)(6) WillAn notinvestigation knowinglyof misrepresent,the circumventaverments orrequired conceal,by throughSection whatever2-4, subterfugewhich orinvestigation device,must anyallow the Commissioner to issue positive findings stating that the financial responsibility, experience, character, and general fitness of the materiallicense particularsapplicant and of the members thereof if the license applicant is a partnership or association, of the natureofficers thereof,and regardingdirectors thereof if the license applicant is a transactioncorporation, toand whichof itthe managers and members that retain any authority or responsibility under the operating agreement if the license applicant is a partySB2908 Enrolled - 14 - LRB093 18470 SAS 44184 b limited liability company are such as to command the injuryconfidence of anotherthe partycommunity thereto;and to warrant belief that the business will be operated honestly, fairly and efficiently within the purpose of this Act.

(l)If Willthe disburseCommissioner fundsshall innot accordanceso withfind, itshe SB2908or Engrossedshe -shall 6not -issue LRB093such 18470license, SASand 44184he bor agreements;she shall notify the license applicant of the denial.

(m)The HasCommissioner notmay committedimpose aconditions crimeon againsta thelicense lawif of this State, any other state or of the UnitedCommissioner States,determines involving moral turpitude, fraudulent or dishonest dealing, and that nothe finalconditions judgmentare hasnecessary been entered against it in a civil action upon grounds of fraud, misrepresentation or deceitappropriate. which has not been previously reported to the Commissioner;

(n)These Willconditions accountshall orbe deliverimposed toin anywriting person any personal property such as money, fund, deposit, check, draft, mortgage, other document or thing of value, which has come into its possession, and whichshall iscontinue not its property, or which it is not in laweffect orfor equity entitled to retain under the circumstances,period atprescribed the time which has been agreed upon or is required by law, or, in the absenceCommissioner. of a fixed time, upon demand of the person entitled to such accounting and delivery;

(o)(b) HasAll notlicenses engagedshall be issued in anyduplicate conductwith whichone wouldcopy bebeing causetransmitted forto denialthe oflicense aapplicant license;and the second being retained with the Commissioner.

(p)Upon Hasreceipt notof becomesuch insolvent;license, a residential mortgage licensee shall be authorized to engage in the business regulated by this Act.

(q)Such Haslicense notshall submittedremain anin applicationfull forforce aand licenseeffect underuntil thisit Actexpires whichwithout containsrenewal, ais materialsurrendered misstatement;by the licensee or revoked or suspended as hereinafter provided.

(r) Has not demonstrated by course of conduct, negligence or incompetence in performing any act for which it is required to hold a license under this Act;

(s) Will advise the Commissioner in writing of any changes to the information submitted on the most recent application for license within 30 days of said change.

The written notice must be signed in the same form as the application for license being amended;

(t) Will comply with the provisions of this Act, or with any lawful order, rule or regulation made or issued under the provisions of this Act;

(u) Will submit to periodic examination by the Commissioner as required by this Act;

(v) Will advise the Commissioner in writing of judgments entered against, and bankruptcy petitions by, SB2908 Engrossed - 7 - LRB093 18470 SAS 44184 b the license applicant within 5 days of occurrence;

(w) Will advise the Commissioner in writing within 30 days when the license applicant requests a licensee under this Act to repurchase a loan, and the circumstances therefor;

and (x) Will advise the Commissioner in writing within 30 days when the license applicant is requested by another entity to repurchase a loan, and the circumstances therefor;

(y) Will at all times act in a manner consistent with subsections (a) and (b) of Section 1-2 of this Act;

(z) (x) Will not knowingly hire or employ a loan originator who is not registered with the Commissioner as required under Section 7-1 of this Act;

and (z-1) Will not knowingly employ or otherwise permit, except with prior written consent of the Commissioner, an individual to serve as an officer, director, or employee for the licensee if the individual has been convicted of a felony or any criminal offense relating to dishonesty or breach of trust.

A licensee who fails to fulfill obligations of an averment, to comply with averments made, or otherwise violates any of the averments made under this Section shall be subject to the penalties in Section 4-5 of this Act.

93-561,93-32, eff.

1-1-04;7-1-03.) (205 ILCS 635/2-6) (from Ch.

revised 10-9-03.) (205 ILCS 635/2-6) (from Ch.

failure of the licensee to receive renewal forms absent a request sent by certified mail SB2908 Engrossed - 8 - LRB093 18470 SAS 44184 b for such forms will not waive said responsibility.

SB2908 Enrolled - 15 - LRB093 18470 SAS 44184 b (1) A fee of $750 will be assessed to the licensee 30 days after the proper renewal date and $1,500 each month thereafter, until the license is either renewed or expires pursuant to Section 2-6, subsections (c) and (d), of this Act.

The Commissioner may approveallow thea licensee conductingwith an inactive license to conduct activities regulated by this Act with an inactive license for the sole purpose of assisting borrowers in the closing or funding of loans for which the licenseeloan hadapplication anwas activetaken licensefrom ata theborrower timewhile the loanlicense application was takenactive. from a borrower.

(e) A licensee ceasing an activity or activities regulated by this Act and desiring to no longer be licensed shall so inform the Commissioner in writing and, at the same time, convey the license and all other symbols or indicia of SB2908 Engrossed - 9 - LRB093 18470 SAS 44184 b licensure.

SB2908 Enrolled - 16 - LRB093 18470 SAS 44184 b (Source:

revised 9-23-03.) (205 ILCS 635/3-1)635/3-2) (from Ch.

2323-1) Sec.

3-1.

Bonds of licensees.

(a) Every licensee, with respect to any person appointed or elected to any position requiring the receipt of payment, management, or use of money belonging to a residential mortgage licensee engaged in the activities of originating, servicing, or purchasing mortgage loans or whose duties permit him or her to have access to or custody of any of its money or securities or custody of any money or securities belonging to third parties or whose duties permit him or her regularly to make entries in the books or other records of a licensee, shall, before assuming his or her duties, maintain a fidelity bond in the amount of $100,000 by some fidelity insurance company licensed to do business in this State.

(b) Each bond shall be for any loss the licensee may sustain in money or other property through the commission of any dishonest or criminal act or omission by any person required to be bonded, whether committed alone or in concert with another.

The bond shall be in the form and amount approved by the Commissioner who may at any time require one or more additional bonds.

A true copy of every bond, including all riders and endorsements executed subsequent to the effective date of the bond, shall be filed at all times with the Commissioner.

Each bond shall provide that a cancellation thereof shall not become effective unless and until 30 days notice in writing first shall have been given to the Commissioner unless he or she shall have approved the cancellation earlier.

If the Commissioner believes the SB2908 Engrossed - 10 - LRB093 18470 SAS 44184 b licensee’s business is being conducted in an unsafe manner due to the lack of bonds or the inadequacy of bonds, he or she may proceed against the licensee as provided for in Section 4-5.

(c) All licensees shall maintain a bond in accordance with this subsection.

Each bond shall be for the recovery of expenses, fines, or fees due to or levied by the Commissioner in accordance with this Act.

The bond shall be payable when the licensee fails to comply with any provisions of this Act and shall be in the form of a surety or licensure bond in the amount and form as prescribed by the Commissioner pursuant to rules and regulations.

The bond shall be payable to the Office of Banks and Real Estate and shall be issued by some insurance company authorized to do business in this State.

A copy of the bond, including any and all riders and endorsements executed subsequent to the effective date of the bond, shall be placed on file with the Office of Banks and Real Estate within 10 days of the execution thereof.

(d) The Commissioner may promulgate rules with respect to bonding requirements for residential mortgage licensees that are reasonable and necessary to accomplish the purposes of this Act.

(e) The Commissioner may require licensees to maintain a bond for errors and omissions in performing activities regulated by this Act.

(Source:

P.A.

89-508, eff.

7-3-96.) (205 ILCS 635/3-2) (from Ch.

17, par.

The audit must be sufficiently comprehensive SB2908 Engrossed - 11 - LRB093 18470 SAS 44184 b in scope to permit the expression of an opinion on the financial statements, which must be prepared in accordance with generally accepted accounting principles, and must be performed in accordance with generally accepted auditing standards.

The report filed with the Commissioner shall be certified by the certified public accountant conducting the SB2908 Enrolled - 17 - LRB093 18470 SAS 44184 b audit.

Department of Housing and Urban SB2908 Engrossed - 12 - LRB093 18470 SAS 44184 b Development.

(g) With respect to licensees who solely broker residential mortgage loans after the effective date of this amendatory Act of the 93rd General Assembly, as defined in subsection (o) of Section 1-4, instead of the audit required by this Section, the Commissioner may accept for a period no later than 2 years after the effective date of this amendatory Act of the 93rd General Assembly compilation financial statements prepared at least every 12 months, and the compilation financial statement must be prepared by an independent certified public accountant licensed under the Illinois Public Accounting Act or by an equivalent state licensing law with full disclosure in accordance with generally accepted accounting principals and must be submitted within 90 days after the end of the licensee’s fiscal year.

(h) The workpapers of the certified public accountants employed by each licensee for purposes of this Section are to be made available to the Commissioner or the Commissioner’s SB2908 Enrolled - 18 - LRB093 18470 SAS 44184 b designee upon request and may be reproduced by the Commissioner or the Commissioner’s designee to enable to the Commissioner to carry out the purposes of this Act.

(i) Notwithstanding any other provision of this Section, if a licensee relying on subsection (g) of this Section causes its books to be audited at any other time or causes its financial statements to be reviewed, a complete copy of the audited or reviewed financial statements shall be delivered to the Commissioner at the time of the annual license renewal payment following receipt by the licensee of the audited or reviewed SB2908 Engrossed - 13 - LRB093 18470 SAS 44184 b financial statements.

(b) In lieu of maintaining a full service office in the State of Illinois, a licensee whose principal place of business is located outside the State of Illinois must submit a certified audit as required in Section 3-2 of this Act evidencing a minimum net worth of $100,000, which must be maintained at all times, and shall submit and maintain a SB2908 Enrolled - 19 - LRB093 18470 SAS 44184 b fidelity bond in the amount of $100,000.

1-1-99.) (205 ILCS 635/3-5)635/4-1) (from Ch.

2323-5) Sec.

3-5.

Net worth requirement.

A licensee that holds a license on the effective date of this amendatory Act of the 93rd General Assembly shall have and maintain a net worth of not less than $100,000;

however, no later than 2 years after the effective date of this amendatory Act of the 93rd General SB2908 Engrossed - 14 - LRB093 18470 SAS 44184 b Assembly, the licensee must maintain a net worth of not less than $150,000.

A licensee that first obtains a license after the effective date of this amendatory Act of the 93rd General Assembly must have and maintain a net worth of not less than $150,000.

Notwithstanding other requirements of this Section, the net worth requirement for a residential mortgage licensee whose only licensable activity is that of brokering residential mortgage loans and that holds a license on the effective date of this amendatory Act of the 93rd General Assembly shall be $35,000;

however, no later than 2 years after the effective date of this amendatory Act of the 93rd General Assembly, the licensee must maintain a net worth of not less than $50,000.

Such a licensee that first obtains a license after the effective date of this amendatory Act of the 93rd General Assembly must have and maintain a net worth of not less than $50,000.

Net worth shall be evidenced by a balance sheet prepared by a certified public accountant in accordance with generally accepted accounting principles and generally accepted auditing standards or by the compilation financial statements authorized under subsection (g) of Section 3-2.

The Commissioner may promulgate rules with respect to net worth definitions and requirements for residential mortgage licensees as necessary to accomplish the purposes of this Act.

In promulgating such rules, the Commissioner may consider establishing separate net worth requirements for not-for-profit entities or their affiliates that are serving economically depressed or financially underserved areas.

In lieu of the net worth requirement established by this Section, the Commissioner may accept evidence of conformance by the licensee with the net worth requirements of the United States Department of Housing and Urban Development.

(Source:

P.A.

93-561, eff.

1-1-04.) (205 ILCS 635/4-1) (from Ch.

17, par.

The functions, powers, and duties of the SB2908 Engrossed - 15 - LRB093 18470 SAS 44184 b Commissioner of Banks and Real Estate shall include the following:

(h-1) To issue orders against any person, if the Commissioner has reasonable cause to believe that an unsafe, unsound, or unlawful practice has occurred, is occurring, or is about to occur, if any person has violated, is violating, or is about to violate any law, rule, or written agreement with the SB2908 Enrolled - 20 - LRB093 18470 SAS 44184 b Commissioner, or for the purpose of administering the provisions of this Act and any rule adopted in accordance with the Act;

(h-2) To address any inquiries to any licensee, or the officers thereof, in relation to its activities and conditions, or any other matter connected with its affairs, and it shall be the duty of any licensee or person so addressed, to promptly reply in writing to such inquiries.

The Commissioner may also require reports from any licensee at any time the Commissioner may deem desirable;

SB2908 Engrossed - 16 - LRB093 18470 SAS 44184 b (k) To enforce provisions of this Act;

(m) To appoint examiners, supervisors, experts, and SB2908 Enrolled - 21 - LRB093 18470 SAS 44184 b special assistants as needed to effectively and efficiently administer this Act;

(o) To exercise exclusive visitorial power over a licensee andunless tootherwise permitauthorized by this Act or as vested in the courts, or upon prior consultation with the Commissioner, a foreign residential mortgage regulator with an appropriate supervisory interest in the parent or affiliate of a licensee to exercise exclusive visitorial power over a licensee;

(q) To assign an examiner or examiners to monitor the affairs of a licensee with whatever frequency the Commissioner determines appropriate and to charge the licensee for SB2908 Engrossed - 17 - LRB093 18470 SAS 44184 b reasonable and necessary expenses of the Commissioner, if in the opinion of the Commissioner an emergency exists or appears likely to occur;

7-3-96.) (205 ILCS 635/4-5)635/4-2) (from Ch.

2324-2) Sec.

4-2.

Examination;

prohibited activities.

(a) The business affairs of a licensee under this Act shall be examined for compliance with this Act as often as the Commissioner deems necessary and proper.

The Commissioner shall promulgate rules with respect to the frequency and manner SB2908 Enrolled - 22 - LRB093 18470 SAS 44184 b of examination.

The Commissioner shall appoint a suitable person to perform such examination.

The Commissioner and his appointees may examine the entire books, records, documents, and operations of each licensee and may examine any of the licensee’s officers, directors, employees and agents under oath.

(b) The Commissioner shall prepare a sufficiently detailed report of each licensee’s examination, shall issue a copy of such report to each licensee’s principals, officers, or directors and shall take appropriate steps to ensure correction of violations of this Act.

(c) Affiliates of a licensee shall be subject to examination by the Commissioner on the same terms as the licensee, but only when reports from, or examination of a licensee provides for documented evidence of unlawful activity between a licensee and affiliate benefiting, affecting or deriving from the activities regulated by this Act.

(d) The expenses of any examination of the licensee and affiliates shall be borne by the licensee and assessed by the Commissioner as established by regulation.

(e) Upon completion of the examination, the Commissioner shall issue a report to the licensee.

All confidential supervisory information, including the The examination report, and the work papers of the report, shall belong to the Commissioner’s office and may not be disclosed to anyone other than the licensee, law enforcement officials or other regulatory agencies that have an appropriate regulatory interest as determined by the Commissioner shall be defined in rules promulgated by the Commissioner, or to a party presenting a lawful subpoena to the Office of the Commissioner.

The Commissioner may immediately appeal to the court of jurisdiction the disclosure of such confidential supervisory information and seek a stay of the subpoena pending the outcome of the appeal.

Reports required of licensees by the Commissioner under this Act and results of examinations performed by the Commissioner under this Act shall be the SB2908 Enrolled - 23 - LRB093 18470 SAS 44184 b property of only the licensee and the Commissioner, but may be shared with the licensee.

Access under this Act to the books and records of each licensee shall be limited to the Commissioner and his agents as provided in this Act and to the licensee and its authorized agents and designees.

No other person shall have access to the books and records of a licensee under this Act.

Any person upon whom a demand for production of confidential supervisory information is made, whether by subpoena, order, or other judicial or administrative process, must withhold production of the confidential supervisory information and must notify the Commissioner of the demand, at which time the Commissioner is authorized to intervene for the purpose of enforcing the limitations of this Section or seeking the withdrawal or termination of the attempt to compel production of the confidential supervisory information.

The Commissioner may impose any conditions and limitations on the disclosure of confidential supervisory information that are necessary to protect the confidentiality of such information.

Except as authorized by the Commissioner, no person obtaining access to confidential supervisory information may make a copy of the confidential supervisory information.

The Commissioner may condition a decision to disclose confidential supervisory information on entry of a protective order by the court or administrative tribunal presiding in the particular case or on a written agreement of confidentiality.

In a case in which a protective order or agreement has already been entered between parties other than the Commissioner, the Commissioner may nevertheless condition approval for release of confidential supervisory information upon the inclusion of additional or amended provisions in the protective order.

The Commissioner may authorize a party who obtained the records for use in one case to provide them to another party in another case, subject to any conditions that the Commissioner may impose on either or both parties.

The requestor shall promptly notify other parties to a case of the release of confidential supervisory information obtained and, upon entry of a protective order, SB2908 Enrolled - 24 - LRB093 18470 SAS 44184 b shall provide copies of confidential supervisory information to the other parties.

(f) The Commissioner, deputy commissioners, and employees of the Office of Banks and Real Estate shall be subject to the restrictions provided in Section 2.5 of the Office of Banks and Real Estate Act including, without limitation, the restrictions on (i) owning shares of stock or holding any other equity interest in an entity regulated under this Act or in any corporation or company that owns or controls an entity regulated under this Act;

(ii) being an officer, director, employee, or agent of an entity regulated under this Act;

and (iii) obtaining a loan or accepting a gratuity from an entity regulated under this Act.

(g) After the initial examination for those licensees whose only mortgage activity is servicing fewer than 1,000 Illinois residential loans, the examination required in subsection (a) may be waived upon submission of a letter from the licensee’s independent certified auditor that the licensee serviced fewer than 1,000 Illinois residential loans during the year in which the audit was performed.

(Source:

P.A.

90-301, eff.

8-1-97;

91-586, eff.

8-14-99.) (205 ILCS 635/4-5) (from Ch.

17, par.

(2) Any fact or condition exists which, if it had existed at the time of the original application for such license would have warranted the Commissioner in refusing SB2908 Enrolled - 25 - LRB093 18470 SAS 44184 b originally to issue such license.

Upon a showing that a licensee has SB2908 Engrossed - 18 - LRB093 18470 SAS 44184 b failed to meet the experience or educational requirements of Section 2-2 or the requirements of subsection (g) of Section 3-2, the Commissioner shall suspend, prior to hearing as provided in Section 4-12, the license until those requirements have been met.

(g) Whenever the Commissioner shall revoke or suspend a license issued pursuant to this Act or fine a licensee under SB2908 Enrolled - 26 - LRB093 18470 SAS 44184 b this Act, he or she shall forthwith execute in duplicate a written order to that effect.

The Commissioner shall publish notice of such order in the Illinois Register and post notice of the order on an agency Internet site maintained by the Commissioner a newspaper of general circulation in the county in which the license is located and shall forthwith serve a copy of such order upon the licensee.

SB2908 Engrossed - 19 - LRB093 18470 SAS 44184 b (3) Placement of the licensee or applicant on probation for a period of time and subject to all reasonable conditions as the Commissioner may specify;

(5) Insolvency or filing under any provision of the SB2908 Enrolled - 27 - LRB093 18470 SAS 44184 b Bankruptcy Code as a debtor;

(9) Having a license, or the equivalent, to practice SB2908 Engrossed - 20 - LRB093 18470 SAS 44184 b any profession or occupation revoked, suspended, or otherwise acted against, including the denial of licensure by a licensing authority of this State or another state, territory or country for fraud, dishonest dealing or any other act of moral turpitude;

(14) Failure to maintain, preserve, and keep available for examination, all books, accounts or other documents required by the provisions of this Act and the rules of the SB2908 Enrolled - 28 - LRB093 18470 SAS 44184 b Commissioner;

(k) Such licensee shall be subject to suspension or revocation for employee actions only if there is a pattern of SB2908 Engrossed - 21 - LRB093 18470 SAS 44184 b repeated violations by employees or the licensee has knowledge of the violations.

(2) Any licensee may surrender a license by delivering SB2908 Enrolled - 29 - LRB093 18470 SAS 44184 b to the Commissioner written notice that he or she thereby surrenders such license, but surrender shall not affect the licensee’s civil or criminal liability for acts committed prior to surrender or entitle the licensee to a return of any part of the license fee.

1-1-04.) (205 ILCS 635/4-9.1635/4-8.3 new) Sec.

4-9.1.4-8.3.

Annual report of mortgage and servicing activity.

On or before March 1 of each year, each licensee, except residential mortgage loan brokers, shall file a report with the Commissioner that shall disclose thesuch following information withas respect to the immediatelyCommissioner precedingrequires. calendar year:

(a)Exempt Aentities listas ofdefined homein mortgagessubsection granted,(d) issued,of originatedSection or1-4 closedshall duringnot file the annual report period,of withmortgage respectand toservicing whichactivity suchrequired SB2908by Engrossedthis -Section. 22 - LRB093 18470 SAS 44184 b licensee has had any connection.

This(205 listILCS shall635/6-2) show(from eachCh. census tract, in regions where such census tracts have been established, and by zip code in all other regions, the number and aggregate dollar amount of applications for, and the number granted and aggregate dollar amount of:

(1)17, Conventionalpar. mortgage loans;

(2)2326-2) MortgageSec. loans issued under the National Housing Act, Title 12, United States Code, Chapter 13;

and6-2. (3) Mortgage loans guaranteed under the provisions of the Federal Veteran’s Benefit Act, Title 38, United States Code, Chapter 37, Subchapter II.

(b)Removal Listand byprohibition. zip code in those areas having no census tract:

(1)(a) TheUpon totalmaking numberany one or more of homethe mortgagesfollowing onfindings, realthe estateCommissioner situatedmay inissue thisa Statenotice withof respectintent to whichissue thean licenseeorder hasof hadremoval anyor connectionprohibition, or an order of removal and prohibition, which areorder inmay defaultremove ona thenamed lastperson, daypersons, ofor entity or entities from participating in the reportingaffairs period;of one or more licensees and may be permanent or for a specific shorter period of time.

and (2) The totalfindings numberrequired ofunder claimsthis paidSection duringmay thebe reporting period on home mortgages with respect to which the licensee has had any connection,one includingor themore date of the firstfollowing: default thereon and the date each such foreclosure proceeding was instituted.

(c)(1) IfA thefinding Commissionerthat findsthe thatparty anotheror reportentity thatsubject to the licenseeorder ishas requiredbeen toconvicted compileof isa equivalentcrime involving material financial loss to thea Annuallicensee, Reporta offederally Mortgageinsured Activity,depository theninstitution, thea Commissionergovernment maysponsored acceptenterprise, thata reportFederal asHome fulfillingLoan theBank, reportinga requirementsFederal ofReserve thisBank, Section.or any other person.

The(2) reportA requiredfinding pursuantthat the person or entity subject to the Homeorder Mortgagehas Disclosuresubmitted Actor caused to be submitted any document that contains multiple willful and material misstatements of 1975,facts, 12and U.S.C.,that 2801includes etthe seq.signature of the person or SB2908 Enrolled - 30 - LRB093 18470 SAS 44184 b entity specified in the Commissioner’s order, or that is notarized, certified, verified or is in any other way attested to, as to its veracity.

andAn Federalapplication Reservefor Boardlicensure Regulationor C,license 12renewal C.F.R.may be considered such a document.

Part(3) 203,Conviction is an example of a reportbusiness thatoffense theunder Commissionersubsection may(e) find fulfills the requirements of thisSection Section,1-3 ifor thesubsection Commissioner(g) finds the report equivalent to the Annual Report of MortgageSection Activity.3-2.

(d)(4) TheA Commissionerfinding mayprepared alsoby requirea byhearing rulesofficer pursuant to a hearing held under Section 4-1(n) of this Act that licenseesthe reportperson suchsubject additionalto informationthe asorder, iswhile necessaryan employee of a licensee, has knowingly submitted or caused to assurebe strictsubmitted complianceany document that contains willful and material misstatement of facts and which is used in connection with any licensable activity as defined in Section 1-3(a) of this Act.

Notwithstanding(b) Whenever, in the exemptionopinion fromof licensurethe providedCommissioner, forany servicedirector, corporationsofficer, or employee of certaina savingslicensee institutionsshall andhave SB2908violated Engrossedany -law, 23rule, -or LRB093order 18470relating SASto 44184that blicensee subsidiariesor shall have obstructed or affiliatesimpeded ofany certainexamination banksor andinvestigation foreignby bankingthe corporationsCommissioner, shall have engaged in clausesan (viii)unsafe, andunsound, (ix)or ofunlawful paragraphpractice (1)in ofconducting subsectionthe (d)business of Sectionthe 1-4,licensee, suchor serviceshall corporations,have subsidiariesviolated any law or affiliatesengaged shallor fileparticipated in any unsafe, unsound or unlawful practice in connection with any licensee or other business entity such that the annualcharacter reportand fitness of mortgagethe activitydirector, requiredofficer, byor thisemployee Section.does not assure reasonable promise of safe, sound, and lawful operation of the licensee, the Commissioner may issue an order of removal.

(205If, ILCSin 635/4-15the new)opinion Sec.of the Commissioner, any former director, officer, or employee of a licensee, prior to the termination of his or her service with that licensee, violated any law, rule, or order relating to that licensee, obstructed or impeded any examination or investigation by the Commissioner, engaged in an unsafe or unsound practice in conducting the business of that licensee or any subsidiary or holding company of the licensee, or violated any law or engaged or participated in any unsafe, unsound, or SB2908 Enrolled - 31 - LRB093 18470 SAS 44184 b unlawful practice in connection with any financial institution or other business entity such that the character and fitness of the director, officer, or employee would not have assured reasonable promise of safe, sound, and lawful operation of the licensee, the Commissioner may issue an order prohibiting that person from further service with a licensee as a director, officer, or employee.

4-15.An order issued pursuant to this subsection shall be served upon the director, officer, or employee.

ReturnedA checks;copy of the order shall be sent to each owner or director of the licensee affected by registered mail.

fees.The person affected by the action may make a request to the Commissioner for a hearing pursuant to Section 4-1(n) within 10 days after receipt of the order.

AnyThe personhearing whoshall deliversbe aheld checkbefore ora otherhearing paymentofficer towithin the30 Commissionerdays thatafter isthe returnedrequest tohas thebeen Commissionerreceived unpaid by the financialCommissioner. institution upon which it is drawn shall pay to the Commissioner, in addition to the amount already owed to the Commissioner, a fee of $50.

The Commissionerhearing officer shall notifyprepare thea personfinding thatand paymentreport ofthe feessame andto finesthe shallCommissioner bewho paidshall toconsider the Commissionerfinding byin certifiedmaking checkhis ordetermination moneyapproving, ordermodifying, withinor 30disapproving calendarhis daysorder ofas thea notification.final administrative decision.

If,If aftera thehearing expirationis ofheld 30before daysa fromhearing theofficer, date of the notification, the person has failed to submit the necessary remittance, the Commissioner shall automaticallymake terminatehis thedetermination licensewithin or60 certificatedays offrom registration or deny the application,conclusion withoutof athe hearing.

If,Any after termination or denial, the person seeksaffected by a licensedecision or certificate of registration,the heCommissioner orunder shethis shallsubsection apply(b) tomay have the Commissionerdecision forreviewed restorationonly orunder issuanceand ofin theaccordance licensewith orthe certificateAdministrative ofReview registrationLaw and paythe allrules expensesadopted ofpursuant processingthereto. this application.

TheA Commissionercopy mayof establishthe aorder feeshall foralso be served upon the processinglicensee of anwhich applicationhe foris restorationa ofdirector, aofficer, licenseor employee, whereupon he shall cease to paybe alla thedirector, expensesofficer, ofor processingemployee thisof application.that licensee.

The Commissioner may waiveinstitute thea feescivil dueaction underagainst thisthe Sectiondirector, inofficer, individualor casesemployee whereof the Commissionerlicensee findsto thatenforce thecompliance feeswith wouldor beto unreasonableenjoin orany unnecessarilyviolation burdensome.of the terms of the order.

Any person who has been the subject of an order of removal or an order of prohibition issued by the Commissioner under this subsection may not thereafter serve as director, officer, or employee of any licensee, or of any other entity that is subject to licensure or regulation by the Commissioner unless the Commissioner has granted prior SB2908 Enrolled - 32 - LRB093 18470 SAS 44184 b approval in writing.

(Source:

P.A.

89-355, eff.

8-17-95;

90-772, eff.

1-1-99.)