SB 1998 — MULTISTATE MORTGAGE LICENSING

"Servicer" means any entity chartered under the Illinois Banking Act, the Savings Bank Act, the Illinois Credit Union Act, or the Illinois Savings and Loan Act of 1985 and any person or entity licensed under the Residential Mortgage License Act of 1987, the Consumer Installment Loan Act, or the Sales Finance Agency Act who is responsible for the collection or remittance for or has the right or obligation to collect or remit for any lender, note owner, or note holder or for a lender’s own account of payments, interest, principal, and SB1998 Engrossed - 3 - LRB095 18639 MJR 44726 b escrow items (such as hazard insurance and taxes on a residential mortgage loan) in accordance with the terms of the home loan, including loan payment follow up, delinquency loan follow up, loan analysis, and any notifications to the borrower that are necessary to enable the borrower to keep the loan current and in good standing.

Section 15.

Counseling prior to perfecting foreclosure proceedings.

(a) Except for home loans in which any borrower has filed for relief under the United States Bankruptcy Code, if a home loan becomes delinquent by more than 30 days, the servicer shall send a notice advising the borrower that he or she may wish to seek approved credit counseling.

(b) The notice required in subsection (a) of this Section shall state the date on which the notice was mailed, shall be headed in bold, 14-point type, "GRACE PERIOD NOTICE", and shall state the following in 14-point type:

"YOUR LOAN IS OR WAS MORE THAN 30 DAYS PAST DUE.

YOU MAY BE EXPERIENCING FINANCIAL DIFFICULTY.

IT MAY BE IN YOUR BEST INTEREST TO SEEK APPROVED HOUSING OR CREDIT COUNSELING.

YOU HAVE A GRACE PERIOD OF 30 DAYS FROM THE DATE OF THIS FORM TO OBTAIN APPROVED HOUSING OR CREDIT COUNSELING.

DURING THE GRACE PERIOD, THE LAW PROHIBITS US FROM TAKING ANY LEGAL ACTION AGAINST YOU.

A LIST OF APPROVED COUNSELING AGENCIES MAY BE OBTAINED FROM THE ILLINOIS DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION." The SB1998 Engrossed - 4 - LRB095 18639 MJR 44726 b notice shall also list the Department’s current consumer hotline, the Department’s website, and the telephone number, fax number, and mailing address of the servicer’s loss mitigation department.

No language, other than the language prescribed in this subsection (b), shall be included in the notice.

The requirements of this subsection (b) shall be deemed satisfied if the language and format prescribed in this subsection (b) is included in a counseling notification required under federal law.

(c) Upon mailing the notice provided for under subsection (b) of this Section, neither the lender, servicer, nor lender’s agent shall institute legal action under Part 15 of Article XV of the Code of Civil Procedure for 30 days.

Only one such 30-day period of forbearance is allowed under this subsection (c) per subject loan.

(d) If, within the 30-day period provided under subsection (c) of this Section, an approved counseling agency notifies the lender, servicer, or lender’s agent that the borrower is seeking approved counseling services, then the lender, servicer, or lender’s agent shall not institute legal action under Part 15 of Article XV of the Code of Civil Procedure for 30 days after the date of that notice.

During the 30-day period provided under this subsection (d), the borrower or counselor or both may prepare and proffer to the lender, servicer, or lender’s agent a proposed debt management plan.

The lender, servicer, or lender’s agent shall then determine whether to SB1998 Engrossed - 5 - LRB095 18639 MJR 44726 b accept the proposed debt management plan, based upon an evaluation of the borrower’s ability to repay the loan under the proffered plan, in light of the borrower’s current income and other financial resources.

If the lender, servicer, or lender’s agent and the borrower agree to a debt management plan, then the lender, servicer, or lender’s agent shall not institute legal action under Part 15 of Article XV of the Code of Civil Procedure for as long as the debt management plan is complied with by the borrower.

The agreed debt management plan and any modifications thereto must be in writing and signed by the lender, servicer, or lender’s agent and the borrower.

Upon written notice to the lender, servicer, or lender’s agent, the borrower may change approved counseling agencies, but such a change does not entitle the borrower to any additional period of forbearance.

(e) If the borrower fails to comply with the agreed debt management plan, then nothing in this Section shall be construed to impair the legal right of the lender, servicer, or lender’s agent to enforce the contract.

(f) This Section is repealed on December 31, 2010.

Section 20.

Foreclosure Prevention Report;

requirements.

A servicer shall compile and submit to the Secretary on or before the twentieth business day of every other month a Foreclosure Prevention Report that contains the following information for the preceding 2 months or as otherwise indicated:

SB1998 Engrossed - 6 - LRB095 18639 MJR 44726 b (1) The number of home loans the servicer is servicing.

(2) The number of home loans that the servicer is servicing that are in payment default.

(3) Information on loss mitigation activities undertaken, including, but not limited to, the following:

(A) the number and identification of home loans that were refinanced into more affordable or fixed home loans;

(B) the number and identification of home loans for which the borrower has sought housing or credit counseling, if known;

(C) the number of workout arrangements entered into by the servicer in connection with home loans;

and (D) the proactive steps taken by the servicer to identify borrowers at a heightened risk of default, such as those with impending interest rate resets, including, but not limited to, contacts with borrowers to assess their ability to repay their home loan obligations.

(4) The number of foreclosure actions commenced in this State in connection with home loans it is servicing.

(5) Any other information that the Secretary may deem necessary, including geographic information regarding applicable home loans.

Section 25.

Foreclosure Prevention Report;

form and manner SB1998 Engrossed - 7 - LRB095 18639 MJR 44726 b prescribed by Secretary.

The Secretary shall prescribe the form and manner for filing the Foreclosure Prevention Report.

This Section is repealed on December 31, 2010.

Section 30.

Foreclosure Prevention Report;

publication.

The Secretary may publish for public review the Foreclosure Prevention Report or any information contained in the Foreclosure Prevention Report, except personally identifying information regarding borrowers.

This Section is repealed on December 31, 2010.

Section 90.

Enforcement.

(a) The Secretary shall have the power to issue orders against any person or entity if the Secretary has reasonable cause to believe that a violation of this Act has occurred, is occurring, or is about to occur, if any person has violated, is violating, or is about to violate any law, rule, order, or written agreement with the Secretary, or for the purpose of administering the provisions of this Act and any rule promulgated in accordance with this Act.

(b) The Secretary may impose civil penalties of up to $1,000 against any person for each violation of any provision of this Act, any rule promulgated in accordance with this Act, or any order of the Secretary.

The Secretary shall also have the power to subpoena witnesses, to administer an oath, to examine any person under oath, and to require the production of SB1998 Engrossed - 8 - LRB095 18639 MJR 44726 b any relevant books, papers, accounts, and documents in the course of and pursuant to any investigation being conducted or any action being taken by the Secretary in respect of any matter relating to the duties imposed upon or the powers vested in the Secretary under the provisions of this Act or any rule promulgated in accordance with this Act.

(c) Any actions taken by the Secretary pursuant to this Section shall be done in accordance with the Illinois Administrative Procedure Act.

Section 95.

Rulemaking.

The Department may adopt reasonable rules to implement and administer this Act.

Section 100.

Judicial review.

All final administrative decisions under this Act are subject to judicial review pursuant to the provisions of the Administrative Review Law and any rules adopted pursuant thereto.

Section 105.

Waiver prohibited.

There shall be no waiver of any provision of this Act.

Section 900.

The Residential Mortgage License Act of 1987 is amended by changing Sections 1-3, 1-4, 1-5, 2-2, 2-3, 2-4, 2-5, 2-6, 2-7, 2-8, 2-9, 2-11, 3-1, 3-2, 3-3, 3-4, 3-5, 3-9, 4-1, 4-2, 4-3, 4-4, 4-5, 4-6, 4-8, 4-8.1, 4-8.2, 4-8.3, 4-10, 4-11, 4-12, 4-13, 5-1, 6-3, and 7-1 and by adding Section 1-1.5 SB1998 Engrossed - 9 - LRB095 18639 MJR 44726 b as follows:

Findings.Findings;

Theprocedures Generalfor Assemblymultistate finds that establishing and implementing an automated multistate licensing systemsystem. for residential mortgage licensees is consistent with and furthers the Purpose of Act and Policy Statement of Section 1-2.

(1) The General Assembly finds that establishing and implementing an automated multistate licensing system for residential mortgage licensees is consistent with and furthers the Purpose of Act and Policy Statement of Section 1-2.

(c) to cause criminal history background checks by the SB1998 - 2 - LRB095 18639 MJR 44726 b Illinois State Police and Federal Bureau of Identification to be performed for use in the multistate automated licensing system;

and SB1998 Engrossed - 10 - LRB095 18639 MJR 44726 b (e) to share licensing information in the multistate automated licensing system pursuant to agreement with participating state regulators and to protect licensing information as so required by this Act or other applicable law.

(205(2) ILCSThe 635/1-3)Director (fromshall Ch.not require any exempt person to submit information to the multistate automated licensing system.

For purposes of this Section, "exempt person" means any individual or company exempt from licensure in this State.

(3) No person shall be authorized to obtain information from the multistate automated licensing system or initiate any action based on information obtained from the multistate automated licensing system that the person could not otherwise have obtained or initiated based on information currently available under existing State law.

(4) The Director shall accept and abide by the Privacy, Data Security, and Security Breach Notification Policy, as adopted by the multistate automated licensing system, and ensure that it is in full compliance with existing State law.

The Director may make available, upon written request, a copy of the contract between the Department and the multistate automated licensing system that satisfies the provisions of this subsection (4).

(5) The Director may, upon written request and consistent with other state regulators, provide the most recently available audited financial report of the multistate automated licensing system.

SB1998 Engrossed - 11 - LRB095 18639 MJR 44726 b (205 ILCS 635/1-3) (from Ch.

The licensing provisions of this Section shall not apply to any entity engaged solely in commercial mortgage lending or to any person, partnership association, corporation or other entity exempted SB1998 - 3 - LRB095 18639 MJR 44726 b pursuant to Section 1-4, subsection (d), of this Act or in accordance with regulations promulgated by the Director Commissioner hereunder.

(b) No person, partnership, association, corporation, or other entity except a licensee under this Act or an entity exempt from licensing pursuant to Section 1-4, subsection (d), of this Act shall do any business under any name or title, or circulate or use any advertising or make any representation or SB1998 Engrossed - 12 - LRB095 18639 MJR 44726 b give any information to any person, which indicates or reasonably implies activity within the scope of this Act.

(d) When the Director Commissioner has reasonable cause to believe that any entity which has not submitted an application for licensure is conducting any of the activities described in subsection (a) hereof, the Director Commissioner shall have the power to examine all books and records of the entity and any additional documentation necessary in order to determine SB1998 - 4 - LRB095 18639 MJR 44726 b whether such entity should become licensed under this Act.

SB1998 Engrossed - 13 - LRB095 18639 MJR 44726 b (f) Each person, partnership, association, corporation or other entity conducting activities regulated by this Act shall be issued one license.

Each office, place SB1998 - 5 - LRB095 18639 MJR 44726 b of business or location at which a residential mortgage licensee conducts any part of his or her business must be recorded with the Director Commissioner pursuant to Section 2-8 of this Act.

(h) This Act applies to all entities doing business in Illinois as residential mortgage bankers, as defined by "An Act to provide for the regulation of mortgage bankers", approved September 15, 1977, as amended, regardless of whether licensed SB1998 Engrossed - 14 - LRB095 18639 MJR 44726 b under that or any prior Act.

2321-4) SB1998 - 6 - LRB095 18639 MJR 44726 b Sec.

SB1998 Engrossed - 15 - LRB095 18639 MJR 44726 b (c) "Soliciting, processing, placing, or negotiating a residential mortgage loan" shall mean for compensation or gain, either directly or indirectly, accepting or offering to accept an application for a residential mortgage loan, assisting or offering to assist in the processing of an application for a residential mortgage loan on behalf of a borrower, or negotiating or offering to negotiate the terms or conditions of a residential mortgage loan with a lender on behalf of a borrower including, but not limited to, the submission of credit packages for the approval of lenders, the preparation of residential mortgage loan closing documents, including a closing in the name of a broker.

SB1998 - 7 - LRB095 18639 MJR 44726 b (1) (i) Any banking organization or foreign banking corporation licensed by the Director Illinois Commissioner of Banks and Real Estate or the United States Comptroller of the Currency to transact business in this State;

SB1998 Engrossed - 16 - LRB095 18639 MJR 44726 b (viii) any service corporation or subsidiary of a savings and loan association or savings bank organized under the laws of this State, or any other state, or the service corporation or subsidiary of a federally chartered savings and loan association or savings bank having its principal place of business in this State, other than a service corporation or subsidiary licensed or entitled to reciprocity under the Real Estate License Act of 2000;

or (ix) any first tier subsidiary of a bank, the charter of which is issued under the Illinois Banking Act by the Illinois Department of Financial and Professional Regulation, Division of Banking, or the charter of which is issued under the banking laws of any other state SB1998 - 8 - LRB095 18639 MJR 44726 b Commissioner of Banks and Real Estate, or the first tier subsidiary of a bank chartered by the United States Comptroller of the Currency and that has its principal place of business in this State, provided that the first tier subsidiary is regularly examined by the Illinois Commissioner of Banks and Real Estate or the Comptroller of the Currency, or a consumer compliance examination is regularly conducted by the Federal Reserve Board.

(2) Any person or entity that does not originate mortgage loans in the ordinary course of business making or acquiring residential mortgage loans with his or her or its SB1998 Engrossed - 17 - LRB095 18639 MJR 44726 b own funds for his or her or its own investment without intent to make, acquire, or resell more than 10 residential mortgage loans in any one calendar year.

SB1998 - 9 - LRB095 18639 MJR 44726 b (5) Any individual, corporation, partnership, or other entity that originates, services, or brokers residential mortgage loans, as these activities are defined in this Act, and who or which receives no compensation for those activities, subject to the Director’s Commissioner’s regulations with regard to the nature and amount of compensation.

provided that this activity is engaged in SB1998 Engrossed - 18 - LRB095 18639 MJR 44726 b pursuant to a binding, written agreement between the licensee and the preparer that:

(f) "Mortgage loan" "residential mortgage loan" or "home SB1998 - 10 - LRB095 18639 MJR 44726 b mortgage loan" shall mean a loan to or for the benefit of any natural person made primarily for personal, family, or household use, primarily secured by either a mortgage on residential real property or certificates of stock or other evidence of ownership interests in and proprietary leases from, corporations, partnerships, or limited liability companies formed for the purpose of cooperative ownership of residential real property, all located in Illinois.

(h) "Ultimate equitable owner" shall mean a person who, directly or indirectly, owns or controls an ownership interest SB1998 Engrossed - 19 - LRB095 18639 MJR 44726 b in a corporation, foreign corporation, alien business organization, trust, or any other form of business organization regardless of whether the person owns or controls the ownership interest through one or more persons or one or more proxies, powers of attorney, nominees, corporations, associations, partnerships, trusts, joint stock companies, or other entities or devices, or any combination thereof.

(j) "Personal residence address" shall mean a street SB1998 - 11 - LRB095 18639 MJR 44726 b address and shall not include a post office box number.

(n) "Director" "Commissioner" shall mean the Director of the Division of Banking of the Department of Financial and Professional Regulation Commissioner of Banks and Real Estate SB1998 Engrossed - 20 - LRB095 18639 MJR 44726 b or a person authorized by the Director, the Division of Banking of the Department of Financial and Professional Regulation Commissioner, the Office of Banks and Real Estate Act, or this Act to act in the Director’s 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 SB1998 - 12 - LRB095 18639 MJR 44726 b residential mortgage loans.

(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 SB1998 Engrossed - 21 - LRB095 18639 MJR 44726 b accordance with the terms of the residential mortgage loan;

The management and operation of each SB1998 - 13 - LRB095 18639 MJR 44726 b full service office must include observance of good business practices such as adequate, organized, and accurate books and records;

SB1998 Engrossed - 22 - LRB095 18639 MJR 44726 b (t) "Borrower" shall mean the person or persons who seek the services of a loan broker, originator, or lender.

(w) "Advertisement" shall mean the attempt by publication, SB1998 - 14 - LRB095 18639 MJR 44726 b 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.

(z) "Annual audit" shall mean a certified audit of the SB1998 Engrossed - 23 - LRB095 18639 MJR 44726 b 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.

(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 SB1998 - 15 - LRB095 18639 MJR 44726 b mortgage loan.

(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 SB1998 Engrossed - 24 - LRB095 18639 MJR 44726 b licensee or any company that controls the licensee;

(ee) "First tier subsidiary" shall be defined by regulation SB1998 - 16 - LRB095 18639 MJR 44726 b incorporating the comparable definitions used by the Office of the Comptroller of the Currency and the "Director"Director 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 SB1998 Engrossed - 25 - LRB095 18639 MJR 44726 b 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 "Director"Director 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 "Director"Director Commissioner pursuant to subsection (b) of Section 4-8 of this Act.

SB1998 - 17 - LRB095 18639 MJR 44726 b (ii) "Confidential supervisory information" means any report of examination, visitation, or investigation prepared by the "Director"Director 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 Director 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 SB1998 Engrossed - 26 - LRB095 18639 MJR 44726 b course of business or any information or record that is required to be made publicly available pursuant to State or federal law or rule.

The majority of persons on the Board shall have no financial interest in any residential mortgage business SB1998 - 18 - LRB095 18639 MJR 44726 b 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.

If a vacancy occurs on the Residential Mortgage Board, the Director Commissioner shall within 60 days appoint a new member SB1998 Engrossed - 27 - LRB095 18639 MJR 44726 b who shall hold office for the remainder of the vacated term.

SB1998 - 19 - LRB095 18639 MJR 44726 b (c) Conflict of interest declarations.

(a) The Director Commissioner shall issue a license upon SB1998 Engrossed - 28 - LRB095 18639 MJR 44726 b completion of all of the following:

(3) The payment, in certified funds, of investigation and application fees, the total of which shall be in an SB1998 - 20 - LRB095 18639 MJR 44726 b amount equal to $2,700 annually, however, alternatively a licensing fee equal to $2,700 shall be paid through an approved credit card or Automated Clearing House (ACH) payment to the multistate automated licensing system.

SB1998 Engrossed - 29 - LRB095 18639 MJR 44726 b (5) The filing of proof satisfactory to the Director Commissioner that the applicant, the members thereof if the applicant is a partnership or association, the members or managers thereof that retain any authority or responsibility under the operating agreement if the applicant is a limited liability company, or the officers thereof if the applicant is a corporation have 3 years experience preceding application in real estate finance.

Instead of this requirement, the applicant and the applicant’s officers or members, as applicable, may satisfactorily complete a program of education in real estate finance and fair lending, as approved by the Director Commissioner, prior to receiving the initial SB1998 - 21 - LRB095 18639 MJR 44726 b license.

(6) An investigation of the averments required by Section 2-4, which investigation must allow the Director Commissioner to issue positive findings stating that the financial responsibility, experience, character, and general fitness of the license applicant and of the members thereof if the license applicant is a partnership or association, of the officers and directors thereof if the SB1998 Engrossed - 30 - LRB095 18639 MJR 44726 b license applicant is a corporation, and of the managers and members that retain any authority or responsibility under the operating agreement if the license applicant is a limited liability company are such as to command the confidence of the community and to warrant belief that the business will be operated honestly, fairly and efficiently within the purpose of this Act.

These conditions SB1998 - 22 - LRB095 18639 MJR 44726 b shall be imposed in writing and shall continue in effect for the period prescribed by the Director Commissioner.

1-1-05.) SB1998 Engrossed - 31 - LRB095 18639 MJR 44726 b (205 ILCS 635/2-3) (from Ch.

If the license applicant is a partnership, association, corporation or other form of business SB1998 - 23 - LRB095 18639 MJR 44726 b organization, the application shall contain the names and complete business and residential addresses of each member, director and principal officer thereof.

SB1998 Engrossed - 32 - LRB095 18639 MJR 44726 b (3) Information as to the character, fitness, financial and business responsibility, background, experience, and criminal record of any (i) person, entity, or ultimate equitable owner that owns or controls, directly or indirectly, 10% or more of any class of stock of the license applicant;

(iii) person, entity, or ultimate equitable owner that controls, directly or indirectly, the election of 25% SB1998 - 24 - LRB095 18639 MJR 44726 b or more of the members of the board of directors of a license applicant;

The Director Commissioner may promulgate rules prescribing the SB1998 Engrossed - 33 - LRB095 18639 MJR 44726 b form and content of the affidavit that are necessary to accomplish the purposes of this Section.

Each application for SB1998 - 25 - LRB095 18639 MJR 44726 b license or for the renewal of a license shall be accompanied by the following averments stating that the applicant:

SB1998 Engrossed - 34 - LRB095 18639 MJR 44726 b (d) Will file with the Director, or multistate automated licensing system Commissioner, when due, any report or reports which it is required to file under any of the provisions of this Act;

SB1998 - 26 - LRB095 18639 MJR 44726 b (g) Will not make payment, whether directly or indirectly, of any kind to any in house or fee appraiser of any government or private money lending agency with which an application for a home mortgage has been filed for the purpose of influencing the independent judgment of the appraiser with respect to the value of any real estate which is to be covered by such home mortgage;

SB1998 Engrossed - 35 - LRB095 18639 MJR 44726 b (j) Will not knowingly make any false promises likely to influence or persuade, or pursue a course of misrepresentation and false promises through agents, solicitors, advertising or otherwise;

(m) Has not committed a crime against the law of this State, any other state or of the United States, involving SB1998 - 27 - LRB095 18639 MJR 44726 b moral turpitude, fraudulent or dishonest dealing, and that no final judgment has been entered against it in a civil action upon grounds of fraud, misrepresentation or deceit which has not been previously reported to the Director Commissioner;

(n) Will account or deliver to the owner upon request any 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 which is not its property, or which it is not in law or equity entitled to retain under the circumstances, at the time which has been agreed upon or is required by law, or, in the absence of a fixed time, upon demand of the person entitled to such SB1998 Engrossed - 36 - LRB095 18639 MJR 44726 b accounting and delivery;

(s) Will advise the Director Commissioner in writing, or the multistate automated licensing system by electronic means, of any changes to the information submitted on the most recent application for license within 30 days of said SB1998 - 28 - LRB095 18639 MJR 44726 b change, or by the date required for entry of changes to the multistate automated licensing system.

(w) Will advise the Director Commissioner in writing SB1998 Engrossed - 37 - LRB095 18639 MJR 44726 b within 30 days of any request made to when the license applicant requests a licensee under this Act to repurchase a loan in a manner that completely and clearly identifies to whom the request was made, the loans involved, and the reason for the request , and the circumstances therefor;

and SB1998 - 29 - LRB095 18639 MJR 44726 b (z) Will not knowingly hire or employ a loan originator who is not registered with the Director Commissioner as required under Section 7-1 of this Act.

(1) it is determined that the applicant is not in SB1998 Engrossed - 38 - LRB095 18639 MJR 44726 b compliance with any provisions of the Act or the provisions of the multistate automated licensing system as approved by the Director;

(a) Beginning July 1, 2003, licenses shall be renewed every year on the anniversary of the date of issuance of the original SB1998 - 30 - LRB095 18639 MJR 44726 b license, or if the multistate automated licensing system is approved, then on the common renewal date selected for the multistate automated licensing system.

Failure by a licensee to submit a properly SB1998 Engrossed - 39 - LRB095 18639 MJR 44726 b completed renewal application form, or complete renewal on the multistate automated licensing system, and pay fees in a timely fashion, absent a written extension from the Director Commissioner, will result in the assessment of additional fees, as follows:

(2) Such fee will be assessed without prior notice to SB1998 - 31 - LRB095 18639 MJR 44726 b the licensee, but will be assessed only in cases wherein the Director Commissioner has in his or her possession documentation of the licensee’s continuing activity for which the unrenewed license was issued.

The Director Commissioner may allow a licensee with an inactive license to conduct activities regulated by this Act for the sole purpose of assisting SB1998 Engrossed - 40 - LRB095 18639 MJR 44726 b borrowers in the closing or funding of loans for which the loan application was taken from a borrower while the license was active.

(e) A licensee ceasing an activity or activities regulated by this Act and desiring to no longer be licensed shall so inform the Director Commissioner in writing and, at the same time, convey the license and all other symbols or indicia of SB1998 - 32 - LRB095 18639 MJR 44726 b licensure, or request a license status change on the multistate automated licensing system.

1-1-05.) SB1998 Engrossed - 41 - LRB095 18639 MJR 44726 b (205 ILCS 635/2-7) (from Ch.

(1) A verification that the firm services only 100 or fewer loans secured by residential real estate situated in SB1998 - 33 - LRB095 18639 MJR 44726 b Illinois;

A request for waiver of the filing fee must be submitted SB1998 Engrossed - 42 - LRB095 18639 MJR 44726 b each year in conjunction with the license renewal procedure.

(b) Upon receipt of the notice and fee required in subsection (a) above, the Commissioner shall issue a SB1998 - 34 - LRB095 18639 MJR 44726 b certificate for the additional full-service office, or the license status shall be posted to the multistate automated licensing system.

The license of a licensee whose home office is within the State of Illinois or of an out-of-state licensee, if issued by the Director, shall be conspicuously posted in every office of the licensee located in SB1998 Engrossed - 43 - LRB095 18639 MJR 44726 b Illinois.

In addition to any license SB1998 - 35 - LRB095 18639 MJR 44726 b fee collected under this Act, the Director Commissioner shall by rule and regulation establish a schedule to apply to assessment and collection of necessary contingent and miscellaneous fees.

(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 SB1998 Engrossed - 44 - LRB095 18639 MJR 44726 b 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.

The bond shall be in the form and amount approved by the Director Commissioner who may at any time require one or SB1998 - 36 - LRB095 18639 MJR 44726 b more additional bonds.

(c) All licensees shall maintain a bond in accordance with SB1998 Engrossed - 45 - LRB095 18639 MJR 44726 b this subsection.

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 SB1998 - 37 - LRB095 18639 MJR 44726 b Division of Banking of the Department of Financial and Professional Regulation Office of Banks and Real Estate within 10 days of the execution thereof.

(a) At the licensee’s fiscal year-end, but in no case more than 12 months after the last audit conducted pursuant to this SB1998 Engrossed - 46 - LRB095 18639 MJR 44726 b Section, except as otherwise provided in this Section, it shall be mandatory for each residential mortgage licensee to cause its books and accounts to be audited by a certified public accountant licensed under the Illinois Public Accounting Act or by an equivalent state licensing law not connected with such licensee.

Notwithstanding the requirements of this subsection, a licensee that is a first tier subsidiary may SB1998 - 38 - LRB095 18639 MJR 44726 b submit audited consolidated financial statements of its parent as long as the consolidated statements are supported by consolidating statements.

SB1998 Engrossed - 47 - LRB095 18639 MJR 44726 b (d) The most recent audit report shall be filed with the Director Commissioner within 90 days after the end of the licensee’s fiscal year.

SB1998 - 39 - LRB095 18639 MJR 44726 b (f) In lieu of the audit or compilation financial statement required by this Section, a licensee shall submit and the Director Commissioner may accept any audit made in conformance with the audit requirements of the U.S.

(g) With respect to licensees who solely broker residential mortgage loans as defined in subsection (o) of Section 1-4, instead of the audit required by this Section, the Director Commissioner may accept 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 SB1998 Engrossed - 48 - LRB095 18639 MJR 44726 b 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 SB1998 - 40 - LRB095 18639 MJR 44726 b employed by each licensee for purposes of this Section are to be made available to the Director Commissioner or the Director’s Commissioner’s designee upon request and may be reproduced by the Director Commissioner or the Director’s Commissioner’s designee to enable to the Director 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 Director Commissioner at the time of the annual license renewal payment following receipt by the licensee of the audited or SB1998 Engrossed - 49 - LRB095 18639 MJR 44726 b reviewed financial statements.

In addition to such other rules, regulations and policies as the Director Commissioner may promulgate to effectuate the purpose of this Act, the Director Commissioner shall prescribe regulations governing the advertising of mortgage loans, including without limitation, SB1998 - 41 - LRB095 18639 MJR 44726 b the following requirements:

(c) No licensee shall advertise its services in Illinois in SB1998 Engrossed - 50 - LRB095 18639 MJR 44726 b any media, whether print or electronic, without the words "Illinois Residential Mortgage Licensee".

(a) A licensee whose principal place of business is located in the State of Illinois shall maintain at least one full service office with staff reasonably adequate to handle efficiently communications, questions, and all other matters relating to any application for a home mortgage or an existing home mortgage with respect to which such licensee is performing services, regardless of kind, for any borrower or lender, note SB1998 - 42 - LRB095 18639 MJR 44726 b owner or holder, or for himself or herself while engaged in the residential mortgage business.

SB1998 Engrossed - 51 - LRB095 18639 MJR 44726 b (1) maintain a limited service office in Illinois that is adequate to accommodate a full-scope examination of the licensee’s books and records as they relate to activity in Illinois, as determined by the Department;

The Department may promulgate rules permitting licensees that do not comply with the net worth requirement established on the effective date of this SB1998 - 43 - LRB095 18639 MJR 44726 b amendatory Act of the 95th General Assembly to do so within 12 months after the effective date of this amendatory Act of the 95th General Assembly.

A licensee that first obtains a license after SB1998 Engrossed - 52 - LRB095 18639 MJR 44726 b 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.

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 SB1998 - 44 - LRB095 18639 MJR 44726 b $50,000.

1-1-04.) SB1998 Engrossed - 53 - LRB095 18639 MJR 44726 b (205 ILCS 635/3-9) (from Ch.

functions, powers, and SB1998 - 45 - LRB095 18639 MJR 44726 b duties.

SB1998 Engrossed - 54 - LRB095 18639 MJR 44726 b (f) To prescribe the forms of and receive:

(h-1) To issue orders against any person, if the Director SB1998 - 46 - LRB095 18639 MJR 44726 b 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 Director Commissioner, or for the purpose of administering the provisions of this Act and any rule adopted in accordance with the Act;

The Director Commissioner may also require reports from any licensee at any time the SB1998 Engrossed - 55 - LRB095 18639 MJR 44726 b Director Commissioner may deem desirable;

SB1998 - 47 - LRB095 18639 MJR 44726 b (k) To enforce provisions of this Act;

SB1998 Engrossed - 56 - LRB095 18639 MJR 44726 b (m) To appoint examiners, supervisors, experts, and special assistants as needed to effectively and efficiently administer this Act;

(o) To exercise exclusive visitorial power over a licensee unless otherwise authorized by this Act or as vested in the SB1998 - 48 - LRB095 18639 MJR 44726 b courts, or upon prior consultation with the Director Commissioner, a foreign residential mortgage regulator with an appropriate supervisory interest in the parent or affiliate of 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 reasonable and necessary expenses of the Director Commissioner, if in the opinion of the Director Commissioner an SB1998 Engrossed - 57 - LRB095 18639 MJR 44726 b emergency exists or appears likely to occur;

The Director Commissioner SB1998 - 49 - LRB095 18639 MJR 44726 b shall appoint a suitable person to perform such examination.

(b) The Director Commissioner shall prepare a sufficiently detailed report of each licensee’s examination, shall issue a SB1998 Engrossed - 58 - LRB095 18639 MJR 44726 b 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.

(e) Upon completion of the examination, the Director SB1998 - 50 - LRB095 18639 MJR 44726 b Commissioner shall issue a report to the licensee.

Reports required of licensees by the Director Commissioner under this SB1998 Engrossed - 59 - LRB095 18639 MJR 44726 b Act and results of examinations performed by the Director Commissioner under this Act shall be the property of only the Director Commissioner, but may be shared with the licensee.

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 Director Commissioner of the demand, at which time the Director SB1998 - 51 - LRB095 18639 MJR 44726 b 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 Director 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 SB1998 Engrossed - 60 - LRB095 18639 MJR 44726 b particular case or on a written agreement of confidentiality.

The requestor shall promptly notify other parties to a case of the release of confidential supervisory information obtained and, upon entry of a SB1998 - 52 - LRB095 18639 MJR 44726 b protective order, shall provide copies of confidential supervisory information to the other parties.

(ii) being an officer, director, employee, or agent of an entity regulated under this SB1998 Engrossed - 61 - LRB095 18639 MJR 44726 b Act;

(a) SB1998 - 53 - LRB095 18639 MJR 44726 b The Director Commissioner shall have the power to issue and to serve subpoenas and subpoenas duces tecum to compel the attendance of witnesses and the production of all books, accounts, records and other documents and materials relevant to an examination or investigation.

(b) In the event of noncompliance with a subpoena or subpoena duces tecum issued or caused to be issued by the Director Commissioner, the Director Commissioner may petition the circuit court of the county in which the person subpoenaed resides or has its principal place of business for an order requiring the subpoenaed person to appear and testify and to SB1998 Engrossed - 62 - LRB095 18639 MJR 44726 b produce such books, accounts, records and other documents as are specified in the subpoena duces tecum.

The court may grant such other relief, including, but not limited to, the restraint, by injunction or appointment of a receiver, of any transfer, pledge, assignment or other disposition of the person’s assets or any concealment, alteration, destruction or other disposition of books, accounts, records or other documents and materials as the court deems appropriate, until the person has fully complied with the subpoena or subpoena SB1998 - 54 - LRB095 18639 MJR 44726 b duces tecum and the Director Commissioner has completed an investigation or examination.

The court shall cause to be SB1998 Engrossed - 63 - LRB095 18639 MJR 44726 b endorsed on the order a suitable amount of bond or payment pursuant to which the person named in the order shall be freed, having a due regard to the nature of the case.

Penalties.(a) In addition to any reports required under SB1998 - 55 - LRB095 18639 MJR 44726 b this Act, every licensee shall file such other reports as the Director Commissioner shall request.

2324-5) SB1998 Engrossed - 64 - LRB095 18639 MJR 44726 b Sec.

(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 Director Commissioner in SB1998 - 56 - LRB095 18639 MJR 44726 b refusing originally to issue such license.

(c) The Director Commissioner, on good cause shown that an emergency exists, may suspend any license for a period not SB1998 Engrossed - 65 - LRB095 18639 MJR 44726 b exceeding 180 days, pending investigation.

(f) Every license issued under this Act shall remain in SB1998 - 57 - LRB095 18639 MJR 44726 b force and effect until the same shall have expired without renewal, have been surrendered, revoked or suspended in accordance with the provisions of this Act, but the Director Commissioner shall have authority to reinstate a suspended license or to issue a new license to a licensee whose license shall have been revoked if no fact or condition then exists which would have warranted the Director Commissioner in refusing originally to issue such license under this Act.

The Director Commissioner shall publish notice of such order in the Illinois SB1998 Engrossed - 66 - LRB095 18639 MJR 44726 b Register or and post notice of the order on an agency Internet site maintained by the Director Commissioner and shall forthwith serve a copy of such order upon the licensee.

SB1998 - 58 - LRB095 18639 MJR 44726 b (3) Placement of the licensee or applicant on probation for a period of time and subject to all reasonable conditions as the Director Commissioner may specify;

(1) Being convicted or found guilty, regardless of pendency of an appeal, of a crime in any jurisdiction which involves fraud, dishonest dealing, or any other act of SB1998 Engrossed - 67 - LRB095 18639 MJR 44726 b moral turpitude;

(6) Failure to account or deliver to any person any property such as any money, fund, deposit, check, draft, mortgage, or other document or thing of value, which has SB1998 - 59 - LRB095 18639 MJR 44726 b come into his or her hands and which is not his or her property or which he or she is not in law or equity entitled to retain, under the circumstances and at the time which has been agreed upon or is required by law or, in the absence of a fixed time, upon demand of the person entitled to such accounting and delivery;

(9) Having a license, or the equivalent, to practice any profession or occupation revoked, suspended, or otherwise acted against, including the denial of licensure SB1998 Engrossed - 68 - LRB095 18639 MJR 44726 b by a licensing authority of this State or another state, territory or country for fraud, dishonest dealing or any other act of moral turpitude;

(12) Engaging in activities regulated by this Act without a current, active license unless specifically SB1998 - 60 - LRB095 18639 MJR 44726 b exempted by this Act;

(15) Refusing, obstructing, evading, or unreasonably delaying an investigation, information request, or examination authorized under this Act, or refusing, obstructing, evading, or unreasonably delaying compliance with the Director’s Refusal to permit an investigation or examination of the licensee’s or its affiliates’ books and SB1998 Engrossed - 69 - LRB095 18639 MJR 44726 b records or refusal to comply with the Commissioner’s subpoena or subpoena duces tecum;

(k) Such licensee shall be subject to suspension or revocation for employee actions only if there is a pattern of repeated violations by employees or the licensee has knowledge SB1998 - 61 - LRB095 18639 MJR 44726 b of the violations.

(i) The licensee has failed to comply with any provision of this Act or any order, decision, finding, SB1998 Engrossed - 70 - LRB095 18639 MJR 44726 b rule, regulation or direction of the Director Commissioner lawfully made pursuant to the authority of this Act;

SB1998 - 62 - LRB095 18639 MJR 44726 b (Source:

85-735.) SB1998 Engrossed - 71 - LRB095 18639 MJR 44726 b (205 ILCS 635/4-8) (from Ch.

The Director Commissioner may require a licensee to provide SB1998 - 63 - LRB095 18639 MJR 44726 b loan default data as the Director Commissioner deems necessary for the proper enforcement of the Act.

SB1998 Engrossed - 72 - LRB095 18639 MJR 44726 b (d) The Director Commissioner, at his or her discretion, may hold public hearings, or at the direction of the Residential Mortgage Board, shall hold public hearings.

The SB1998 - 64 - LRB095 18639 MJR 44726 b testimony must be preceded by either a letter of complaint or a completed consumer complaint form prescribed by the Commissioner.

The plan shall be implemented by the SB1998 Engrossed - 73 - LRB095 18639 MJR 44726 b licensee as approved by the Director Commissioner.

90-301, SB1998 - 65 - LRB095 18639 MJR 44726 b eff.

On or before March 1 of each year, or by the date selected by the multistate automated licensing SB1998 Engrossed - 74 - LRB095 18639 MJR 44726 b system, each licensee, except residential mortgage brokers, shall file a report of its mortgage, brokerage, and servicing activity with the Director Commissioner that shall disclose such information as the Commissioner requires.

(a) In addition to such powers as may be SB1998 - 66 - LRB095 18639 MJR 44726 b prescribed by this Act, the Director Commissioner is hereby authorized and empowered to promulgate regulations consistent with the purposes of this Act, including but not limited to:

and SB1998 Engrossed - 75 - LRB095 18639 MJR 44726 b (4) Such rules and regulations as may be necessary for the enforcement of this Act.

(a) In addition to such powers as may be prescribed by this Act, the Director Commissioner is hereby authorized and SB1998 - 67 - LRB095 18639 MJR 44726 b empowered to promulgate regulations consistent with the purposes of this Act, including but not limited to:

and (4) Such rules and regulations as may be necessary for SB1998 Engrossed - 76 - LRB095 18639 MJR 44726 b the enforcement of this Act.

SB1998 - 68 - LRB095 18639 MJR 44726 b (d) No provision in this Act that imposes liability or establishes violations shall apply to any act taken by a person or entity in conformity with a written interpretation of this Act that is in effect at the time the act is taken, notwithstanding whether the written interpretation is later amended, rescinded, or determined by judicial or other authority to by invalid for any reason.

The expenses of administering this Act, including investigations and examinations provided for in this SB1998 Engrossed - 77 - LRB095 18639 MJR 44726 b Act shall be borne by and assessed against entities regulated by this Act.

(a) Any person or entity SB1998 - 69 - LRB095 18639 MJR 44726 b affected by a decision of the Director Commissioner under any provision of this Act may obtain review of such decision within the Office of the Director Commissioner.

(2) appropriate procedural rules, specific deadlines for SB1998 Engrossed - 78 - LRB095 18639 MJR 44726 b filings, and standards of evidence and of proof;

2324-13) SB1998 - 70 - LRB095 18639 MJR 44726 b Sec.

Such SB1998 Engrossed - 79 - LRB095 18639 MJR 44726 b rules shall include provision for assessment of fees and costs.

When the Director Commissioner makes a finding that a receivership or SB1998 - 71 - LRB095 18639 MJR 44726 b conservatorship is necessary to protect consumers of a licensee from the consequences of the licensee’s failures to comply with this Act or other unsafe and unsound practices, the Director Commissioner shall request the Attorney General of this State to petition the Circuit Court of Cook County, or of the county in which the licensee is located, to appoint a receiver or conservator for purposes of protecting consumers and resolving the affairs of the licensee.

Beginning 6 months after the effective date of this amendatory SB1998 Engrossed - 80 - LRB095 18639 MJR 44726 b Act of the 93rd General Assembly, it is unlawful for any natural person to act or assume to act as a loan originator, as defined in subsection (hh) of Section 1-4, without being registered with the Director Commissioner unless the natural person is exempt under items (1) and (1.5) of subsection (d) of Section 1-4 of this Act.

Where this Act makes SB1998 - 72 - LRB095 18639 MJR 44726 b changes in a statute that is represented in this Act by text that is not yet or no longer in effect (for example, a Section represented by multiple versions), the use of that text does not accelerate or delay the taking effect of (i) the changes made by this Act or (ii) provisions derived from any other Public Act.

Section 99.950.

Severability.

The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.

Section 999.

SB1998 Engrossed - 7381 - LRB095 18639 MJR 44726 b INDEX Statutes amended in order of appearance 205 ILCS 635/1-1.5 new 205 ILCS 635/1-3 from Ch.

2324-4 SB1998 Engrossed - 7482 - LRB095 18639 MJR 44726 b 205 ILCS 635/4-5 from Ch.