Public Act 094-1029
 		





SB0304 Enrolled
LRB094 06877 JAM 36984 b






    AN ACT concerning government.

 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:

 
    Section 5. The Residential Real Property Disclosure Act is 
amended  by changing Section 70 as follows:
 
    (765 ILCS 77/70)
    Sec. 70. Predatory lending database pilot program.
    (a) As used in this Article:
    "Borrower" means a person seeking a mortgage loan.

    "Broker" means a "broker" or "loan broker", as defined in 
subsection (p) of  Section 1-4 of the Residential Mortgage 
License Act of 1987.
    "Closing agent" means an individual assigned by a title 
insurance company or a broker or  originator to ensure that the 
execution of documents related to the closing of a real estate 
sale or the refinancing of a real estate loan and the 
disbursement of closing funds are in conformity with the 
instructions of the entity financing the transaction.

    "Department" means the Department of Financial and 
Professional Regulation.

    "Exempt person" means that term as it is defined in 
subsections (d)(1) and (d)(1.5) of Section 1-4 of the 
Residential Mortgage License Act of 1987.

    "Lender" means that term as it is defined in subsection (g) 
of Section 1-4 of the Residential Mortgage License Act.

    "Licensee" means that term as it is defined in subsection 
(e) of Section 1-4 of the Residential Mortgage License Act of 
1987.

    "Mortgage loan" means that term as it is defined in 
subsection (f) of Section 1-4 of the Residential Mortgage 
License Act of 1987.

    "Originator" means a "loan originator" as defined in 
subsection (hh) of Section 1-4 of the Residential Mortgage 
License Act of 1987, except an exempt person.
    "Pilot program area" means all areas within Cook County 
designated as such by the Department due to the high rate of 
foreclosure on residential home mortgages that is primarily the 
result of predatory lending practices. The Department shall 
designate the pilot program area within 30 days after the 
effective date of this amendatory Act of the 94th General 
Assembly.

    "Title insurance company" means any domestic company 
organized under the laws of this State for the purpose of 
conducting the business of guaranteeing or insuring titles to 
real estate and any title insurance company organized under the 
laws of another State, the District of Columbia, or a foreign 
government and authorized to transact the business of 
guaranteeing or insuring titles to real estate in this State.

    (a-5) Inception date. The Secretary of Financial and 
Professional Regulation shall declare in writing the date of 
inception of the pilot program. The inception date shall be no 
later than September 1, 2006, and shall be at least 30 days 
after the date the Secretary issues a declaration establishing 
that date. The Secretary's declaration shall be posted on the 
Department's website, and the Department shall communicate the 
declaration to affected licensees of the Department. Until the 
inception date, none of the duties, obligations, 
contingencies, or consequences of or from the pilot program 
shall be imposed. The pilot program shall apply to all mortgage 
applications that are governed by this Article and that are 
made or taken on or after the inception of the pilot program.

    (b) A predatory lending database pilot program is 
established within the pilot program area, effective upon the 
inception date established by the Secretary of the Department. 
The pilot program shall be in effect and operational
continue

for a total of 4 years after its creation and  shall be 
administered in accordance with Article 3 of this Act. The 
database created under this program shall be maintained and 
administered by the Department. The database shall be designed 
to allow brokers, originators, credit counselors, title 
insurance companies, and closing agents to submit information 
to the database online. The database shall not be designed to 
allow those entities to retrieve information from the database, 
except as otherwise provided in this Article. Information 
submitted by the broker or originator to the Department may be 
used to populate the online form submitted by a credit 
counselor, title insurance company, or closing agent.
    (c) Within 10 days after taking a mortgage application, the 
broker or originator for any mortgage on residential property 
within the pilot program area must submit to the predatory 
lending database all of the information required under Section 
72 and any other information required by the Department by 
rule. Within 7 days after receipt of the information, the 
Department shall compare that information to credit counseling 
standards developed by the Department by rule and issue to the 
borrower and the broker or originator a determination of 
whether credit counseling is recommended for the borrower. The 
borrower may not waive credit counseling. If at any time after 
submitting the information required under Section 72 the broker 
or originator (i) changes the terms of the loan or (ii) issues 
a new commitment to the borrower, then, within 5 days 
thereafter, the broker or originator shall re-submit all of the 
information required under Section 72 and, within 4 days after 
receipt of the information re-submitted by the broker or 
originator, the Department shall compare that information to 
credit counseling standards developed by the Department by rule 
and shall issue to the borrower and the broker or originator a 
new determination of whether credit counseling is recommended 
for the borrower based on the information re-submitted by the 
broker or originator.
    (d) If the Department recommends credit counseling for the 
borrower under subsection (c), then the Department shall notify 
the borrower  of all HUD-certified counseling agencies located 
within the State and direct the borrower to interview with a 
counselor associated with one of those agencies. Within 10 days 
after receipt of the notice of HUD-certified counseling 
agencies, the borrower shall select one of those agencies and 
shall engage in an interview with  a counselor associated with 
that agency. Within 7 days after interviewing the borrower, the 
credit counselor must submit to the predatory lending database 
all of the information required under Section 74 and any other 
information required by the Department by rule.  Any costs 
associated with credit counseling provided under the pilot 
program shall be paid by the broker or originator. A credit 
counselor who in good faith provides counseling services shall 
not be liable to a broker or originator for civil damages, 
except for willful or wanton misconduct on the part of the 
counselor in providing the counseling services.
    (e) The broker or originator and the borrower may not take 
any legally binding action concerning the loan transaction 
until the later of the following:
        (1) the Department issues a determination not to 
    recommend credit counseling for the borrower in accordance 
    with subsection (c); or
        (2) the Department issues a determination that credit 
    counseling is recommended for the borrower and the credit 
    counselor submits all required information to the database 
    in accordance with subsection (d).

    (f) Within 10 days after closing, the title insurance 
company or closing agent must submit to the predatory lending 
database all of the information required under Section 76 and 
any other information required by the Department by rule.
    (g) The
Upon recording the mortgage, the title insurance 
company or closing agent shall attach to the mortgage
must 
simultaneously file  with the recorder a certificate of its

compliance with the requirements of this Article, as generated 
by the database. If the title insurance company or closing 
agent fails to attach
file the certificate of compliance, then 
the mortgage is not recordable. In addition, if any lis pendens 
for a residential mortgage foreclosure is recorded on the 
property within the pilot program area, a certificate of 
service must be simultaneously recorded that affirms that a 
copy of the lis pendens was filed with the Department. If the 
certificate of service is not recorded, then the lis pendens 
pertaining to the residential mortgage foreclosure in question 
is not recordable and is of no force and effect.
    (h) All information provided to the predatory lending 
database under the program is confidential and is not subject 
to disclosure under the Freedom of Information Act, except as 
otherwise provided in this Article. Any borrower may authorize 
in writing  the release of database information. The Department 
may use the information in the database without the consent of 
the borrower: (i) for the purposes of administering and 
enforcing the pilot program; (ii) to provide relevant 
information to a credit counselor providing credit counseling 
to a borrower under the pilot program; or (iii) to the 
appropriate law enforcement agency or the applicable 
administrative agency if the database information demonstrates 
criminal, fraudulent, or otherwise illegal activity.

    (i) Nothing in this Article is intended to prevent a 
borrower from making his or her own decision as to whether to 
proceed with a transaction.

    (j) Any person who violates any provision of this Article 
commits an unlawful practice within the meaning of the Consumer 
Fraud and Deceptive Business Practices Act.

    (k) Not later than one year after the Department designates 
the pilot program area and annually thereafter during the 
existence of the pilot program, the Department shall report to 
the Governor and to the General Assembly concerning its 
administration and the effectiveness of the pilot program.


(Source: P.A. 94-280, eff. 1-1-06.)

 
    Section 99. Effective date. This Act takes effect upon 
becoming law.