|
|
|
|
96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
SB3287
Introduced 2/9/2010, by Sen. Terry Link SYNOPSIS AS INTRODUCED:
|
|
|
|
Amends the High Risk Home Loan Act. Provides that "high risk home loan" does not include a loan for reverse mortgage financing of residential real estate, including under programs regulated by the Federal Housing Administration (FHA).
|
| |
|
|
|
|
A BILL FOR
|
|
|
|
|
SB3287 |
|
LRB096 18716 DRJ 35394 b |
|
|
| 1 |
| AN ACT concerning business.
|
| 2 |
| Be it enacted by the People of the State of Illinois,
|
| 3 |
| represented in the General Assembly:
|
| 4 |
| Section 5. The High Risk Home Loan Act is amended by |
| 5 |
| changing Section 10 as follows:
|
| 6 |
| (815 ILCS 137/10)
|
| 7 |
| Sec. 10. Definitions. As used in this Act:
|
| 8 |
| "Approved credit counselor" means a credit counselor |
| 9 |
| approved by the
Director of Financial Institutions.
|
| 10 |
| "Borrower" means a natural person who seeks or obtains a |
| 11 |
| high risk
home loan.
|
| 12 |
| "Commissioner" means the Commissioner of the Office of |
| 13 |
| Banks and Real
Estate.
|
| 14 |
| "Department" means the Department of Financial |
| 15 |
| Institutions.
|
| 16 |
| "Director" means the Director of Financial Institutions.
|
| 17 |
| "Good faith" means honesty in fact in the conduct or |
| 18 |
| transaction concerned.
|
| 19 |
| "High risk home loan"
means a home equity loan in which (i) |
| 20 |
| at the time of origination, the annual
percentage rate
exceeds |
| 21 |
| by more than 6 percentage points in the case of a first lien |
| 22 |
| mortgage,
or
by more than 8 percentage points in the case of a |
| 23 |
| junior mortgage, the yield on
U.S. Treasury securities having |
|
|
|
SB3287 |
- 2 - |
LRB096 18716 DRJ 35394 b |
|
|
| 1 |
| comparable periods of maturity to the loan
maturity as of the |
| 2 |
| fifteenth day of the month immediately preceding the month
in
|
| 3 |
| which the application for the loan is received by the lender or |
| 4 |
| (ii) the total
points
and fees payable by the consumer at or |
| 5 |
| before closing will exceed the greater
of
5% of the total loan |
| 6 |
| amount or $800. The $800 figure shall be adjusted annually
on |
| 7 |
| January 1 by the annual percentage change in the Consumer Price |
| 8 |
| Index for
All Urban Consumers for all items published by the |
| 9 |
| United States Department of
Labor.
"High risk home loan"
does
|
| 10 |
| not include a loan for reverse mortgage financing of |
| 11 |
| residential real estate, including under programs regulated by |
| 12 |
| the Federal Housing Administration (FHA), or a loan that is |
| 13 |
| made primarily for a business purpose unrelated to
the
|
| 14 |
| residential real property securing the loan or to an open-end |
| 15 |
| credit plan
subject to
12 CFR 226 (2000, no subsequent |
| 16 |
| amendments or editions are included).
|
| 17 |
| "Home equity loan" means any loan secured by the borrower's |
| 18 |
| primary
residence where the proceeds are not used as purchase |
| 19 |
| money for the
residence.
|
| 20 |
| "Lender" means a natural or artificial person who |
| 21 |
| transfers, deals in,
offers, or makes a high risk home loan. |
| 22 |
| "Lender" includes, but is not limited
to,
creditors and
brokers |
| 23 |
| who transfer, deal in, offer, or make high risk home loans. |
| 24 |
| "Lender"
does not include purchasers, assignees, or subsequent |
| 25 |
| holders of high risk home
loans.
|
| 26 |
| "Office" means the Office of Banks and Real Estate.
|
|
|
|
SB3287 |
- 3 - |
LRB096 18716 DRJ 35394 b |
|
|
| 1 |
| "Points and fees" means all items required to be disclosed |
| 2 |
| as points and
fees under 12 CFR 226.32 (2000, no subsequent |
| 3 |
| amendments or editions
included); the premium of any single |
| 4 |
| premium credit life, credit disability,
credit
unemployment, |
| 5 |
| or any other life or health insurance that is financed directly
|
| 6 |
| or
indirectly into the loan; and compensation paid directly or |
| 7 |
| indirectly to a
mortgage
broker, including a broker that |
| 8 |
| originates a loan in its own name in a
table-funded
|
| 9 |
| transaction, not otherwise included in 12 CFR 226.4.
|
| 10 |
| "Reasonable" means fair, proper, just, or prudent under the |
| 11 |
| circumstances.
|
| 12 |
| "Servicer" means any entity chartered under the Illinois |
| 13 |
| Banking Act, the
Savings Bank Act, the Illinois Credit Union |
| 14 |
| Act, or the Illinois Savings and
Loan Act of 1985 and any |
| 15 |
| person or entity licensed under the Residential
Mortgage |
| 16 |
| License Act of 1987, the Consumer Installment Loan Act, or the |
| 17 |
| Sales
Finance Agency Act who
is responsible for the collection |
| 18 |
| or remittance for, or has the right or
obligation to collect or |
| 19 |
| remit for, any lender, note owner, or note holder or
for a |
| 20 |
| licensee's own account, of payments, interest, principal, and |
| 21 |
| trust items
(such as hazard
insurance and taxes on a |
| 22 |
| residential mortgage loan) in accordance with the
terms of the |
| 23 |
| residential mortgage loan, including loan payment follow-up,
|
| 24 |
| delinquency loan follow-up, loan analysis, and any |
| 25 |
| notifications to
the borrower that are necessary to enable the |
| 26 |
| borrower to keep the loan current
and in good
standing.
|