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91_HB3868ham001
LRB9112116SMdvam01
1 AMENDMENT TO HOUSE BILL 3868
2 AMENDMENT NO. . Amend House Bill 3868 by replacing
3 the title with the following:
4 "AN ACT to create the Home Loan Collateral Fund Act.";
5 and
6 by replacing everything after the enacting clause with the
7 following:
8 "Section 1. Short title. This Act may be cited as the
9 Home Loan Collateral Fund Act.
10 Section 5. Definitions. For purposes of this Act:
11 "Financial institution" means a bank, savings and loan
12 association, savings bank, or credit union that is lawfully
13 doing business in this State.
14 "Fund" means, unless the context requires otherwise, the
15 Home Loan Collateral Fund established by this Act.
16 "Home loan" means a loan, other than an open-end credit
17 plan or a reverse mortgage transaction, for which (i) the
18 principal amount of the loan does not exceed 50% of the
19 conforming loan size limit for a single-family dwelling as
20 established from time to time by the Federal National
21 Mortgage Association, (ii) the borrower is a natural person,
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1 (iii) the debt is incurred by the borrower primarily for
2 personal, family, or household purposes, and (iv) the loan is
3 secured by a mortgage or deed of trust on real estate upon
4 which there is located or there is to be located a structure
5 designed principally for the occupancy of one family and that
6 is or will be occupied by the borrower as the borrower's
7 principal dwelling.
8 Section 10. Home Loan Collateral Fund. The Home Loan
9 Collateral Fund is created as a special fund in the State
10 treasury. The Fund shall be administered by the State
11 Treasurer to provide collateral for Illinois citizens who
12 have applied for a home loan from a financial institution or
13 who have an existing home loan that requires additional
14 security to avoid foreclosure or other adverse action. All
15 interest earned from the investment or deposit of moneys
16 accumulated in the Fund shall, pursuant to Section 4.1 of the
17 State Finance Act, be deposited into the Fund. The State
18 Treasurer shall transfer from the General Revenue Fund to the
19 Fund an amount equal to the full amount of moneys
20 appropriated by the General Assembly for transfer to the
21 Fund.
22 Section 15. Administration. The State Treasurer shall
23 administer the Fund as follows:
24 (1) Upon application by a financial institution
25 extending a home loan to an Illinois citizen purchasing a
26 home in Illinois, the State Treasurer may pledge a portion of
27 the Fund to the financial institution. The amount of the
28 Fund pledged to secure a home loan shall not exceed 10% of
29 the appraised value of the home. In order for a home loan to
30 qualify for collateralization from the Fund, the financial
31 institution making the loan must certify to the State
32 Treasurer that the financial institution would not offer the
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1 borrower a home loan pursuant to the financial institution's
2 prevailing credit standards without the pledge of additional
3 collateral from the Fund.
4 (2) Upon application by a financial institution, the
5 State Treasurer may pledge a portion of the Fund to a
6 financial institution that has made a home loan to an
7 Illinois citizen who has failed to make payments on the home
8 loan as a result of a temporary layoff or disability. To
9 qualify, the borrower must have resumed making payments on
10 the home loan and have made at least 2 consecutive payments
11 at the time of application. The pledge from the Fund must be
12 used to secure the payments on the home loan that are past
13 due. The amount of the Fund that is pledged to a financial
14 institution for a home loan shall not exceed the amount of
15 the mortgage payments that are past due.
16 (3) No more than 3% of the Fund may be pledged to secure
17 home loans that are or would be outstanding from any one
18 financial institution at any point in time.
19 (4) The State Treasurer's costs to administer the Fund
20 may be paid from the Fund. The amount paid from the Fund for
21 this purpose may not exceed 5% of the amount of the Fund in
22 any one State fiscal year.
23 Section 20. Participation by financial institutions. No
24 financial institution shall be compelled in any instance to
25 apply for a pledge of collateral from the Fund or to modify
26 its credit standards with respect to any pending application
27 for a home loan as a result of its decision to apply or not
28 to apply for a pledge of collateral from the Fund. The
29 acceptance of a pledge of collateral from the Fund does not
30 prohibit the financial institution from exercising collection
31 actions or from taking other adverse action with respect to a
32 home loan if the status of the home loan deteriorates
33 subsequent to the acceptance of the pledge from the Fund.
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1 Section 25. Rules and procedures. The State Treasurer
2 shall establish rules and procedures for the administration
3 of the Fund and the Home Loan Collateral Fund Act including,
4 but not limited to, the process by which a financial
5 institution may apply for a pledge of a portion of the Fund
6 and the process or criteria that the State Treasurer may
7 employ in approving or denying an application by a financial
8 institution.
9 Section 95. The State Finance Act is amended by adding
10 Section 5.541 as follows:
11 (30 ILCS 105/5.541 new)
12 Sec. 5.541. The Home Loan Collateral Fund. This Fund is
13 not subject to the provisions of subsection (c) of Section
14 5.".