Public Act 90-0455 of the 90th General Assembly
Public Act 90-0455
SB1076 Enrolled LRB9003310JSgc
AN ACT concerning mortgage insurance.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short Title. This Act may be cited as the
Mortgage Insurance Limitation and Notification Act.
Section 5. Application. This Act applies to mortgages
entered into on or after the effective date of this Act and
only to the principal single family residence of the
mortgagor.
Section 10. Definitions. For the purpose of this Act:
"Mortgagee" means the holder of an indebtedness secured
by a mortgage of a single family residence or the entity that
provides the servicing of the mortgage, meaning the receipt
of payments from the mortgagor and the administration of the
loan on behalf of the entity that holds the mortgage.
"Mortgage insurance" means insurance, including any
mortgage guaranty insurance, against the nonpayment of, or
default on, a mortgage or loan involved in a residential
mortgage transaction, the premiums of which are paid by the
mortgagor.
"Mortgagor" means a natural person whose interest in a
single family residence is the subject of a mortgage for
which the mortgagee has required mortgage insurance.
"Private mortgage insurance" means mortgage insurance
other than mortgage insurance made available under the
federal National Housing Act, title 38 of the United States
Code, or title V of the Housing Act of 1949.
Section 15. Transaction disclosure. After July 1, 1998,
if a person enters into a transaction to obtain a mortgage
for his or her principal residence and private mortgage
insurance may be required in connection with that
transaction, the mortgagee shall disclose in writing all of
the following:
(1) Whether private mortgage insurance will be
required to be obtained or maintained with respect to the
mortgage.
(2) The period during which the insurance shall be
required to be in effect.
(3) The conditions under which the mortgagor may
cancel the insurance.
(4) That the mortgagor will be notified not less
than annually of an address and telephone number that may
be used to contact the mortgagee to determine whether or
not the insurance may be terminated and, if the insurance
may be terminated, the conditions and procedures for
termination.
Section 20. Annual notification statement. After July
1, 1998, in addition to the transaction disclosure
requirement set forth in Section 10 and within 30 days after
the end of the calendar year, the mortgagee shall inform the
mortgagor in writing of the procedure to cancel the private
mortgage insurance together with the telephone number and
address. The annual statement required by this Section may
be printed on or included with any other annual statement
that is required by any federal or State law to be made by
the mortgagee to the mortgagor.
Nothing contained in this Section shall prevent a
mortgagee from waiving any or all of the conditions of its
cancellation policy in effect when the mortgage loan is
originated or from modifying its cancellation policy
applicable to a particular mortgage loan from time to time,
upon the written approval of the mortgagor. If a
cancellation policy is modified, the mortgagor shall be
notified within 30 days of material changes to the policy.
Section 30. Federal law. If federal law is enacted
governing or otherwise regulating private mortgage insurance,
a mortgagee who is governed by the provisions of this Act may
have the option to comply with the federal law, and
compliance with the federal law by the mortgagee shall be
deemed compliance with this Act.
Section 40. Severability. The provisions of this Act
are severable under Section 1.31 of the Statute on Statutes.
Section 99. Effective date. This Act takes effect July
1, 1998.