(205 ILCS 635/4-8)
(from Ch. 17, par. 2324-8)
Default rate; examination.
(a) The Commissioner shall obtain from the U.S. Department of Housing and
Urban Development on a semi-annual basis that Department's default claim rates
for endorsements issued by that Department.
(b) The Commissioner shall conduct an examination of each licensee
having a default rate equal to or greater than 5%.
This subsection shall not be construed as a limitation
of the Commissioner's examination authority under Section 4-2 of this Act or as
otherwise provided in this Act.
The Commissioner may require a licensee to provide loan default
data as the Commissioner deems necessary for the proper enforcement
of the Act.
(c) The purpose of the examination under subsection (b) shall be
to determine whether the default rate of the
licensee has resulted from practices which deviate from
sound and accepted mortgage underwriting practices, including but not
limited to credit fraud, appraisal fraud and property inspection fraud.
For the purpose of conducting this examination, the Commissioner may accept
materials prepared for the U.S. Department of Housing and Urban Development.
At the conclusion of the examination, the Commissioner shall make his or
her findings available to the Residential Mortgage Board.
(d) The Commissioner, at his or her discretion, may hold public
hearings, or at the direction of the Residential Mortgage Board, shall hold
public hearings. Such testimony shall be by a homeowner or mortgagor or his
agent, whose residential interest is affected by the activities of the
residential mortgage licensee subject to such hearing.
At such public hearing, a witness may present testimony on his or her behalf
concerning only his or her home, or home mortgage or a witness may authorize a
third party to appear on his or her behalf. The testimony shall be
restricted to information and comments related to a specific residence or
specific residential mortgage application or applications for a residential
mortgage or residential loan transaction. The testimony must be preceded
by either a letter of complaint or a completed consumer complaint form
prescribed by the Commissioner.
(e) The Commissioner shall, at the conclusion of the public hearings,
release his or her findings and shall also make public any action taken
with respect to the licensee. The Commissioner shall also give full
consideration to the findings of this examination whenever reapplication is
made by the licensee for a new license under this Act.
(f) A licensee that is examined pursuant to subsection (b)
shall submit to the Commissioner a plan which shall be designed to reduce that
licensee's default rate to a figure that is
less than 5%. The plan shall be implemented by the
licensee as approved by the Commissioner. A licensee that is
examined pursuant to subsection (b) shall report monthly,
for a one year period, one, 2, and 3 month defaults.
(g) Whenever the Commissioner finds that a licensee's
on insured mortgages is unusually high within a particular
geographic area, he or she shall require that licensee to submit such
information as is necessary to determine whether that licensee's practices
have constituted credit fraud, appraisal fraud or property inspection
fraud. The Commissioner shall promulgate such rules as are necessary to
determine whether any licensee's default rate is
unusually high within a particular area.
(Source: P.A. 89-355, eff. 1-1-96; 89-626, eff. 8-9-96; 90-301, eff. 8-1-97.)