Illinois General Assembly - Full Text of Public Act 096-0854
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Public Act 096-0854


 

Public Act 0854 96TH GENERAL ASSEMBLY



 


 
Public Act 096-0854
 
SB0253 Enrolled LRB096 03546 AJO 13571 b

    AN ACT concerning property.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Mortgage Escrow Account Act is amended by
adding Section 6.5 as follows:
 
    (765 ILCS 910/6.5 new)
    Sec. 6.5. Homeownership preservation program.
    (a) For purposes of this Section,
    "Homeownership Preservation Program" means
        (1) a program that is expressly intended to assist
    homeowners by refinancing or restructuring existing
    mortgage obligations either (i) to avoid default or
    foreclosure, or both, or (ii) to lower interest rates, and
    that is sponsored by a federal, state, or local government
    authority or a non-profit organization; or
        (2) a lender-sponsored program that is expressly
    intended to assist homeowners by restructuring existing
    mortgage obligations to avoid default or foreclosure, or
    both.
    "Subprime Mortgage Lender" means a mortgage lender that
has, for at least 2 of the prior 3 reporting years, reported
the rate spread, as required under 12 C.F.R. § 203.4(a)(12),
for at least 75% of the loans reported by the mortgage lender
in the Loan/Application Register filed in compliance with the
federal Home Mortgage Disclosure Act, 12 U.S.C. 2801 et seq.,
and implementing Regulation C, 12 C.F.R. 201 et seq.
    (b) Section 6 shall not apply:
        (1) to a mortgage loan made by a subprime mortgage
    lender in compliance with the requirements for
    higher-priced mortgage loans established in Regulation Z
    12 C.F.R. Part 226, issued by the Board of Governors of the
    Federal Reserve System to implement the federal Truth in
    Lending Act, whether or not the mortgage loan is a
    higher-priced mortgage loan, provided that:
            (A) for loans that are not higher-priced mortgage
        loans, the escrow account must be terminated upon the
        borrower's request at no cost to the borrower; and
            (B) for loans that are higher-priced mortgage
        loans, the escrow account must be terminated upon the
        borrower's request at no cost to the borrower on terms
        no stricter than the following conditions:
                (i) the escrow termination requirements
            established in Regulation Z are satisfied;
                (ii) the borrower has maintained a
            satisfactory payment history (no payments more
            than 30 days late) for the 12 months prior to the
            mortgage lender's receipt of the borrower's
            termination request; and
                (iii) the borrower has reimbursed the mortgage
            lender for any escrow advances or escrow
            deficiencies existing at the time of the
            borrower's termination request.
        (2) to a refinance or modification made by a subprime
    mortgage lender under a homeownership preservation program
    that requires establishment of an escrow account as a
    condition or requirement of the refinance or modification,
    provided that the escrow account must be terminated upon
    the borrower's request at no cost to the borrower on terms
    no stricter than the following conditions:
            (A) termination is permitted under the terms of the
        government or non-profit sponsored homeownership
        preservation program, if applicable, and the borrower
        complies with all conditions or requirements for
        termination established by or allowed under such
        program;
            (B) the borrower has maintained a satisfactory
        payment history (no payments more than 30 days late)
        for the 12 months prior to the mortgage lender's
        receipt of the borrower's termination request; and
            (C) the borrower has reimbursed the mortgage
        lender for any escrow advances or escrow deficiencies
        existing at the time of the borrower's termination
        request.
    Termination may not be denied for failure to reimburse
escrow advances or escrow deficiencies under item (iii) of
subparagraph (B) of paragraph (1) of subsection (b), or
subparagraph (C) of paragraph (2) of subsection (b) if the
borrower claims, in writing, that there is an error with such
advances or deficiencies. In such case, the lender must
terminate the escrow account if all other conditions of
termination are satisfied; however, such termination will not
alter or affect any other rights of the mortgage lender or the
borrower with respect to the collection of such escrow advances
or escrow deficiencies.
 
    Section 99. Effective date. This Act takes effect upon
becoming law.

Effective Date: 12/31/2009