97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB5572

 

Introduced 2/15/2012, by Rep. Joe Sosnowski

 

SYNOPSIS AS INTRODUCED:
 
815 ILCS 137/10

    Amends the High Risk Home Loan Act. Excludes loans made under the Veteran's Administration Interest Rate Reduction Refinancing Loan program from the scope of the Act.


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A BILL FOR

 

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1    AN ACT concerning lending practices.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The High Risk Home Loan Act is amended by
5changing 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
9approved by the Director of Financial Institutions.
10    "Borrower" means a natural person who seeks or obtains a
11high risk home loan.
12    "Commissioner" means the Commissioner of the Office of
13Banks and Real Estate.
14    "Department" means the Department of Financial
15Institutions.
16    "Director" means the Director of Financial Institutions.
17    "Good faith" means honesty in fact in the conduct or
18transaction concerned.
19    "High risk home loan" means a home equity loan in which (i)
20at the time of origination, the annual percentage rate exceeds
21by more than 6 percentage points in the case of a first lien
22mortgage, or by more than 8 percentage points in the case of a
23junior mortgage, the yield on U.S. Treasury securities having

 

 

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1comparable periods of maturity to the loan maturity as of the
2fifteenth day of the month immediately preceding the month in
3which the application for the loan is received by the lender or
4(ii) the total points and fees payable by the consumer at or
5before closing will exceed the greater of 5% of the total loan
6amount or $800. The $800 figure shall be adjusted annually on
7January 1 by the annual percentage change in the Consumer Price
8Index for All Urban Consumers for all items published by the
9United States Department of Labor. "High risk home loan" does
10not include a loan that is made primarily for a business
11purpose unrelated to the residential real property securing the
12loan, or to an open-end credit plan subject to 12 CFR 226
13(2000, no subsequent amendments or editions are included), or a
14loan made under the Veteran's Administration Interest Rate
15Reduction Refinancing Loan program.
16    "Home equity loan" means any loan secured by the borrower's
17primary residence where the proceeds are not used as purchase
18money for the residence.
19    "Lender" means a natural or artificial person who
20transfers, deals in, offers, or makes a high risk home loan.
21"Lender" includes, but is not limited to, creditors and brokers
22who transfer, deal in, offer, or make high risk home loans.
23"Lender" does not include purchasers, assignees, or subsequent
24holders of high risk home loans.
25    "Office" means the Office of Banks and Real Estate.
26    "Points and fees" means all items required to be disclosed

 

 

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1as points and fees under 12 CFR 226.32 (2000, no subsequent
2amendments or editions included); the premium of any single
3premium credit life, credit disability, credit unemployment,
4or any other life or health insurance that is financed directly
5or indirectly into the loan; and compensation paid directly or
6indirectly to a mortgage broker, including a broker that
7originates a loan in its own name in a table-funded
8transaction, not otherwise included in 12 CFR 226.4.
9    "Reasonable" means fair, proper, just, or prudent under the
10circumstances.
11    "Servicer" means any entity chartered under the Illinois
12Banking Act, the Savings Bank Act, the Illinois Credit Union
13Act, or the Illinois Savings and Loan Act of 1985 and any
14person or entity licensed under the Residential Mortgage
15License Act of 1987, the Consumer Installment Loan Act, or the
16Sales Finance Agency Act who is responsible for the collection
17or remittance for, or has the right or obligation to collect or
18remit for, any lender, note owner, or note holder or for a
19licensee's own account, of payments, interest, principal, and
20trust items (such as hazard insurance and taxes on a
21residential mortgage loan) in accordance with the terms of the
22residential mortgage loan, including loan payment follow-up,
23delinquency loan follow-up, loan analysis, and any
24notifications to the borrower that are necessary to enable the
25borrower to keep the loan current and in good standing.
26    "Total loan amount" has the same meaning as that term is

 

 

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1given in 12 CFR 226.32 and shall be calculated in accordance
2with the Federal Reserve Board's Official Staff Commentary to
3that regulation.
4(Source: P.A. 93-561, eff. 1-1-04.)