093_SB1784ham002











                                     LRB093 10148 BDD 16994 a

 1                    AMENDMENT TO SENATE BILL 1784

 2        AMENDMENT NO.     .  Amend Senate Bill 1784, AS  AMENDED,
 3    with  reference  to  page and line numbers of House Amendment
 4    No. 1, on page 2, by replacing line 33 with the following:
 5    "brokers who transfer, deal in, offer, or make high risk home
 6    loans. "Lender" does not include  purchasers,  assignees,  or
 7    subsequent holders of high risk home loans."; and

 8    on  page  3,  line  33,  by changing "lender" to "creditor or
 9    broker"; and

10    on page 4, line 2,  by  changing  "lender"  to  "creditor  or
11    broker"; and

12    on  page  5,  immediately  below  line  15,  by inserting the
13    following:

14        "Section 30.  Prepayment penalty. For any  loan  that  is
15    subject  to  the provisions of this Act and is not subject to
16    the provisions of the Home Ownership and Equity Act of  1994,
17    no  lender  shall  make a high risk home loan that includes a
18    penalty provision for payment made: (i) after the  expiration
19    of  the 36-month period following the date the loan was made;
20    or (ii) that is more than:
21             (1)  3% of the total loan amount if  the  prepayment
 
                            -2-      LRB093 10148 BDD 16994 a
 1        is  made  within  the first 12-month period following the
 2        date the loan was made;
 3             (2)  2% of the total loan amount if  the  prepayment
 4        is  made  within the second 12-month period following the
 5        date the loan was made; or
 6             (3)  1% of the total loan amount if  the  prepayment
 7        is  made  within  the third 12-month period following the
 8        date the loan was made."; and

 9    on page 6, line 10, by changing "agreement" to "agent"; and

10    on page 13, line 20, by changing  "requirement"  to  "right";
11    and

12    on page 13, by replacing lines 25 and 26 with the following:
13        "(h)  Except as prohibited elsewhere in this Section, the
14    borrower  may  waive  participation  in the program, provided
15    that the waiver occurs no less than 2 business days after the
16    day  that  the  borrower  receives  the  notice  required  by
17    subsection (f) of this Section and  that  the  waiver  is  in
18    writing  in  a  form  approved  by  the  Commissioner and the
19    Director."; and

20    on page 13, line 31, after "Commissioner", by  inserting  "or
21    the Director"; and

22    on page 14, by replacing lines 28 and 29 with the following:

23        "Section 120. Review and analysis.
24        (a)  The   Commissioner  or  Director  shall  review  and
25    analyze the"; and

26    on  page  15,  by  replacing  lines  4  through  7  with  the
27    following:
28             "(3)  In comparing the  reported  information  of  a
29        servicer."; and

30    on  page  15,  line 8, after "Commissioner", by inserting "or
 
                            -3-      LRB093 10148 BDD 16994 a
 1    the Director"; and

 2    on page 16, line 7, by changing "Enforcement and remedies" to
 3    "Remedies, enforcement, and limitations of liability"; and

 4    on page 16, line 10, after "Any", by inserting "knowing"; and

 5    on page 16,  by  replacing  lines  15  through  24  with  the
 6    following:
 7        "(d)(1)  Any  natural  or artificial person who purchases
 8    or otherwise is assigned or subsequently holds  a  high  risk
 9    home  loan  shall  be  subject  to all affirmative claims and
10    defenses with respect to the loan  that  the  borrower  could
11    assert  against  the  lender  or broker of the loan, provided
12    that this item (d)(1)  shall  not  apply  if  the  purchaser,
13    assignee  or  holder  demonstrates  by a preponderance of the
14    evidence that it:
15             (A)  has in place, at  the  time  of  the  purchase,
16        assignment  or  transfer  of  the  loans,  policies  that
17        expressly prohibit its purchase, acceptance of assignment
18        or holding of any high risk home loans;
19             (B)  requires by contract that a seller, assignor or
20        transferor  of  high  risk  home  loans to the purchaser,
21        assignee or transferee represents  and  warrants  to  the
22        purchaser,  assignee  or  transferee  that either (i) the
23        seller, assignor or transferor will not sell,  assign  or
24        transfer  any  high  risk  home  loans  to the purchaser,
25        assignee or transferee, or (ii) the seller,  assignor  or
26        transferor  is  a  beneficiary  of  a  representation and
27        warranty from a previous seller, assignor  or  transferor
28        to that effect; and
29             (C)  exercises  reasonable due diligence at the time
30        of the purchase, assignment or transfer of high risk home
31        loans, or within a reasonable period of  time  after  the
32        purchase,  assignment  or  transfer  of  such home loans,
33        which  is  intended  by  the   purchaser,   assignee   or
 
                            -4-      LRB093 10148 BDD 16994 a
 1        transferee   to   prevent   the  purchaser,  assignee  or
 2        transferee  from  purchasing  or  taking  assignment   or
 3        otherwise holding any high risk home loans, provided that
 4        this  reasonable  due diligence requirement may be met by
 5        sampling and need not require loan-by-loan review.
 6        (2)  Limited  to  the  amount  required  to   reduce   or
 7    extinguish  the borrower's liability under the high cost home
 8    loan plus the amount required  to  recover  costs,  including
 9    reasonable  attorney  fees,  a  borrower  acting  only  in an
10    individual capacity may assert claims that the borrower could
11    assert against a lender of the home loan against a subsequent
12    holder or assignee of the home loan as follows:
13             (A)  within 5 years of the closing date  of  a  high
14        risk  home  loan,  a  violation of this Act in connection
15        with the loan as an original action; and
16             (B)  at any time during the term of a high risk home
17        loan, after an action to collect on the home loan  or  to
18        foreclose  on  the  collateral securing the home loan has
19        been initiated, or the debt arising from  the  home  loan
20        has been accelerated, or the home loan has become 60 days
21        in default, any defense, claim, counterclaim or action to
22        enjoin  foreclosure  or  preserve or obtain possession of
23        the home that secures the loan.
24        (e)  In addition to the limitation of liability  afforded
25    to   subsequent   purchasers,  assignees,  or  holders  under
26    subsection (d) of this Section, a  lender  and  a  subsequent
27    purchaser,  assignee, or holder of the high risk home loan is
28    not liable for"; and

29    on page 17, by replacing line 27 with the following:
30    "of any provision of this Act, except as explicitly  provided
31    in subsection (h) of Section 110."; and

32    on  page  18, line 3, after "laws,", by inserting "except the
33    Interest Act,"; and
 
                            -5-      LRB093 10148 BDD 16994 a
 1    on page 18, by deleting lines 7 through 15; and

 2    on page 65, by replacing lines 5 and 6 with the following:
 3        (2)  any person or entity that either (i) has a  physical
 4    presence in Illinois or (ii) does not originate"; and

 5    on  page  85, line 29, by changing "subsection (d)" to "items
 6    (1) and (1.5) of subsection (d)"; and

 7    on page 91, by replacing line 29 with the following:
 8    "Banking Act, Section 1-6a of the Illinois Savings  and  Loan
 9    Act  of 1985, or subsection (3) of Section 46 of the Illinois
10    Credit Union Act."; and

11    on  page  92,  line  29,  after  "bring  an",  by   inserting
12    "individual"; and

13    on  page  93,  immediately  below  line  8,  by inserting the
14    following:
15        "(c)  An action to enjoin any person subject to this  Act
16    from  engaging  in  activity in violation  of this Act may be
17    maintained in the name of the people of the State of Illinois
18    by the Attorney General or by the  State's  Attorney  of  the
19    county  in which the action is brought.  This remedy shall be
20    in addition to other remedies provided for any  violation  of
21    this Act."; and

22    on page 94, by replacing lines 2 and 3 with the following:

23        "Section  900.  Severability.  The provisions of this Act
24    are  severable  under  Section  1.31  of   the   Statute   on
25    Statutes.".