Illinois General Assembly - Full Text of HB2930
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Full Text of HB2930  97th General Assembly



State of Illinois
2011 and 2012


Introduced 2/23/2011, by Rep. Carol A. Sente - Elaine Nekritz - Lou Lang - Randy Ramey, Jr.


815 ILCS 137/10

    Amends the High Risk Home Loan Act. Provides that the term "points and fees" does not include fees paid to the United States Department of Veterans Affairs required by law, fees paid to the Federal Housing Administration required by law, or fees paid to the United States Department of Agriculture's Rural Development Loan Program required by law.

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1    AN ACT concerning business.
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
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 (2000,
13no subsequent amendments or editions are included).
14    "Home equity loan" means any loan secured by the borrower's
15primary residence where the proceeds are not used as purchase
16money for the residence.
17    "Lender" means a natural or artificial person who
18transfers, deals in, offers, or makes a high risk home loan.
19"Lender" includes, but is not limited to, creditors and brokers
20who transfer, deal in, offer, or make high risk home loans.
21"Lender" does not include purchasers, assignees, or subsequent
22holders of high risk home loans.
23    "Office" means the Office of Banks and Real Estate.
24    "Points and fees" means all items required to be disclosed
25as points and fees under 12 CFR 226.32 (2000, no subsequent
26amendments or editions included); the premium of any single



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1premium credit life, credit disability, credit unemployment,
2or any other life or health insurance that is financed directly
3or indirectly into the loan; and compensation paid directly or
4indirectly to a mortgage broker, including a broker that
5originates a loan in its own name in a table-funded
6transaction, not otherwise included in 12 CFR 226.4. "Points
7and fees" does not include: (i) fees paid to the United States
8Department of Veterans Affairs required by law; (ii) fees paid
9to the Federal Housing Administration required by law; or (iii)
10fees paid to the United States Department of Agriculture's
11Rural Development Loan Program required by law.
12    "Reasonable" means fair, proper, just, or prudent under the
14    "Servicer" means any entity chartered under the Illinois
15Banking Act, the Savings Bank Act, the Illinois Credit Union
16Act, or the Illinois Savings and Loan Act of 1985 and any
17person or entity licensed under the Residential Mortgage
18License Act of 1987, the Consumer Installment Loan Act, or the
19Sales Finance Agency Act who is responsible for the collection
20or remittance for, or has the right or obligation to collect or
21remit for, any lender, note owner, or note holder or for a
22licensee's own account, of payments, interest, principal, and
23trust items (such as hazard insurance and taxes on a
24residential mortgage loan) in accordance with the terms of the
25residential mortgage loan, including loan payment follow-up,
26delinquency loan follow-up, loan analysis, and any



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1notifications to the borrower that are necessary to enable the
2borrower to keep the loan current and in good standing.
3    "Total loan amount" has the same meaning as that term is
4given in 12 CFR 226.32 and shall be calculated in accordance
5with the Federal Reserve Board's Official Staff Commentary to
6that regulation.
7(Source: P.A. 93-561, eff. 1-1-04.)