205 ILCS 635/ Residential Mortgage License Act of 1987.

(205 ILCS 635/Art. II heading) ARTICLE II LICENSING PROCEDURE

(205 ILCS 635/2-1) (from Ch. 17, par. 2322-1)

Sec. 2-1. Licensee name.

(a) No person, partnership, association, corporation, limited liability company, or other entity engaged in the business regulated by this Act shall operate such business under a name other than the real names of the entity and individuals conducting such business. Such business may in addition operate under an assumed corporate name pursuant to the Business Corporation Act of 1983, an assumed limited liability company name pursuant to the Limited Liability Company Act, or an assumed business name pursuant to the Assumed Business Name Act.

(b) A knowing violation of this Section constitutes an unlawful practice within the meaning of this Act, and in addition to the administrative relief available under this Act, may be prosecuted for the commission of a Class A misdemeanor. A person who is convicted of a second or subsequent violation of this Section is guilty of a Class 4 felony.

(Source: P.A. 99-15, eff. 1-1-16.)

(205 ILCS 635/2-2)

Sec. 2-2. Application process; investigation; fee.

(a) The Secretary shall issue a license upon completion of all of the following:

(1) The filing of an application for license with the Director or the Nationwide Multistate Licensing System and Registry as approved by the Director.

(2) The filing with the Secretary of a listing of judgments entered against, and bankruptcy petitions by, the license applicant for the preceding 10 years.

(3) The payment, in certified funds, of investigation and application fees, the total of which shall be in an amount equal to $2,700 annually.

(4) Except for a broker applying to renew a license, the filing of an audited balance sheet including all footnotes prepared by a certified public accountant in accordance with generally accepted accounting principles and generally accepted auditing standards which evidences that the applicant meets the net worth requirements of Section 3-5. Notwithstanding the requirements of this subsection, an applicant that is a subsidiary may submit audited consolidated financial statements of its parent, intermediary parent, or ultimate parent as long as the consolidated statements are supported by consolidating statements which include the applicant's financial statement. If the consolidating statements are unaudited, the applicant's chief financial officer shall attest to the applicant's financial statements disclosed in the consolidating statements.

(5) The filing of proof satisfactory to the Secretary that the applicant, the members thereof if the applicant is a partnership or association, the members or managers thereof that retain any authority or responsibility under the operating agreement if the applicant is a limited liability company, or the officers thereof if the applicant is a corporation have 3 years experience preceding application in real estate finance. Instead of this requirement, the applicant and the applicant's officers or members, as applicable, may satisfactorily complete a program of education in real estate finance and fair lending, as approved by the Secretary, prior to receiving the initial license. The Secretary shall adopt rules regarding proof of experience requirements and educational requirements and the satisfactory completion of those requirements. The Secretary may establish by rule a list of duly licensed professionals and others who may be exempt from this requirement.

(6) An investigation of the application, which investigation must allow the Secretary to issue positive findings stating that the financial responsibility, experience, character, and general fitness of the license applicant and of the members thereof if the license applicant is a partnership or association, of the officers and directors thereof if the license applicant is a corporation, and of the managers and members that retain any authority or responsibility under the operating agreement if the license applicant is a limited liability company are such as to command the confidence of the community and to warrant belief that the business will be operated honestly, fairly and efficiently within the purpose of this Act. If the Secretary shall not so find, he or she shall not issue such license, and he or she shall notify the license applicant of the denial.

The Secretary may impose conditions on a license if the Secretary determines that the conditions are necessary or appropriate. These conditions shall be imposed in writing and shall continue in effect for the period prescribed by the Secretary.

(b) All licenses shall be issued to the license applicant.

Upon receipt of such license, a residential mortgage licensee shall be authorized to engage in the business regulated by this Act. Such license shall remain in full force and effect until it expires without renewal, is surrendered by the licensee or revoked or suspended as hereinafter provided.

(Source: P.A. 99-15, eff. 1-1-16; 100-1153, eff. 12-19-18.)

(205 ILCS 635/2-3) (from Ch. 17, par. 2322-3)

Sec. 2-3. Application form.

(a) Application for a residential mortgage license must be made in accordance with Section 2-6 and, if applicable, in accordance with requirements of the Nationwide Multistate Licensing System and Registry. The application shall be in writing, under oath, and on a form obtained from and prescribed by the Commissioner, or may be submitted electronically, with attestation, to the Nationwide Multistate Licensing System and Registry.

(b) The application shall contain the name and complete business and residential address or addresses of the license applicant. If the license applicant is a partnership, association, corporation or other form of business organization, the application shall contain the names and complete business and residential addresses of each member, director and principal officer thereof. Such application shall also include a description of the activities of the license applicant, in such detail and for such periods, as the Commissioner may require, including all of the following:

(1) An affirmation of financial solvency noting such capitalization requirements as may be required by the Commissioner, and access to such credit as may be required by the Commissioner.

(2) An affirmation that the license applicant or its members, directors or principals as may be appropriate, are at least 18 years of age.

(3) Information as to the character, fitness, financial and business responsibility, background, experience, and criminal record of any (i) person, entity, or ultimate equitable owner that owns or controls, directly or indirectly, 10% or more of any class of stock of the license applicant; (ii) person, entity, or ultimate equitable owner that is not a depository institution, as defined in Section 1007.50 of the Savings Bank Act, that lends, provides, or infuses, directly or indirectly, in any way, funds to or into a license applicant, in an amount equal to or more than 10% of the license applicant's net worth; (iii) person, entity, or ultimate equitable owner that controls, directly or indirectly, the election of 25% or more of the members of the board of directors of a license applicant; or (iv) person, entity, or ultimate equitable owner that the Commissioner finds influences management of the license applicant.

(4) Upon written request by the licensee and notwithstanding the provisions of paragraphs (1), (2), and (3) of this subsection, the Commissioner may permit the licensee to omit all or part of the information required by those paragraphs if, in lieu of the omitted information, the licensee submits an affidavit stating that the information submitted on the licensee's previous renewal application is still true and accurate. The Commissioner may promulgate rules prescribing the form and content of the affidavit that are necessary to accomplish the purposes of this Section.

(5) Such other information as required by regulations of the Commissioner.

(Source: P.A. 100-1153, eff. 12-19-18.)

(205 ILCS 635/2-3A)

Sec. 2-3A. Residential mortgage license application and issuance.

(a) Applicants for a license shall apply in a form prescribed by the Director. Each form shall contain content as set forth by rule, regulation, instruction, or procedure of the Director and may be changed or updated as necessary by the Director in order to carry out the purposes of this Act.

(b) In order to fulfill the purposes of this Act, the Director is authorized to establish relationships or contracts with the Nationwide Multistate Licensing System and Registry or other entities designated by the Nationwide Multistate Licensing System and Registry to collect and maintain records and process transaction fees or other fees related to licensees or other persons subject to this Act.

(c) In connection with an application for licensing, the applicant may be required, at a minimum, to furnish to the Nationwide Multistate Licensing System and Registry information concerning the applicant's identity, including:

(1) fingerprints for submission to the Federal Bureau of Investigation or any governmental agency or entity authorized to receive such information for a State, national, and international criminal history background check; and

(2) personal history and experience in a form prescribed by the Nationwide Multistate Licensing System and Registry, including the submission of authorization for the Nationwide Multistate Licensing System and Registry and the Director to obtain:

(A) an independent credit report obtained from a consumer reporting agency described in Section 603(p) of the Fair Credit Reporting Act (15 U.S.C. 1681a(p)); and

(B) information related to any administrative, civil, or criminal findings by any governmental jurisdiction.

(d) For the purposes of this Section, and in order to reduce the points of contact that the Federal Bureau of Investigation may have to maintain for purposes of subsection (c) of this Section, the Director may use the Nationwide Multistate Licensing System and Registry as a channeling agent for requesting information from and distributing information to the Department of Justice or any governmental agency.

(e) For the purposes of this Section, and in order to reduce the points of contact that the Director may have to maintain for purposes of item (2) of subsection (c) of this Section, the Director may use the Nationwide Multistate Licensing System and Registry as a channeling agent for requesting and distributing information to and from any source so directed by the Director.

(Source: P.A. 100-1153, eff. 12-19-18.)

(205 ILCS 635/2-4) (from Ch. 17, par. 2322-4)

Sec. 2-4. Prohibited acts and practices for licensees. It is a violation of this Act for a licensee subject to this Act to:

(a) fail to maintain at least one full service office within the State of Illinois if required to do so pursuant to Section 3-4 of this Act;

(b) fail to maintain staff reasonably adequate to meet the requirements of Section 3-4 of this Act;

(c) fail to keep and maintain for 36 months the same written records as required by the federal Equal Credit Opportunity Act, and any other information required by regulations of the Secretary regarding any home mortgage in the course of the conduct of its residential mortgage business;

(d) fail to file with the Secretary or Nationwide Multistate Licensing System and Registry as applicable, when due, any report or reports which it is required to file under any of the provisions of this Act;

(e) engage, whether as principal or agent, in the practice of rejecting residential mortgage applications without reasonable cause, or varying terms or application procedures without reasonable cause, for home mortgages on real estate within any specific geographic area from the terms or procedures generally provided by the licensee within other geographic areas of the State;

(f) engage in fraudulent home mortgage underwriting practices;

(g) make payment, whether directly or indirectly, of any kind to any in house or fee appraiser of any government or private money lending agency with which an application for a home mortgage has been filed for the purpose of influencing the independent judgment of the appraiser with respect to the value of any real estate which is to be covered by such home mortgage;

(h) fail to file tax returns (State and Federal) for the past 3 years or filed with the Secretary an accountant's or attorney's statement as to why no return was filed;

(i) engage in any discrimination or redlining activities prohibited by Section 3-8 of this Act;

(j) knowingly make any false promises likely to influence or persuade, or pursue a course of misrepresentation and false promises through agents, solicitors, advertising or otherwise;

(k) knowingly misrepresent, circumvent or conceal, through whatever subterfuge or device, any of the material particulars or the nature thereof, regarding a transaction to which it is a party to the injury of another party thereto;

(l) fail to disburse funds in accordance with its agreements;

(m) commit a crime against the law of this State, any other state or of the United States, involving moral turpitude, fraudulent or dishonest dealing, and that no final judgment has been entered against it in a civil action upon grounds of fraud, misrepresentation or deceit which has not been previously reported to the Secretary;

(n) fail to account or deliver to the owner upon request any personal property such as money, fund, deposit, check, draft, mortgage, other document or thing of value which it is not in law or equity entitled to retain under the circumstances;

(o) engage in any conduct which would be cause for denial of a license;

(p) become insolvent;

(q) submit an application for a license under this Act which contains a material misstatement;

(r) demonstrate by course of conduct, negligence or incompetence in performing any act for which it is required to hold a license under this Act;

(s) fail to advise the Secretary in writing, or the Nationwide Multistate Licensing System and Registry, as applicable, of any changes to the information submitted on the most recent application for license or averments of record within 30 days of said change. The written notice must be signed in the same form as the application for license being amended;

(t) fail to comply with the provisions of this Act, or with any lawful order, rule or regulation made or issued under the provisions of this Act;

(u) fail to submit to periodic examination by the Secretary as required by this Act;

(v) fail to advise the Secretary in writing of judgments entered against, and bankruptcy petitions by, the license applicant within 5 days of occurrence;

(w) fail to advise the Secretary in writing within 30 days of any request made to a licensee under this Act to repurchase a loan in a manner that completely and clearly identifies to whom the request was made, the loans involved, and the reason therefor;

(x) fail to advise the Secretary in writing within 30 days of any request from any entity to repurchase a loan in a manner that completely and clearly identifies to whom the request was made, the loans involved, and the reason for the request;

(y) fail to at all times act in a manner consistent with subsections (a) and (b) of Section 1-2 of this Act;

(z) knowingly hire or employ a mortgage loan originator who is not licensed with the Secretary as required under Section 7-1A of this Act;

(aa) charge or collect advance payments from borrowers or homeowners for engaging in loan modification; or

(bb) structure activities or contracts to evade provisions of this Act.

A licensee who fails to comply with this Section or otherwise violates any of the provisions of this Section shall be subject to the penalties in Section 4-5 of this Act.

(Source: P.A. 100-1153, eff. 12-19-18.)

(205 ILCS 635/2-5) (from Ch. 17, par. 2322-5)

Sec. 2-5. Refusal to Issue License. The Commissioner shall refuse to license or renew a license if:

(1) it is determined that the applicant is not in compliance with any provisions of the Act; or

(2) there is substantial continuity between the applicant and any violator of this Act; or

(3) the Commissioner cannot make the findings specified in Section 2-2, subsection (a), of this Act.

(Source: P.A. 86-137; 87-642.)

(205 ILCS 635/2-6)

Sec. 2-6. License issuance and renewal; fee.

(a) Licenses shall be renewed every year using the common renewal date of the Nationwide Multistate Licensing System and Registry as adopted by the Director. Properly completed renewal application forms and filing fees may be received by the Secretary 60 days prior to the license expiration date, but, to be deemed timely, the completed renewal application forms and filing fees must be received by the Secretary no later than 30 days prior to the license expiration date.

(b) It shall be the responsibility of each licensee to accomplish renewal of its license. Failure by a licensee to submit a properly completed renewal application form and fees in a timely fashion, absent a written extension from the Secretary, will result in the license becoming inactive.

(c) No activity regulated by this Act shall be conducted by the licensee when a license becomes inactive. The Commissioner may require the licensee to provide a plan for the disposition of any residential mortgage loans not closed or funded when the license becomes inactive. The Commissioner may allow a licensee with an inactive license to conduct activities regulated by this Act for the sole purpose of assisting borrowers in the closing or funding of loans for which the loan application was taken from a borrower while the license was active. An inactive license may be reactivated by the Commissioner upon payment of the renewal fee, and payment of a reactivation fee equal to the renewal fee.

(d) (Blank).

(e) A licensee ceasing an activity or activities regulated by this Act and desiring to no longer be licensed shall so inform the Commissioner in writing and, at the same time, convey any license issued and all other symbols or indicia of licensure. The licensee shall include a plan for the withdrawal from regulated business, including a timetable for the disposition of the business, and comply with the surrender guidelines or requirements of the Director. Upon receipt of such written notice, the Commissioner shall post the cancellation or issue a certified statement canceling the license.

(Source: P.A. 99-15, eff. 1-1-16; 100-1153, eff. 12-19-18.)

(205 ILCS 635/2-7) (from Ch. 17, par. 2322-7)

Sec. 2-7. Waiver of licensing fee. The Commissioner may waive the licensing fee upon receipt of:

(a) an application for a residential mortgage license in Illinois,

(b) an addendum requesting waiver of the fee stating the grounds in support of such waiver, including but not limited to, not for profit status, bankruptcy or the showing of undue hardship, and

(c) in case of an out-of-state servicer of loans in Illinois, the following documentation is required:

(1) A verification that the firm services only 100 or fewer loans secured by residential real estate situated in Illinois;

(2) An agreement not to originate, purchase or acquire additional servicing of loans secured by residential real estate situated in Illinois;

(3) An agreement to maintain a dedicated toll free (800) number for exclusive use by the licensee's Illinois customers;

(4) An agreement to provide a written notice at least annually to the licensee's Illinois customers advising them of the dedicated toll free (800) number; and to furnish the Commissioner with a copy of such written notice.

A request for waiver of the filing fee must be submitted each year in conjunction with the license renewal procedure.

(Source: P.A. 90-301, eff. 8-1-97.)

(205 ILCS 635/2-8) (from Ch. 17, par. 2322-8)

Sec. 2-8. Additional Full-service Offices.

(a) A licensee may apply for authority to open and maintain additional full-service offices by:

(1) Giving the Commissioner prior notice of its intention in such form as shall be prescribed by the Commissioner.

(2) Payment of a fee to be established by regulation.

(b) Upon receipt of the notice and fee required in subsection (a) above, the Commissioner shall issue a certificate for the additional full-service office.

(c) The certificate shall be conspicuously posted in the respective additional full-service offices.

(Source: P.A. 85-735.)

(205 ILCS 635/2-9) (from Ch. 17, par. 2322-9)

Sec. 2-9. Posting of license. The license of a licensee whose home office is within the State of Illinois or of an out-of-state licensee shall be conspicuously posted in every office of the licensee located in Illinois. Out-of-state licensees without an Illinois office shall produce the license upon request. Licensees originating loans on the Internet shall post on their Internet web site their license number and the address and telephone number of the Commissioner. The license shall state the full name and address of the licensee. The license shall not be transferable or assignable. A separate certificate shall be issued for posting in each full service Illinois office.

(Source: P.A. 91-586, eff. 8-14-99.)

(205 ILCS 635/2-11) (from Ch. 17, par. 2322-11)

Sec. 2-11. Miscellaneous fees. In addition to any license fee collected under this Act, the Commissioner shall by rule and regulation establish a schedule to apply to assessment and collection of necessary contingent and miscellaneous fees.

(Source: P.A. 85-735.)