(205 ILCS 635/1-4)
The following words and phrases have the meanings given to them in this Section:
(a) "Residential real property" or "residential real
estate" shall mean any real property located in Illinois, upon which is constructed or intended to be constructed a dwelling. Those terms include a manufactured home as defined in subdivision (53) of Section 9-102 of the Uniform Commercial Code which is real property as defined in Section 5-35 of the Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act.
(b) "Making a residential mortgage loan" or "funding
a residential mortgage loan" shall mean for compensation or gain, either directly or indirectly, advancing funds or making a commitment to advance funds to a loan applicant for a residential mortgage loan.
(c) "Soliciting, processing, placing, or negotiating
a residential mortgage loan" shall mean for compensation or gain, either directly or indirectly, accepting or offering to accept an application for a residential mortgage loan, assisting or offering to assist in the processing of an application for a residential mortgage loan on behalf of a borrower, or negotiating or offering to negotiate the terms or conditions of a residential mortgage loan with a lender on behalf of a borrower including, but not limited to, the submission of credit packages for the approval of lenders, the preparation of residential mortgage loan closing documents, including a closing in the name of a broker.
(d) "Exempt person or entity" shall mean the
(1) (i) Any banking organization or foreign
banking corporation licensed by the Illinois Commissioner of Banks and Real Estate or the United States Comptroller of the Currency to transact business in this State; (ii) any national bank, federally chartered savings and loan association, federal savings bank, federal credit union; (iii) (blank); (iv) any bank, savings and loan association, savings bank, or credit union organized under the laws of this or any other state; (v) any Illinois Consumer Installment Loan Act licensee; (vi) any insurance company authorized to transact business in this State; (vii) any entity engaged solely in commercial mortgage lending; (viii) any service corporation of a savings and loan association or savings bank organized under the laws of this State or the service corporation of a federally chartered savings and loan association or savings bank having its principal place of business in this State, other than a service corporation licensed or entitled to reciprocity under the Real Estate License Act of 2000; or (ix) any first tier subsidiary of a bank, the charter of which is issued under the Illinois Banking Act by the Illinois Commissioner of Banks and Real Estate, or the first tier subsidiary of a bank chartered by the United States Comptroller of the Currency and that has its principal place of business in this State, provided that the first tier subsidiary is regularly examined by the Illinois Commissioner of Banks and Real Estate or the Comptroller of the Currency, or a consumer compliance examination is regularly conducted by the Federal Reserve Board.
(1.5) Any employee of a person or entity
mentioned in item (1) of this subsection, when acting for such person or entity, or any registered mortgage loan originator when acting for an entity described in subsection (tt) of this Section.
(1.8) Any person or entity that does not
originate mortgage loans in the ordinary course of business, but makes or acquires residential mortgage loans with his or her own funds for his or her or its own investment without intent to make, acquire, or resell more than 3 residential mortgage loans in any one calendar year.
(2.1) A bona fide nonprofit organization.
(2.2) An employee of a bona fide nonprofit
organization when acting on behalf of that organization.
(3) Any person employed by a licensee to assist
in the performance of the residential mortgage licensee's activities regulated by this Act who is compensated in any manner by only one licensee.
(5) Any individual, corporation, partnership, or
other entity that originates, services, or brokers residential mortgage loans, as these activities are defined in this Act, and who or which receives no compensation for those activities, subject to the Commissioner's regulations and the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 and the rules promulgated under that Act with regard to the nature and amount of compensation.
(7) Any entity engaged solely in providing loan
processing services through the sponsoring of individuals acting pursuant to subsection (d) of Section 7-1A of this Act.
(e) "Licensee" or "residential mortgage licensee"
shall mean a person, partnership, association, corporation, or any other entity who or which is licensed pursuant to this Act to engage in the activities regulated by this Act.
(f) "Mortgage loan" "residential mortgage loan" or
"home mortgage loan" shall mean any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling as defined in Section 103(v) of the federal Truth in Lending Act, or residential real estate upon which is constructed or intended to be constructed a dwelling.
(g) "Lender" shall mean any person, partnership,
association, corporation, or any other entity who either lends or invests money in residential mortgage loans.
(h) "Ultimate equitable owner" shall mean a person
who, directly or indirectly, owns or controls an ownership interest in a corporation, foreign corporation, alien business organization, trust, or any other form of business organization regardless of whether the person owns or controls the ownership interest through one or more persons or one or more proxies, powers of attorney, nominees, corporations, associations, partnerships, trusts, joint stock companies, or other entities or devices, or any combination thereof.
(i) "Residential mortgage financing transaction"
shall mean the negotiation, acquisition, sale, or arrangement for or the offer to negotiate, acquire, sell, or arrange for, a residential mortgage loan or residential mortgage loan commitment.
(j) "Personal residence address" shall mean a street
address and shall not include a post office box number.
(k) "Residential mortgage loan commitment" shall mean
a contract for residential mortgage loan financing.
(l) "Party to a residential mortgage financing
transaction" shall mean a borrower, lender, or loan broker in a residential mortgage financing transaction.
(m) "Payments" shall mean payment of all or any of
the following: principal, interest and escrow reserves for taxes, insurance and other related reserves, and reimbursement for lender advances.
(n) "Commissioner" shall mean the Commissioner of
Banks and Real Estate, except that, beginning on April 6, 2009 (the effective date of Public Act 95-1047), all references in this Act to the Commissioner of Banks and Real Estate are deemed, in appropriate contexts, to be references to the Secretary of Financial and Professional Regulation, or his or her designee, including the Director of the Division of Banking of the Department of Financial and Professional Regulation.
(n-1) "Director" shall mean the Director of the
Division of Banking of the Department of Financial and Professional Regulation, except that, beginning on July 31, 2009 (the effective date of Public Act 96-112), all references in this Act to the Director are deemed, in appropriate contexts, to be the Secretary of Financial and Professional Regulation, or his or her designee, including the Director of the Division of Banking of the Department of Financial and Professional Regulation.
(o) "Loan brokering", "brokering", or "brokerage
service" shall mean the act of helping to obtain from another entity, for a borrower, a loan secured by residential real estate situated in Illinois or assisting a borrower in obtaining a loan secured by residential real estate situated in Illinois in return for consideration to be paid by either the borrower or the lender including, but not limited to, contracting for the delivery of residential mortgage loans to a third party lender and soliciting, processing, placing, or negotiating residential mortgage loans.
(p) "Loan broker" or "broker" shall mean a person,
partnership, association, corporation, or limited liability company, other than those persons, partnerships, associations, corporations, or limited liability companies exempted from licensing pursuant to Section 1-4, subsection (d), of this Act, who performs the activities described in subsections (c), (o), and (yy) of this Section.
(q) "Servicing" shall mean the collection or
remittance for or the right or obligation to collect or remit for any lender, noteowner, noteholder, or for a licensee's own account, of payments, interests, principal, and trust items such as hazard insurance and taxes on a residential mortgage loan in accordance with the terms of the residential mortgage loan; and includes loan payment follow-up, delinquency loan follow-up, loan analysis and any notifications to the borrower that are necessary to enable the borrower to keep the loan current and in good standing. "Servicing" includes management of third-party entities acting on behalf of a residential mortgage licensee for the collection of delinquent payments and the use by such third-party entities of said licensee's servicing records or information, including their use in foreclosure.
(r) "Full service office" shall mean an office,
provided by the licensee and not subleased from the licensee's employees, and staff in Illinois reasonably adequate to handle efficiently communications, questions, and other matters relating to any application for, or an existing home mortgage secured by residential real estate situated in Illinois with respect to which the licensee is brokering, funding originating, purchasing, or servicing. The management and operation of each full service office must include observance of good business practices such as proper signage; adequate, organized, and accurate books and records; ample phone lines, hours of business, staff training and supervision, and provision for a mechanism to resolve consumer inquiries, complaints, and problems. The Commissioner shall issue regulations with regard to these requirements and shall include an evaluation of compliance with this Section in his or her periodic examination of each licensee.
(s) "Purchasing" shall mean the purchase of
conventional or government-insured mortgage loans secured by residential real estate situated in Illinois from either the lender or from the secondary market.
(t) "Borrower" shall mean the person or persons who
seek the services of a loan broker, originator, or lender.
(u) "Originating" shall mean the issuing of
commitments for and funding of residential mortgage loans.
(v) "Loan brokerage agreement" shall mean a written
agreement in which a broker or loan broker agrees to do either of the following:
(1) obtain a residential mortgage loan for the
borrower or assist the borrower in obtaining a residential mortgage loan; or
(2) consider making a residential mortgage loan
(w) "Advertisement" shall mean the attempt by
publication, dissemination, or circulation to induce, directly or indirectly, any person to enter into a residential mortgage loan agreement or residential mortgage loan brokerage agreement relative to a mortgage secured by residential real estate situated in Illinois.
(y) "Government-insured mortgage loan" shall mean any
mortgage loan made on the security of residential real estate insured by the Department of Housing and Urban Development or Farmers Home Loan Administration, or guaranteed by the Veterans Administration.
(z) "Annual audit" shall mean a certified audit of
the licensee's books and records and systems of internal control performed by a certified public accountant in accordance with generally accepted accounting principles and generally accepted auditing standards.
(aa) "Financial institution" shall mean a savings and
loan association, savings bank, credit union, or a bank organized under the laws of Illinois or a savings and loan association, savings bank, credit union or a bank organized under the laws of the United States and headquartered in Illinois.
(bb) "Escrow agent" shall mean a third party,
individual or entity charged with the fiduciary obligation for holding escrow funds on a residential mortgage loan pending final payout of those funds in accordance with the terms of the residential mortgage loan.
(cc) "Net worth" shall have the meaning ascribed
thereto in Section 3-5 of this Act.
(dd) "Affiliate" shall mean:
(1) any entity that directly controls or is
controlled by the licensee and any other company that is directly affecting activities regulated by this Act that is controlled by the company that controls the licensee;
(2) any entity:
(A) that is controlled, directly or
indirectly, by a trust or otherwise, by or for the benefit of shareholders who beneficially or otherwise control, directly or indirectly, by trust or otherwise, the licensee or any company that controls the licensee; or
(B) a majority of the directors or trustees
of which constitute a majority of the persons holding any such office with the licensee or any company that controls the licensee;
(3) any company, including a real estate
investment trust, that is sponsored and advised on a contractual basis by the licensee or any subsidiary or affiliate of the licensee.
(ee) "First tier subsidiary" shall be defined by
regulation incorporating the comparable definitions used by the Office of the Comptroller of the Currency and the Illinois Commissioner of Banks and Real Estate.
(ff) "Gross delinquency rate" means the quotient
determined by dividing (1) the sum of (i) the number of government-insured residential mortgage loans funded or purchased by a licensee in the preceding calendar year that are delinquent and (ii) the number of conventional residential mortgage loans funded or purchased by the licensee in the preceding calendar year that are delinquent by (2) the sum of (i) the number of government-insured residential mortgage loans funded or purchased by the licensee in the preceding calendar year and (ii) the number of conventional residential mortgage loans funded or purchased by the licensee in the preceding calendar year.
(gg) "Delinquency rate factor" means the factor set
by rule of the Commissioner that is multiplied by the average gross delinquency rate of licensees, determined annually for the immediately preceding calendar year, for the purpose of determining which licensees shall be examined by the Commissioner pursuant to subsection (b) of Section 4-8 of this Act.
(ii) "Confidential supervisory information" means any
report of examination, visitation, or investigation prepared by the Commissioner under this Act, any report of examination visitation, or investigation prepared by the state regulatory authority of another state that examines a licensee, any document or record prepared or obtained in connection with or relating to any examination, visitation, or investigation, and any record prepared or obtained by the Commissioner to the extent that the record summarizes or contains information derived from any report, document, or record described in this subsection. "Confidential supervisory information" does not include any information or record routinely prepared by a licensee and maintained in the ordinary course of business or any information or record that is required to be made publicly available pursuant to State or federal law or rule.
(jj) "Mortgage loan originator" means an individual
who for compensation or gain or in the expectation of compensation or gain:
(i) takes a residential mortgage loan
(ii) offers or negotiates terms of a residential
"Mortgage loan originator" includes an individual
engaged in loan modification activities as defined in subsection (yy) of this Section. A mortgage loan originator engaged in loan modification activities shall report those activities to the Department of Financial and Professional Regulation in the manner provided by the Department; however, the Department shall not impose a fee for reporting, nor require any additional qualifications to engage in those activities beyond those provided pursuant to this Act for mortgage loan originators.
"Mortgage loan originator" does not include an
individual engaged solely as a loan processor or underwriter except as otherwise provided in subsection (d) of Section 7-1A of this Act.
"Mortgage loan originator" does not include a person
or entity that only performs real estate brokerage activities and is licensed in accordance with the Real Estate License Act of 2000, unless the person or entity is compensated by a lender, a mortgage broker, or other mortgage loan originator, or by any agent of that lender, mortgage broker, or other mortgage loan originator.
"Mortgage loan originator" does not include a person
or entity solely involved in extensions of credit relating to timeshare plans, as that term is defined in Section 101(53D) of Title 11, United States Code.
(kk) "Depository institution" has the same meaning as
in Section 3 of the Federal Deposit Insurance Act, and includes any credit union.
(ll) "Dwelling" means a residential structure or
mobile home which contains one to 4 family housing units, or individual units of condominiums or cooperatives.
(mm) "Immediate family member" means a spouse, child,
sibling, parent, grandparent, or grandchild, and includes step-parents, step-children, step-siblings, or adoptive relationships.
(nn) "Individual" means a natural person.
(oo) "Loan processor or underwriter" means an
individual who performs clerical or support duties as an employee at the direction of and subject to the supervision and instruction of a person licensed, or exempt from licensing, under this Act. "Clerical or support duties" includes subsequent to the receipt of an application:
(i) the receipt, collection, distribution, and
analysis of information common for the processing or underwriting of a residential mortgage loan; and
(ii) communicating with a consumer to obtain the
information necessary for the processing or underwriting of a loan, to the extent that the communication does not include offering or negotiating loan rates or terms, or counseling consumers about residential mortgage loan rates or terms. An individual engaging solely in loan processor or underwriter activities shall not represent to the public, through advertising or other means of communicating or providing information, including the use of business cards, stationery, brochures, signs, rate lists, or other promotional items, that the individual can or will perform any of the activities of a mortgage loan originator.
(pp) "Nationwide Multistate Licensing System and
Registry" means a mortgage licensing system developed and maintained by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators for the licensing and registration of licensed mortgage loan originators.
(qq) "Nontraditional mortgage product" means any
mortgage product other than a 30-year fixed rate mortgage.
(rr) "Person" means a natural person, corporation,
company, limited liability company, partnership, or association.
(ss) "Real estate brokerage activity" means any
activity that involves offering or providing real estate brokerage services to the public, including:
(1) acting as a real estate agent or real estate
broker for a buyer, seller, lessor, or lessee of real property;
(2) bringing together parties interested in the
sale, purchase, lease, rental, or exchange of real property;
(3) negotiating, on behalf of any party, any
portion of a contract relating to the sale, purchase, lease, rental, or exchange of real property, other than in connection with providing financing with respect to any such transaction;
(4) engaging in any activity for which a person
engaged in the activity is required to be registered or licensed as a real estate agent or real estate broker under any applicable law; or
(5) offering to engage in any activity, or act in
any capacity, described in this subsection (ss).
(tt) "Registered mortgage loan originator" means any
(1) meets the definition of mortgage loan
originator and is an employee of:
(A) a depository institution;
(B) a subsidiary that is:
(i) owned and controlled by a depository
(ii) regulated by a federal banking
(C) an institution regulated by the Farm
Credit Administration; and
(2) is registered with, and maintains a unique
identifier through, the Nationwide Multistate Licensing System and Registry.
(uu) "Unique identifier" means a number or other
identifier assigned by protocols established by the Nationwide Multistate Licensing System and Registry.
(vv) "Residential mortgage license" means a license
issued pursuant to Section 1-3, 2-2, or 2-6 of this Act.
(ww) "Mortgage loan originator license" means a
license issued pursuant to Section 7-1A, 7-3, or 7-6 of this Act.
(xx) "Secretary" means the Secretary of the
Department of Financial and Professional Regulation, or a person authorized by the Secretary or by this Act to act in the Secretary's stead.
(yy) "Loan modification" means, for compensation or
gain, either directly or indirectly offering or negotiating on behalf of a borrower or homeowner to adjust the terms of a residential mortgage loan in a manner not provided for in the original or previously modified mortgage loan.
(zz) "Short sale facilitation" means, for
compensation or gain, either directly or indirectly offering or negotiating on behalf of a borrower or homeowner to facilitate the sale of residential real estate subject to one or more residential mortgage loans or debts constituting liens on the property in which the proceeds from selling the residential real estate will fall short of the amount owed and the lien holders are contacted to agree to release their lien on the residential real estate and accept less than the full amount owed on the debt.
(aaa) "Bona fide nonprofit organization" means an
organization that is described in Section 501(c)(3) of the Internal Revenue Code, is exempt from federal income tax under Section 501(a) of the Internal Revenue Code, does not operate in a commercial context, and does all of the following:
(1) Promotes affordable housing or provides
home ownership education or similar services.
(2) Conducts its activities in a manner that
serves public or charitable purposes.
(3) Receives funding and revenue and charges
fees in a manner that does not create an incentive for itself or its employees to act other than in the best interests of its clients.
(4) Compensates its employees in a manner that
does not create an incentive for its employees to act other than in the best interests of its clients.
(5) Provides to, or identifies for, the
borrower residential mortgage loans with terms favorable to the borrower and comparable to residential mortgage loans and housing assistance provided under government housing assistance programs.
The Commissioner may define by rule and regulation any terms used
in this Act for the efficient and clear administration of this Act.
(Source: P.A. 100-783, eff. 8-10-18; 100-851, eff. 8-14-18; 100-1153, eff. 12-19-18; 101-81, eff. 7-12-19.)
(205 ILCS 635/2-4)
(from Ch. 17, par. 2322-4)
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
(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
(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
(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
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 635/4-1)
(from Ch. 17, par. 2324-1)
Commissioner of Banks and Real Estate; functions, powers, and duties.
powers, and duties of the Commissioner of Banks and Real Estate shall include the following:
(a) to issue or refuse to issue any license as
(b) to revoke or suspend for cause any license issued
(c) to keep records of all licenses issued under this
(d) to receive, consider, investigate, and act upon
complaints made by any person in connection with any residential mortgage licensee in this State;
(f) to prescribe the forms of and receive:
(1) applications for licenses; and
(2) all reports and all books and records
required to be made by any licensee under this Act, including annual audited financial statements and annual reports of mortgage activity;
(g) to adopt rules and regulations necessary and
proper for the administration of this Act;
(h) to subpoena documents and witnesses and compel
their attendance and production, to administer oaths, and to require the production of any books, papers, or other materials relevant to any inquiry authorized by this Act;
(h-1) to issue orders against any person, if the
Commissioner has reasonable cause to believe that an unsafe, unsound, or unlawful practice has occurred, is occurring, or is about to occur, if any person has violated, is violating, or is about to violate any law, rule, or written agreement with the Commissioner, or for the purpose of administering the provisions of this Act and any rule adopted in accordance with the Act;
(h-2) to address any inquiries to any licensee, or
the officers thereof, in relation to its activities and conditions, or any other matter connected with its affairs, and it shall be the duty of any licensee or person so addressed, to promptly reply in writing to such inquiries. The Commissioner may also require reports from any licensee at any time the Commissioner may deem desirable;
(i) to require information with regard to any license
applicant as he or she may deem desirable, with due regard to the paramount interests of the public as to the experience, background, honesty, truthfulness, integrity, and competency of the license applicant as to financial transactions involving primary or subordinate mortgage financing, and where the license applicant is an entity other than an individual, as to the honesty, truthfulness, integrity, and competency of any officer or director of the corporation, association, or other entity, or the members of a partnership;
(j) to examine the books and records of every
licensee under this Act at intervals as specified in Section 4-2;
(k) to enforce provisions of this Act;
(l) to levy fees, fines, and charges for services
performed in administering this Act; the aggregate of all fees collected by the Commissioner on and after the effective date of this Act shall be paid promptly after receipt of the same, accompanied by a detailed statement thereof, into the Residential Finance Regulatory Fund under Section 4-1.5 of this Act; the amounts deposited into that Fund shall be used for the ordinary and contingent expenses of the Office of Banks and Real Estate. Nothing in this Act shall prevent continuing the practice of paying expenses involving salaries, retirement, social security, and State-paid insurance of State officers by appropriation from the General Revenue Fund.
(m) to appoint examiners, supervisors, experts, and
special assistants as needed to effectively and efficiently administer this Act;
(n) to conduct hearings for the purpose of:
(1) appeals of orders of the Commissioner;
(2) suspensions or revocations of licenses, or
(i) complaints against licensees; or
(ii) annual gross delinquency rates; and
(4) carrying out the purposes of this Act;
(o) to exercise exclusive visitorial power over a
licensee unless otherwise authorized by this Act or as vested in the courts, or upon prior consultation with the Commissioner, a foreign residential mortgage regulator with an appropriate supervisory interest in the parent or affiliate of a licensee;
(p) to enter into cooperative agreements with state
regulatory authorities of other states to provide for examination of corporate offices or branches of those states and to accept reports of such examinations;
(q) to assign an examiner or examiners to monitor the
affairs of a licensee with whatever frequency the Commissioner determines appropriate and to charge the licensee for reasonable and necessary expenses of the Commissioner, if in the opinion of the Commissioner an emergency exists or appears likely to occur;
(r) to impose civil penalties of up to $50 per day
against a licensee for failing to respond to a regulatory request or reporting requirement; and
(s) to enter into agreements in connection with the
Nationwide Multistate Licensing System and Registry.
(Source: P.A. 100-783, eff. 8-10-18; 100-1153, eff. 12-19-18; 101-81, eff. 7-12-19.)
(205 ILCS 635/4-5)
(from Ch. 17, par. 2324-5)
Suspension, revocation of licenses; fines.
(a) Upon written notice to a licensee, the Commissioner may suspend
or revoke any license issued pursuant to this Act if he or she shall make a
finding of one or more of the following in the notice that:
(1) Through separate acts or an act or a course of
conduct, the licensee has violated any provisions of this Act, any rule or regulation promulgated by the Commissioner or of any other law, rule or regulation of this State or the United States.
(2) Any fact or condition exists which, if it had
existed at the time of the original application for such license would have warranted the Commissioner in refusing originally to issue such license.
(3) If a licensee is other than an individual, any
ultimate equitable owner, officer, director, or member of the licensed partnership, association, corporation, or other entity has so acted or failed to act as would be cause for suspending or revoking a license to that party as an individual.
(b) No license shall be suspended or revoked, except as provided in this
Section, nor shall any licensee be fined without notice of his or her right
to a hearing as provided in Section 4-12 of this Act.
(c) The Commissioner, on good cause shown that an emergency exists, may
suspend any license for a period not
exceeding 180 days, pending investigation. Upon a showing that a
licensee has failed to meet the experience or educational requirements of
Section 2-2 or the requirements of subsection (g) of Section 3-2, the
Commissioner shall suspend, prior to hearing as provided in Section 4-12, the
license until those requirements have been met.
(d) The provisions of subsection (e) of Section 2-6 of this Act
shall not affect a licensee's civil or criminal liability
for acts committed prior to surrender of a license.
(e) No revocation, suspension or surrender of any license shall impair
or affect the obligation of any pre-existing lawful contract between the
licensee and any person.
(f) Every license issued under this Act shall remain in force and effect
until the same shall have expired without renewal, have been surrendered,
revoked or suspended in accordance with the provisions of this Act, but the
Commissioner shall have authority to reinstate a suspended license or to
issue a new license to a licensee whose license shall have been revoked if
no fact or condition then exists which would have warranted the
Commissioner in refusing originally to issue such license under this Act.
(g) Whenever the Commissioner shall revoke or suspend a license issued
pursuant to this Act or fine a licensee under this Act, he or she shall
forthwith execute a written order to that effect. The
Commissioner shall post notice of the order on an agency Internet site maintained by the Commissioner or on the Nationwide Multistate Licensing System and Registry and shall forthwith serve a copy of such order upon the
licensee. Any such order may be reviewed in the manner provided by
Section 4-12 of this Act.
(h) When the Commissioner finds any person in violation of the grounds
set forth in subsection (i), he or she may enter an order imposing one or
more of the following penalties:
(1) Revocation of license;
(2) Suspension of a license subject to reinstatement
upon satisfying all reasonable conditions the Commissioner may specify;
(3) Placement of the licensee or applicant on
probation for a period of time and subject to all reasonable conditions as the Commissioner may specify;
(4) Issuance of a reprimand;
(5) Imposition of a fine not to exceed $25,000 for
each count of separate offense, provided that a fine may be imposed not to exceed $75,000 for each separate count of offense of paragraph (2) of subsection (i) of this Section; and
(6) Denial of a license.
(i) The following acts shall constitute grounds for which the
disciplinary actions specified in subsection (h) above may be taken:
(1) Being convicted or found guilty, regardless of
pendency of an appeal, of a crime in any jurisdiction which involves fraud, dishonest dealing, or any other act of moral turpitude;
(2) Fraud, misrepresentation, deceit or negligence in
any mortgage financing transaction;
(3) A material or intentional misstatement of fact on
an initial or renewal application;
(4) Failure to follow the Commissioner's regulations
with respect to placement of funds in escrow accounts;
(5) Insolvency or filing under any provision of the
Bankruptcy Code as a debtor;
(6) Failure to account or deliver to any person any
property such as any money, fund, deposit, check, draft, mortgage, or other document or thing of value, which has come into his or her hands and which is not his or her property or which he or she is not in law or equity entitled to retain, under the circumstances and at the time which has been agreed upon or is required by law or, in the absence of a fixed time, upon demand of the person entitled to such accounting and delivery;
(7) Failure to disburse funds in accordance with
(8) Any misuse, misapplication, or misappropriation
of trust funds or escrow funds;
(9) Having a license, or the equivalent, to practice
any profession or occupation revoked, suspended, or otherwise acted against, including the denial of licensure by a licensing authority of this State or another state, territory or country for fraud, dishonest dealing or any other act of moral turpitude;
(10) Failure to issue a satisfaction of mortgage when
the residential mortgage has been executed and proceeds were not disbursed to the benefit of the mortgagor and when the mortgagor has fully paid licensee's costs and commission;
(11) Failure to comply with any order of the
Commissioner or rule made or issued under the provisions of this Act;
(12) Engaging in activities regulated by this Act
without a current, active license unless specifically exempted by this Act;
(13) Failure to pay in a timely manner any fee,
charge or fine under this Act;
(14) Failure to maintain, preserve, and keep
available for examination, all books, accounts or other documents required by the provisions of this Act and the rules of the Commissioner;
(15) Refusing, obstructing, evading, or unreasonably
delaying an investigation, information request, or examination authorized under this Act, or refusing, obstructing, evading, or unreasonably delaying compliance with the Director's subpoena or subpoena duces tecum;
(16) A pattern of substantially underestimating the
(17) Failure to comply with or violation of any
(18) Failure to comply with or violation of any
provision of Article 3 of the Residential Real Property Disclosure Act.
(j) A licensee shall be subject to the disciplinary actions specified in
this Act for violations of subsection (i) by any officer, director,
shareholder, joint venture, partner, ultimate equitable owner, or employee
of the licensee.
(k) Such licensee shall be subject to suspension or revocation for
unauthorized employee actions only if there is a pattern of repeated violations by
employees or the licensee has knowledge of the violations, or there is substantial harm to a consumer.
(l) Procedure for surrender of license:
(1) The Commissioner may, after 10 days notice by
certified mail to the licensee at the address set forth on the license, stating the contemplated action and in general the grounds therefor and the date, time and place of a hearing thereon, and after providing the licensee with a reasonable opportunity to be heard prior to such action, fine such licensee an amount not exceeding $25,000 per violation, or revoke or suspend any license issued hereunder if he or she finds that:
(i) The licensee has failed to comply with any
provision of this Act or any order, decision, finding, rule, regulation or direction of the Commissioner lawfully made pursuant to the authority of this Act; or
(ii) Any fact or condition exists which, if it
had existed at the time of the original application for the license, clearly would have warranted the Commissioner in refusing to issue the license.
(2) Any licensee may submit application to surrender
a license, but upon the Director approving the surrender, it shall not affect the licensee's civil or criminal liability for acts committed prior to surrender or entitle the licensee to a return of any part of the license fee.
(Source: P.A. 99-15, eff. 1-1-16; 100-1153, eff. 12-19-18.)
(205 ILCS 635/4-7)
Additional investigation and examination authority.
In addition to any authority allowed under this Act, the Director shall have the authority to conduct investigations and examinations as follows:
(a) For purposes of initial licensing, license renewal, license suspension, license conditioning, license revocation or termination, or general or specific inquiry or investigation to determine compliance with this Act, the Commissioner shall have the authority to access, receive, and use any books, accounts, records, files, documents, information, or evidence including, but not limited to, the following:
(1) criminal, civil, and administrative history
information, including nonconviction data as specified in the Criminal Code of 2012;
(2) personal history and experience information,
including independent credit reports obtained from a consumer reporting agency described in Section 603(p) of the federal Fair Credit Reporting Act; and
(3) any other documents, information, or evidence
the Commissioner deems relevant to the inquiry or investigation regardless of the location, possession, control, or custody of the documents, information, or evidence.
(b) For the purposes of investigating violations or complaints arising under this Act, or for the purposes of examination, the Commissioner may review, investigate, or examine any licensee, individual, or person subject to this Act, as often as necessary in order to carry out the purposes of this Act. The Commissioner may direct, subpoena, or order the attendance of and examine under oath all persons whose testimony may be required about the loans or the business or subject matter of any such examination or investigation, and may direct, subpoena, or order the person to produce books, accounts, records, files, and any other documents the Commissioner deems relevant to the inquiry.
(c) Each licensee, individual, or person subject to this Act shall make available to the Commissioner upon request the books and records relating to the operations of such licensee, individual, or person subject to this Act. The Commissioner shall have access to such books and records and interview the officers, principals, mortgage loan originators, employees, independent contractors, agents, and customers of the licensee, individual, or person subject to this Act concerning their business.
(d) Each licensee, individual, or person subject to this Act shall make or compile reports or prepare other information as directed by the Commissioner in order to carry out the purposes of this Section including, but not limited to:
(1) accounting compilations;
(2) information lists and data concerning loan
transactions in a format prescribed by the Commissioner; or
(3) other information deemed necessary to carry out
the purposes of this Section.
(e) In making any examination or investigation authorized by this Act, the Commissioner may control access to any documents and records of the licensee or person under examination or investigation. The Commissioner may take possession of the documents and records or place a person in exclusive charge of the documents and records in the place where they are usually kept. During the period of control, no individual or person shall remove or attempt to remove any of the documents and records except pursuant to a court order or with the consent of the Commissioner. Unless the Commissioner has reasonable grounds to believe the documents or records of the licensee have been, or are at risk of being altered or destroyed for purposes of concealing a violation of this Act, the licensee or owner of the documents and records shall have access to the documents or records as necessary to conduct its ordinary business affairs.
(f) In order to carry out the purposes of this Section, the Commissioner may:
(1) retain attorneys, accountants, or other
professionals and specialists as examiners, auditors, or investigators to conduct or assist in the conduct of examinations or investigations;
(2) enter into agreements or relationships with
other government officials or regulatory associations in order to improve efficiencies and reduce regulatory burden by sharing resources, standardized or uniform methods or procedures, and documents, records, information or evidence obtained under this Section;
(3) use, hire, contract, or employ public or
privately available analytical systems, methods, or software to examine or investigate the licensee, individual, or person subject to this Act;
(4) accept and rely on examination or investigation
reports made by other government officials, within or without this State; or
(5) accept audit reports made by an independent
certified public accountant for the licensee, individual, or person subject to this Act in the course of that part of the examination covering the same general subject matter as the audit and may incorporate the audit report in the report of the examination, report of investigation, or other writing of the Commissioner.
(g) The authority of this Section shall remain in effect, whether such a licensee, individual, or person subject to this Act acts or claims to act under any licensing or registration law of this State, or claims to act without the authority.
(h) No licensee, individual, or person subject to investigation or examination under this Section may knowingly withhold, abstract, remove, mutilate, destroy, or secrete any books, records, computer records, or other information.
(Source: P.A. 96-112, eff. 7-31-09; 97-1150, eff. 1-25-13.)
(205 ILCS 635/7-13)
Prohibited acts and practices for mortgage loan originators.
It is a violation of this Act for an individual subject to this Act to:
(1) Directly or indirectly employ any scheme,
device, or artifice to defraud or mislead borrowers or lenders or to defraud any person.
(2) Engage in any unfair or deceptive practice
(3) Obtain property by fraud or misrepresentation.
(4) Solicit or enter into a contract with a borrower
that provides in substance that the person or individual subject to this Act may earn a fee or commission through "best efforts" to obtain a loan even though no loan is actually obtained for the borrower.
(5) Solicit, advertise, or enter into a contract for
specific interest rates, points, or other financing terms unless the terms are actually available at the time of soliciting, advertising, or contracting.
(6) Conduct any business covered by this Act without
holding a valid license as required under this Act, or assist or aid and abet any person in the conduct of business under this Act without a valid license as required under this Act.
(7) Fail to make disclosures as required by this Act
and any other applicable State or federal law, including regulations thereunder.
(8) Fail to comply with this Act or rules or
regulations promulgated under this Act, or fail to comply with any other state or federal law, including the rules and regulations thereunder, applicable to any business authorized or conducted under this Act.
(9) Make, in any manner, any false or deceptive
statement or representation of a material fact, or any omission of a material fact, required on any document or application subject to this Act.
(10) Negligently make any false statement or
knowingly and willfully make any omission of material fact in connection with any information or report filed with a governmental agency or the Nationwide Multistate Licensing System and Registry or in connection with any investigation conducted by the Director or another governmental agency.
(11) Make any payment, threat or promise, directly
or indirectly, to any person for the purpose of influencing the independent judgment of the person in connection with a residential mortgage loan, or make any payment threat or promise, directly or indirectly, to any appraiser of a property, for the purpose of influencing the independent judgment of the appraiser with respect to the value of the property.
(12) Collect, charge, attempt to collect or charge,
or use or propose any agreement purporting to collect or charge any fee prohibited by this Act, including advance fees for loan modification.
(13) Cause or require a borrower to obtain property
insurance coverage in an amount that exceeds the replacement cost of the improvements as established by the property insurer.
(14) Fail to truthfully account for monies belonging
to a party to a residential mortgage loan transaction.
(15) Engage in conduct that constitutes dishonest
(16) Knowingly instruct, solicit, propose, or cause a
person other than the borrower to sign a borrower's signature on a mortgage related document, or solicit, accept or execute any contract or other document related to the residential mortgage transaction that contains any blanks to be filled in after signing or initialing the contract or other document, except for forms authorizing the verification of application information.
(17) Discourage any applicant from seeking or
participating in housing or financial counseling either before or after the consummation of a loan transaction, or fail to provide information on counseling resources upon request.
(18) Charge for any ancillary products or services,
not essential to the basic loan transaction for which the consumer has applied, without the applicant's knowledge and written authorization, or charge for any ancillary products or services not actually provided in the transaction.
(19) Fail to give reasonable consideration to a
borrower's ability to repay the debt.
(20) Interfere or obstruct an investigation or
examination conducted pursuant to this Act.
(21) Structure activities or contracts to evade
(Source: P.A. 100-1153, eff. 12-19-18.)