State of Illinois
91st General Assembly

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[ Introduced ][ House Amendment 001 ]




 1                    AMENDMENT TO HOUSE BILL 3007

 2        AMENDMENT NO.     .  Amend House Bill 3007,  AS  AMENDED,
 3    by replacing the title with the following:
 4        "AN  ACT to amend the Residential Mortgage License Act of
 5    1987."; and

 6    by replacing  everything after  the  enacting   clause   with
 7    the following:

 8        "Section 5.  The Residential Mortgage License Act of 1987
 9    is  amended by changing Sections 1-4, 1-5, and 4-8 and adding
10    Sections 4-8.1, 4-8.2, 4-8.3,  4-8.4,  4-8.5,  4-8.6,  4-8.7,
11    4-8.8, 4-8.9, 4-8.10, and 4-8.11  as follows:

12        (205 ILCS 635/1-4) (from Ch. 17, par. 2321-4)
13        Sec. 1-4.  Definitions.
14        (a)  "Residential  real  property"  or  "residential real
15    estate" shall  mean  real  property  located  in  this  State
16    improved  by  a one-to-four family dwelling used or occupied,
17    wholly or partly, as the home or residence  of  one  or  more
18    persons   and  may  refer,  subject  to  regulations  of  the
19    Commissioner, to unimproved real property  upon  which  those
20    kinds dwellings are to be constructed.
21        (b)  "Making  a  residential mortgage loan" or "funding a
                            -2-            LRB9109639JSpcam06
 1    residential mortgage loan" shall  mean  for  compensation  or
 2    gain,  either  directly  or  indirectly,  advancing  funds or
 3    making a commitment to advance funds to a loan applicant  for
 4    a residential mortgage loan.
 5        (c)  "Soliciting,  processing,  placing, or negotiating a
 6    residential mortgage loan" shall  mean  for  compensation  or
 7    gain, either directly or indirectly, accepting or offering to
 8    accept  an  application  for  a  residential  mortgage  loan,
 9    assisting  or  offering  to  assist  in  the processing of an
10    application for a residential mortgage loan on  behalf  of  a
11    borrower,  or  negotiating or offering to negotiate the terms
12    or conditions of a residential mortgage loan with a lender on
13    behalf of a borrower  including,  but  not  limited  to,  the
14    submission  of  credit  packages for the approval of lenders,
15    the  preparation  of  residential   mortgage   loan   closing
16    documents, including a closing in the name of a broker.
17        (d)  "Exempt entity" shall mean the following:
18             (1) (i)  Any banking organization or foreign banking
19        corporation  licensed  by  the  Illinois  Commissioner of
20        Banks and Real Estate or the United States Comptroller of
21        the Currency to transact business in this State; (ii) any
22        national  bank,  federally  chartered  savings  and  loan
23        association, federal savings bank, federal credit  union;
24        (iii)  any  pension  trust,  bank  trust,  or  bank trust
25        company; (iv) any savings and loan  association,  savings
26        bank, or credit union organized under the laws of this or
27        any  other  state;  (v) any Illinois Consumer Installment
28        Loan Act licensee; (vi) any insurance company  authorized
29        to  transact  business  in  this  State; (vii) any entity
30        engaged solely in commercial mortgage lending; (viii) any
31        service corporation of a savings and loan association  or
32        savings  bank  organized  under the laws of this State or
33        the service corporation of a federally chartered  savings
34        and loan association or savings bank having its principal
                            -3-            LRB9109639JSpcam06
 1        place  of  business  in  this State, other than a service
 2        corporation licensed or entitled to reciprocity under the
 3        Real Estate License Act of 2000; or (ix) any  first  tier
 4        subsidiary  of  a  bank,  the  charter of which is issued
 5        under  the  Illinois  Banking   Act   by   the   Illinois
 6        Commissioner  of Banks and Real Estate, or the first tier
 7        subsidiary of a  bank  chartered  by  the  United  States
 8        Comptroller  of  the  Currency and that has its principal
 9        place of business in this State, provided that the  first
10        tier  subsidiary  is  regularly  examined by the Illinois
11        Commissioner of Banks and Real Estate or the  Comptroller
12        of  the Currency, or a consumer compliance examination is
13        regularly conducted by the Federal Reserve Board.
14             (2)  Any person or entity  that  either  (i)  has  a
15        physical  presence in Illinois or (ii) does not originate
16        mortgage loans in the ordinary course of business  making
17        or  acquiring  residential mortgage loans with his or her
18        or its own funds for his or her  or  its  own  investment
19        without  intent  to make, acquire, or resell more than 10
20        residential mortgage loans in any one calendar year.
21             (3)  Any person employed by a licensee to assist  in
22        the  performance  of the activities regulated by this Act
23        who is compensated in any manner by only one licensee.
24             (4)  Any person licensed pursuant to the Real Estate
25        License Act of 2000, who engages only in  the  taking  of
26        applications  and  credit  and  appraisal  information to
27        forward to a licensee or an exempt entity under this  Act
28        and  who is compensated by either a licensee or an exempt
29        entity under this Act, but is not compensated  by  either
30        the buyer (applicant) or the seller.
31             (5)  Any  individual,  corporation,  partnership, or
32        other  entity  that  originates,  services,  or   brokers
33        residential  mortgage  loans,  as  these  activities  are
34        defined  in  this  Act,  and  who  or  which  receives no
                            -4-            LRB9109639JSpcam06
 1        compensation  for  those  activities,  subject   to   the
 2        Commissioner's  regulations with regard to the nature and
 3        amount of compensation.
 4             (6)  A person who prepares supporting  documentation
 5        for  a  residential  mortgage loan application taken by a
 6        licensee and performs  ministerial functions pursuant  to
 7        specific   instructions   of  the  licensee  who  neither
 8        requires nor permits the preparer to exercise his or  her
 9        discretion  or  judgment;  provided that this activity is
10        engaged in  pursuant  to  a  binding,  written  agreement
11        between the licensee and the preparer that:
12                  (A)  holds  the  licensee fully accountable for
13             the preparer's action; and
14                  (B)  otherwise meets the requirements  of  this
15             Section   and  this  Act,  does  not  undermine  the
16             purposes  of  this  Act,  and  is  approved  by  the
17             Commissioner.
18        (e)  "Licensee" or "residential mortgage licensee"  shall
19    mean  a person, partnership, association, corporation, or any
20    other entity who or which is licensed pursuant to this Act to
21    engage in the activities regulated by this Act.
22        (f)  "Mortgage loan",  "residential  mortgage  loan",  or
23    "home  mortgage loan" shall mean a loan to or for the benefit
24    of any natural person made primarily for personal, family, or
25    household use, primarily secured  by  either  a  mortgage  on
26    residential  real  property or certificates of stock or other
27    evidence of ownership interests  in  and  proprietary  leases
28    from,   corporations,   partnerships,  or  limited  liability
29    companies formed for the purpose of cooperative ownership  of
30    residential real property, all located in Illinois.
31        (g)  "Lender"   shall   mean   any  person,  partnership,
32    association, corporation, or  any  other  entity  who  either
33    lends or invests money in residential mortgage loans.
34        (h)  "Ultimate  equitable owner" shall mean a person who,
                            -5-            LRB9109639JSpcam06
 1    directly  or  indirectly,  owns  or  controls  an   ownership
 2    interest   in   a  corporation,  foreign  corporation,  alien
 3    business organization, trust, or any other form  of  business
 4    organization   regardless  of  whether  the  person  owns  or
 5    controls the ownership interest through one or  more  persons
 6    or  one  or  more  proxies,  powers  of  attorney,  nominees,
 7    corporations, associations, partnerships, trusts, joint stock
 8    companies,  or  other entities or devices, or any combination
 9    thereof.
10        (i)  "Residential mortgage financing  transaction"  shall
11    mean  the  negotiation, acquisition, sale, or arrangement for
12    or the offer to negotiate, acquire, sell, or arrange  for,  a
13    residential   mortgage  loan  or  residential  mortgage  loan
14    commitment.
15        (j)  "Personal residence address"  shall  mean  a  street
16    address and shall not include a post office box number.
17        (k)  "Residential  mortgage loan commitment" shall mean a
18    contract for residential mortgage loan financing.
19        (l)  "Party   to   a   residential   mortgage   financing
20    transaction" shall mean a borrower, lender, or loan broker in
21    a residential mortgage financing transaction.
22        (m)  "Payments" shall mean payment of all or any  of  the
23    following: principal, interest and escrow reserves for taxes,
24    insurance  and  other related reserves, and reimbursement for
25    lender advances.
26        (n)  "Commissioner" shall mean the Commissioner of  Banks
27    and  Real  Estate or a person authorized by the Commissioner,
28    the Office of Banks and Real Estate Act, or this Act  to  act
29    in the Commissioner's stead.
30        (o)  "Loan   brokering",   "brokering",   or   "brokerage
31    service" shall mean the act of helping to obtain from another
32    entity,  for  a  borrower, a loan secured by residential real
33    estate situated  in  Illinois  or  assisting  a  borrower  in
34    obtaining  a loan secured by residential real estate situated
                            -6-            LRB9109639JSpcam06
 1    in Illinois in return for consideration to be paid by  either
 2    the  borrower  or  the  lender including, but not limited to,
 3    contracting for the delivery of residential mortgage loans to
 4    a third party lender and soliciting, processing, placing,  or
 5    negotiating residential mortgage loans.
 6        (p)  "Loan  broker"  or  "broker"  shall  mean  a person,
 7    partnership, association, corporation, or  limited  liability
 8    company,    other    than    those   persons,   partnerships,
 9    associations, corporations, or  limited  liability  companies
10    exempted  from  licensing pursuant to Section 1-4, subsection
11    (d), of this Act, who performs the  activities  described  in
12    subsections (c) and (o) of this Section.
13        (q)  "Servicing"  shall mean the collection or remittance
14    for or the right or obligation to collect or  remit  for  any
15    lender,  noteowner,  noteholder,  or  for  a  licensee's  own
16    account,  of  payments, interests, principal, and trust items
17    such as hazard insurance and taxes on a residential  mortgage
18    loan in accordance with the terms of the residential mortgage
19    loan;  and  includes loan payment follow-up, delinquency loan
20    follow-up,  loan  analysis  and  any  notifications  to   the
21    borrower  that  are  necessary to enable the borrower to keep
22    the loan current and in good standing.
23        (r)  "Full service office" shall mean office and staff in
24    Illinois   reasonably   adequate   to   handle    efficiently
25    communications,  questions, and other matters relating to any
26    application for, or an  existing  home  mortgage  secured  by
27    residential  real estate situated in Illinois with respect to
28    which  the  licensee  is  brokering,   funding   originating,
29    purchasing,  or  servicing.   The management and operation of
30    each full service office  must  include  observance  of  good
31    business  practices such as adequate, organized, and accurate
32    books and records; ample  phone  lines,  hours  of  business,
33    staff training and supervision, and provision for a mechanism
34    to resolve consumer inquiries, complaints, and problems.  The
                            -7-            LRB9109639JSpcam06
 1    Commissioner  shall  issue  regulations  with regard to these
 2    requirements and shall include an  evaluation  of  compliance
 3    with  this Section in his or her periodic examination of each
 4    licensee.
 5        (s)  "Purchasing" shall mean the purchase of conventional
 6    or government-insured mortgage loans secured  by  residential
 7    real  estate  situated  in Illinois from either the lender or
 8    from the secondary market.
 9        (t)  "Borrower" shall mean the person or persons who seek
10    the services of a loan broker, originator, or lender.
11        (u)  "Originating" shall mean the issuing of  commitments
12    for and funding of residential mortgage loans.
13        (v)  "Loan  brokerage  agreement"  shall  mean  a written
14    agreement in which a broker  or  loan  broker  agrees  to  do
15    either of the following:
16             (1)  obtain  a  residential  mortgage  loan  for the
17        borrower  or  assist  the   borrower   in   obtaining   a
18        residential mortgage loan; or
19             (2)  consider  making a residential mortgage loan to
20        the borrower.
21        (w)  "Advertisement"   shall   mean   the   attempt    by
22    publication,   dissemination,   or   circulation  to  induce,
23    directly  or  indirectly,  any  person  to   enter   into   a
24    residential  mortgage  loan agreement or residential mortgage
25    loan brokerage agreement relative to a  mortgage  secured  by
26    residential real estate situated in Illinois.
27        (x)  "Residential   Mortgage   Board"   shall   mean  the
28    Residential Mortgage Board created in  Section  1-5  of  this
29    Act.
30        (y)  "Government-insured  mortgage  loan"  shall mean any
31    mortgage loan made on the security of residential real estate
32    insured by the Department of Housing and Urban Development or
33    Farmers  Home  Loan  Administration,  or  guaranteed  by  the
34    Veterans Administration.
                            -8-            LRB9109639JSpcam06
 1        (z)  "Annual audit" shall mean a certified audit  of  the
 2    licensee's  books and records and systems of internal control
 3    performed by a certified public accountant in accordance with
 4    generally  accepted  accounting  principles   and   generally
 5    accepted auditing standards.
 6        (aa)  "Financial  institution"  shall  mean a savings and
 7    loan association, savings  bank,  credit  union,  or  a  bank
 8    organized  under  the  laws of Illinois or a savings and loan
 9    association, savings bank, credit union or a  bank  organized
10    under  the  laws  of  the  United States and headquartered in
11    Illinois.
12        (bb)  "Escrow agent" shall mean a third party, individual
13    or entity charged with the fiduciary obligation  for  holding
14    escrow  funds  on  a  residential mortgage loan pending final
15    payout of those funds in accordance with  the  terms  of  the
16    residential mortgage loan.
17        (cc)  "Net worth" shall have the meaning ascribed thereto
18    in Section 3-5 of this Act.
19        (dd)  "Affiliate" shall mean:
20             (1)  any   entity   that  directly  controls  or  is
21        controlled by the licensee and any other company that  is
22        directly  affecting activities regulated by this Act that
23        is controlled by the company that controls the licensee;
24             (2)  any entity:
25                  (A)  that   is    controlled,    directly    or
26             indirectly,  by  a trust or otherwise, by or for the
27             benefit  of   shareholders   who   beneficially   or
28             otherwise  control, directly or indirectly, by trust
29             or otherwise,  the  licensee  or  any  company  that
30             controls the licensee; or
31                  (B)  a majority of the directors or trustees of
32             which  constitute  a majority of the persons holding
33             any such office with the  licensee  or  any  company
34             that controls the licensee;
                            -9-            LRB9109639JSpcam06
 1             (3)  any company, including a real estate investment
 2        trust,  that  is  sponsored  and advised on a contractual
 3        basis by the licensee or any subsidiary or  affiliate  of
 4        the licensee.
 5        The  Commissioner  may  define by rule and regulation any
 6    terms  used  in  this  Act  for  the  efficient   and   clear
 7    administration of this Act.
 8        (ee)  "First   tier   subsidiary"  shall  be  defined  by
 9    regulation incorporating the comparable definitions  used  by
10    the  Office  of  the  Comptroller  of  the  Currency  and the
11    Illinois Commissioner of Banks and Real Estate.
12        (ff)  "Gross  delinquency  rate"   means   the   quotient
13    determined  by  dividing  (1)  the  sum  of (i) the number of
14    government-insured  residential  mortgage  loans  funded   or
15    purchased  by  a licensee in the preceding calendar year that
16    are  delinquent  and  (ii)   the   number   of   conventional
17    residential   mortgage  loans  funded  or  purchased  by  the
18    licensee in the preceding calendar year that  are  delinquent
19    by  (2)  the  sum  of  (i)  the  number of government-insured
20    residential  mortgage  loans  funded  or  purchased  by   the
21    licensee  in  the preceding calendar year and (ii) the number
22    of  conventional  residential  mortgage   loans   funded   or
23    purchased by the licensee in the preceding calendar year.
24        (gg)  "Delinquency  rate  factor" means the factor set by
25    rule of the Commissioner that is multiplied  by  the  average
26    gross  delinquency rate of licensees, determined annually for
27    the immediately preceding calendar year, for the  purpose  of
28    determining   which   licensees  shall  be  examined  by  the
29    Commissioner pursuant to subsection (b)  of  Section  4-8  of
30    this Act.
31    (Source: P.A. 90-772, eff. 1-1-99; 91-245, eff. 12-31-99.)

32        (205 ILCS 635/1-5) (from Ch. 17, par. 2321-5)
33        Sec. 1-5.  Residential Mortgage Board.
                            -10-           LRB9109639JSpcam06
 1        (a)  Board  composition,  compensation.  There is created
 2    the Residential  Mortgage  Board  composed  of  7  5  members
 3    appointed  by the Commissioner of Banks and Real Estate.  The
 4    majority of persons on the  Board  shall  have  no  financial
 5    interest  in any residential mortgage business and one member
 6    shall be a  representative  of  the  Mortgage  Banking  Trade
 7    Association,  and one member shall be a representative of the
 8    Mortgage Broker Trade Association,  one  member  shall  be  a
 9    representative  of  the  National  Training  and  Information
10    Center  and  one  member  shall  be  a  representative of the
11    Woodstock Institute.  Members of the  Board  serving  on  the
12    effective  date of this amendatory Act of 1996 shall continue
13    to serve their unexpired terms as members of the  Residential
14    Mortgage  Board.  Thereafter, on or before January 15 of each
15    year, the  Commissioner  shall  appoint  one  or  more  board
16    members,  as  shall  be  necessary  to  maintain a 7 5 member
17    Board, whose terms shall be for 3 years commencing February 1
18    of the year in which they are respectively appointed.
19        If a vacancy occurs on the  Residential  Mortgage  Board,
20    the  Commissioner  shall  within 60 days appoint a new member
21    who shall hold office for the remainder of the vacated term.
22        The Board shall meet a minimum of 4 times  each  calendar
23    year  and  at  the  call  of  the  chairman, who along with a
24    Secretary, shall be selected by  the  Board  from  among  its
25    members.
26        Members  of  the Board shall be entitled to receive a per
27    diem allowance of $25 for each day or part of a day spent  on
28    Board  work  and shall be entitled to their expenses actually
29    and necessarily incurred in the performance of their  duties.
30    The  members  of  the  Board  serve  at  the  pleasure of the
31    Commissioner.
32        (b)  Duties of  Board.  The  Residential  Mortgage  Board
33    shall assist the Commissioner by:
34             (1)  submitting  recommendations to the Commissioner
                            -11-           LRB9109639JSpcam06
 1        for the efficient administration of this Act; and
 2             (2)  submitting recommendations to the  Commissioner
 3        for  establishing  guidelines for professional conduct of
 4        licensees under this  Act,  for  the  conduct  of  formal
 5        disciplinary  proceedings brought under this Act, and for
 6        establishing guidelines for qualifications of  applicants
 7        under this Act;
 8             (3)  participating in hearings conducted pursuant to
 9        Section 4-8.3 of this Act; and
10             (4)  (2)  performing  other duties as are prescribed
11        by the Commissioner.
12        (c)  Notice of proposed rulemaking shall  be  transmitted
13    to  the Board, and the Commissioner shall review the response
14    of the Board and any recommendations made in their  response.
15    The Commissioner, at any time, may seek the expert advice and
16    knowledge  of  the  Board  on  any  matter  relating  to  the
17    administration or enforcement of this Act.
18        (d)  (c)  Conflict of interest declarations.  Each member
19    of the Residential Mortgage Board  shall  file  annually,  no
20    later  than  February 1, with the Commissioner a statement of
21    his  or  her   current   business   transactions   or   other
22    affiliations   with   any  licensee  under  this  Act.    The
23    Commissioner may adopt rules to avoid conflicts  of  interest
24    on  the  part of members of the Residential Mortgage Board in
25    connection with their position on the Board.
26    (Source: P.A. 89-355, eff. 8-17-95; 89-508, eff. 7-3-96.)

27        (205 ILCS 635/4-8) (from Ch. 17, par. 2324-8)
28        Sec. 4-8.  Default rate; examination.
29        (a)  The  Commissioner  shall  obtain   from   the   U.S.
30    Department  of Housing and Urban Development on a semi-annual
31    basis that Department's default claim rates for  endorsements
32    issued by that Department.
33        (b)  The  Commissioner  shall  conduct  an examination of
                            -12-           LRB9109639JSpcam06
 1    each licensee having a default rate equal to or greater  than
 2    5%.
 3        This subsection shall not be construed as a limitation of
 4    the Commissioner's examination authority under Section 4-2 of
 5    this   Act   or  as  otherwise  provided  in  this  Act.  The
 6    Commissioner may require a licensee to provide  loan  default
 7    data  as  the  Commissioner  deems  necessary  for the proper
 8    enforcement of the Act.
 9        (c)  The purpose of the examination under subsection  (b)
10    shall  be  to  determine  whether  the  default  rate  of the
11    licensee has resulted from practices which deviate from sound
12    and accepted mortgage underwriting practices,  including  but
13    not  limited  to  credit  fraud, appraisal fraud and property
14    inspection  fraud.    For  the  purpose  of  conducting  this
15    examination, the Commissioner may accept  materials  prepared
16    for  the U.S. Department of Housing and Urban Development. At
17    the conclusion of the  examination,  the  Commissioner  shall
18    provide make his or her findings available to the Residential
19    Mortgage Board.
20        (d)  The Commissioner, at his or her discretion, may hold
21    public  hearings,  or  at  the  direction  of the Residential
22    Mortgage Board, shall hold public  hearings.  Such  testimony
23    shall  be  by  a  homeowner  or mortgagor or his agent, whose
24    residential interest is affected by  the  activities  of  the
25    residential  mortgage  licensee  subject  to such hearing. At
26    such public hearing, a witness may present testimony  on  his
27    or  her  behalf  concerning  only  his  or  her home, or home
28    mortgage or a witness may authorize a third party  to  appear
29    on  his  or her behalf.  The testimony shall be restricted to
30    information and comments related to a specific  residence  or
31    specific residential mortgage application or applications for
32    a  residential mortgage or residential loan transaction.  The
33    testimony must be preceded by either a letter of complaint or
34    a  completed  consumer  complaint  form  prescribed  by   the
                            -13-           LRB9109639JSpcam06
 1    Commissioner.
 2        (e)  The  Commissioner  shall,  at  the conclusion of the
 3    public hearings, release his or her findings and  shall  also
 4    make  public  any  action taken with respect to the licensee.
 5    The Commissioner shall also give full  consideration  to  the
 6    findings  of  this examination whenever reapplication is made
 7    by the licensee for a new license under this Act.
 8        (f)  A licensee that is examined pursuant  to  subsection
 9    (b)  shall  submit  to the Commissioner a plan which shall be
10    designed to reduce that licensee's default rate to  a  figure
11    that  is  less than 5%.  The plan shall be implemented by the
12    licensee as approved by the Commissioner.  A licensee that is
13    examined pursuant to subsection (b) shall report monthly, for
14    a one year period, one, 2, and 3 month defaults.
15        (g)  Whenever the Commissioner finds  that  a  licensee's
16    default  rate on insured mortgages is unusually high within a
17    particular geographic area, he  or  she  shall  require  that
18    licensee  to  submit  such  information  as  is  necessary to
19    determine whether that licensee's practices have  constituted
20    credit  fraud,  appraisal fraud or property inspection fraud.
21    The Commissioner shall promulgate such rules as are necessary
22    to determine whether any licensee's default rate is unusually
23    high within a particular area.
24    (Source: P.A.  89-355,  eff.  1-1-96;  89-626,  eff.  8-9-96;
25    90-301, eff. 8-1-97.)

26        (205 ILCS 635/4-8.1 new)
27        Sec.  4-8.1.  Investigations; notice of hearing. Upon the
28    motion of either the Commissioner or the Residential Mortgage
29    Board or upon the verified complaint in writing of any person
30    setting  forth  facts  which,  if  proven,  would  constitute
31    grounds for refusal, suspension,  or  revocation  of  license
32    under  this  Act,  the  Commissioner  shall  investigate  the
33    actions of any person, hereinafter called the "licensee", who
                            -14-           LRB9109639JSpcam06
 1    holds or represents that he or she holds a license under this
 2    Act.   The  Commissioner  shall, before suspending, revoking,
 3    placing  on  probationary  status,  or   taking   any   other
 4    disciplinary  action as the Commissioner may deem proper with
 5    regard to any registration, at least 30  days  prior  to  the
 6    date  set  for the hearing, notify the licensee in writing of
 7    any charges made and of the time and place for a  hearing  on
 8    the  charges. The Commissioner shall also direct the licensee
 9    to file a written answer to the charges under oath within  20
10    days  after  the  service of the notice upon the licensee and
11    inform the licensee that if  he  or  she  fails  to  file  an
12    answer,  his  or  her  certificate  of  registration  may  be
13    suspended,  revoked, or placed on probationary status or that
14    other disciplinary action may be taken with  regard  thereto,
15    as  the  Commissioner may deem proper. The written notice and
16    any notice in  the  proceeding  may  be  served  by  delivery
17    personally to the licensee or by registered or certified mail
18    to  the  address specified by the licensee in his or her last
19    notification to  the  Commissioner.  The  Commissioner  shall
20    preserve a record of all proceedings at the formal hearing of
21    any   case   involving  the  refusal  to  issue  or  renew  a
22    registration or discipline  of  a  licensee.  The  notice  of
23    hearing,  the complaint, all other documents in the nature of
24    pleadings and written motions filed in the  proceedings,  the
25    transcript  of  testimony,  the  report of the Board, and the
26    orders of  the  Commissioner  shall  be  the  record  of  the
27    proceedings.

28        (205 ILCS 635/4-8.2 new)
29        Sec. 4-8.2.  Disciplinary actions.
30        (a)  If a licensee, after receiving notice, fails to file
31    an  answer,  his or her license may, in the discretion of the
32    Commissioner, having first received the recommendation of the
33    Board, be  suspended,  revoked,  or  placed  on  probationary
                            -15-           LRB9109639JSpcam06
 1    status,  or  the  Commissioner may take whatever disciplinary
 2    action he or she may deem proper, including the imposition of
 3    a fine, without  a  hearing,  if  the  act  or  acts  charged
 4    constitute sufficient grounds for such action under this Act.
 5        (b)  The   Commissioner   may   temporarily  suspend  the
 6    registration of a licensee without a hearing, simultaneous to
 7    the institution of proceedings for a hearing under this  Act,
 8    if  the  Commissioner  finds  that evidence in his possession
 9    indicates that the person's continuation of use of the  title
10    would  constitute  an  immediate danger to the public. In the
11    event  that  the  Commissioner   temporarily   suspends   the
12    registration  of  a  licensee  without  a  hearing, a hearing
13    pursuant to Section 4-8.3 must be held within 15  days  after
14    the  suspension  has  occurred  and must be concluded without
15    appreciable delay.

16        (205 ILCS  635/4-8.3 new)
17        Sec. 4-8.3.  Hearings. At the time and place fixed in the
18    notice of hearing, the Commissioner shall proceed to hear the
19    charges before the Board,  and  both  the  licensee  and  the
20    complainant shall be accorded ample opportunity to present in
21    person,  or by counsel, such statements, testimony, evidence,
22    and arguments as may be pertinent to the charges or to  their
23    defense.  The Commissioner may continue the hearing from time
24    to  time.  If  the Board is not sitting at the time and place
25    fixed in the notice or at the time and  place  to  which  the
26    hearing  has  been continued, the Commissioner shall continue
27    the  hearing  for  a  period  not  to  exceed  30  days.  The
28    Commissioner shall have power to subpoena  and  bring  before
29    him  or her any licensee under this Act and to take testimony
30    either orally or by deposition, or both, with the  same  fees
31    and  mileage  and  in the same manner as prescribed for civil
32    actions in this State. The Commissioner shall have  power  to
33    administer  oaths at any hearing at which the Commissioner is
                            -16-           LRB9109639JSpcam06
 1    authorized by law to conduct.

 2        (205 ILCS 635/4-8.4 new)
 3        Sec.  4-8.4.  Attendance  of  witnesses;  production   of
 4    documents.  Any  circuit  court,  upon the application of the
 5    Commissioner, may order the attendance of witnesses  and  the
 6    production  of  relevant  books  and  papers  in  any hearing
 7    relative to the application for a suspension  of,  revocation
 8    of,  or refusal to renew a registration of, or the discipline
 9    of a licensee. The court may compel obedience to its order by
10    proceedings for contempt.

11        (205 ILCS 635/4-8.5 new)
12        Sec.  4-8.5.  Recommendations  for  disciplinary  action;
13    action by Commissioner. The Board may advise the Commissioner
14    that probation be granted or that other disciplinary  action,
15    including  the limitation of the use of license, be taken, as
16    it deems proper. If disciplinary action other than suspension
17    or revocation is taken, the Board may advise the Commissioner
18    to impose reasonable limitations and  requirements  upon  the
19    licensee to insure compliance with the terms of the probation
20    or   other   disciplinary   action  in  such  manner  as  the
21    Commissioner may require. The  Board  shall  present  to  the
22    Commissioner   a   written   report   of   its  findings  and
23    recommendations. A copy of the report shall  be  served  upon
24    the licensee, either personally or by registered or certified
25    mail.  Within  20  days  after such service, the licensee may
26    present to the Commissioner  his  motion  in  writing  for  a
27    rehearing,  specifying  the particular grounds for rehearing.
28    If the licensee orders and  pays  for  a  transcript  of  the
29    record,  the  time elapsing until the transcript is ready for
30    delivery to him shall not be counted as part of such 20 days.
31    At the expiration of the time allowed for filing a motion for
32    rehearing, the Commissioner may take the  action  recommended
                            -17-           LRB9109639JSpcam06
 1    by  the  Board.  Upon  suspension,  revocation,  placement on
 2    probationary status, or the taking of any other  disciplinary
 3    action,  including  the  limiting  of the use of the license,
 4    deemed  proper  by  the  Commissioner,  the  licensee   shall
 5    surrender  his  or her license to the Commissioner if ordered
 6    to do so by the Commissioner.  Upon a failure or  refusal  to
 7    do  so,  the  Commissioner  may  seize  the  license.  In all
 8    instances in which the Board has rendered a recommendation to
 9    the Commissioner with respect to  a  particular  person,  the
10    Commissioner  shall,  to  the extent that he or she disagrees
11    with or takes action contrary to the  recommendation  of  the
12    Board,  file  with  the Board his specific written reasons of
13    disagreement. The reasons shall be filed within 30 days after
14    the Commissioner has taken the contrary position. Each  order
15    of revocation, suspension, or other disciplinary action shall
16    contain  a  brief  and  concise  statement  of  the ground or
17    grounds upon which the Commissioner's  action  is  based,  as
18    well  as  the  specific  terms and conditions of that action.
19    Whenever  the  Commissioner  is  satisfied  that  substantial
20    justice has not been done either in an examination or in  the
21    revocation,  suspension,  or  refusal  to  issue a license or
22    other disciplinary  action,  the  Commissioner  may  order  a
23    re-examination or rehearing.

24        (205 ILCS 635/4-8.6 new)
25        Sec.  4-8.6.  Hearing  officer.  The Commissioner has the
26    authority to appoint any attorney duly licensed  to  practice
27    law  in the State of Illinois to serve as the hearing officer
28    for any disciplinary  action  under  this  Act.  The  hearing
29    officer shall have full authority to conduct the hearing. The
30    hearing   officer  shall  report  his  or  her  findings  and
31    recommendations to the the Commissioner and  the  Board.  The
32    Board shall have 60 days from receipt of the report to review
33    the report of the hearing officer and present its findings of
                            -18-           LRB9109639JSpcam06
 1    fact,   conclusions   of  law,  and  recommendations  to  the
 2    Commissioner. If the Board fails to present its report within
 3    the 60 day period, the Commissioner may issue an order  based
 4    on  the  report  of  the hearing officer. If the Commissioner
 5    disagrees in any regard with the Board's report,  he  or  she
 6    may issue an order in contravention of the Board's report.

 7        (205 ILCS 635/4-8.7 new)
 8        Sec.  4-8.7.  Restoration.  At any time after suspension,
 9    revocation, placement on probationary status, or  the  taking
10    of  any other disciplinary action with regard to any license,
11    the Commissioner may restore the license, or take  any  other
12    action to reinstate the license without examination, for good
13    cause shown in the opinion of the Commissioner.

14        (205 ILCS 635/4-8.8 new)
15        Sec.   4-8.8.  Administrative   Review   Law.  All  final
16    administrative decisions of the Commissioner are  subject  to
17    judicial  review  under the Administrative Review Law and its
18    rules. The term "administrative decision" is  defined  as  in
19    Section 3-101 of the Code of Civil Procedure. Proceedings for
20    judicial  review  shall  be commenced in the circuit court of
21    the county in which the party applying  for  review  resides,
22    but  if  the party is not a resident of this State, the venue
23    shall be in Sangamon County or Cook County. The  Commissioner
24    shall  not  be required to certify any record to the court or
25    file any answer in court or otherwise appear in any court  in
26    a  judicial  review  proceeding, unless there is filed in the
27    court with the complaint  a  receipt  from  the  Commissioner
28    acknowledging   payment   of  the  costs  of  furnishing  and
29    certifying the record. Exhibits shall  be  certified  without
30    cost.  Failure on the part of the plaintiff to file a receipt
31    in court shall be grounds for dismissal of the action. During
32    the pendency and hearing of any and all judicial  proceedings
                            -19-           LRB9109639JSpcam06
 1    incident to a disciplinary action, any sanctions imposed upon
 2    the  licensee  by the Commissioner shall remain in full force
 3    and effect.

 4        (205 ILCS 635/4-8.9 new)
 5        Sec. 4-8.9.  Revocation orders. An order  of  revocation,
 6    suspension, placement on probationary status, or other formal
 7    disciplinary action as the Commissioner may deem proper, or a
 8    certified copy thereof, over the seal of the Commissioner and
 9    purporting  to  be signed by the Commissioner, is prima facie
10    proof that:
11             (1)  the signature is the genuine signature  of  the
12        Commissioner;
13             (2)  the   Commissioner   is   duly   appointed  and
14        qualified; and
15             (3)  the  Board  and   the   members   thereof   are
16        qualified.

17        (205 ILCS 635/4-8.10 new)
18        Sec.  4-8.10.  Confidential  information;  disclosure. In
19    hearings conducted under this Act, information presented into
20    evidence that was acquired by the licensee when  serving  any
21    individual   in   connection  with  a  residential  mortgage,
22    including all financial information of the individual,  shall
23    be  deemed  strictly  confidential  and  shall  only  be made
24    available either as part of the record of a hearing hereunder
25    or otherwise:  (1)  when  the  record  is  required,  in  its
26    entirety,  for  purposes  of judicial review; or (2) upon the
27    express written consent of the individual served, or  in  the
28    case of his or her death or disability, the consent of his or
29    her personal representative.

30        (205 ILCS 635/4-8.11 new)
31        Sec.  4-8.11.  Reports  of violation. Any person licensed
                            -20-           LRB9109639JSpcam06
 1    under this Act, or  any  other  person,  may  report  to  the
 2    Commissioner  any  information  that  person  may  have  that
 3    appears  to  show that a licensee under this Act is or may be
 4    in violation of this Act.

 5        Section 99.  Effective date. This Act takes  effect  upon
 6    becoming law.".

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