Illinois Origination Reference Guide
- Kacey Olson
Owned by Kacey Olson
| Citation | Topic | Requirement |
| Residential Mortgage License Act of 1987 / Ill. Admin. Code tit. 38, §1050.1340 | Advance Fee Agreement | If a residential mortgage loan is not closed, all the licensee's charges must be refunded to the borrower, except to the extent a written agreement between the borrower and licensee or a written notification specifies that they are nonrefundable. |
| Residential Mortgage License Act of 1987 / Ill. Admin. Code tit. 38, §1050.1315 | Avoidance of Commitment | If a residential mortgage loan applicant and the subject residential real estate meet a licensee's normal standards, the licensee shall not refuse to make a residential mortgage loan to the applicant in order to avoid complying with terms stated in written agreements between the licensee and borrower or in written disclosures required by this Part. |
| Residential Mortgage License Act of 1987 / 205 Ill. Comp. Stat. Ann. 635/7-13(16) | Blank Spaces | A licensee may not have any instrument in which blank spaces are left to be filled in after execution. |
| Residential Mortgage License Act of 1987 / Ill. Admin. Code tit. 38, §1050.1110 | Borrower Information Document | Prior to a mortgage loan applicant signing a completed residential mortgage loan application or giving the licensee any consideration, whichever comes first, the licensee must give the applicant a Borrower Information Document. The document may be incorporated into or appended into such material as is necessary for compliance with federal requirements. |
| IL Public Act 95-0691 (SB1167) | Certificate of Exemption | In Cook, Kane, Peoria, or Will County, a Certificate of Exemption will need to be recorded with the mortgage (see Recording Requirement). |
| Residential Mortgage License Act of 1987 / Ill. Admin. Code tit. 38, §1050.1230 | Changes Affecting Loans in Process | If a borrower does not qualify for the loan amount, terms or programs for which he or she applied and the costs of another recommended program would materially differ from the costs itemized on the Loan Estimate (or Good Faith Estimate, as applicable), the licensee must immediately provide to the borrower a written, and when possible, a verbal, plain-English explanation of any program the licensee recommends as one for which the borrower may be qualified. The explanation must include, but not be limited to, detailed information on costs to the borrower. Additionally, when any notice is received from a secondary market underwriter, an investor, FHA or the VA, which materially affects a loan in process, the licensee processing the loan application must notify the borrower in writing, and when possible, verbally, immediately upon receipt of such notice. Examples include, but are not limited to, future or immediate change of rules or requirements, discontinuation of a specific loan program, failure by the borrower to qualify and alternatives, if any, available to the borrower. Repealed effective 10/17/2017 HB2965 |
| Residential Mortgage License Act of 1987 / 205 Ill. Comp. Stat. Ann. 635/7-13(18) | Charge for Ancillary Products | An individual subject to the RMLA may not 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. |
| Residential Mortgage License Act of 1987 / Ill. Admin. Code tit. 38, §1050.1320(a) | Charges Paid by Seller (Conventional Loans) | Except for FHA-insured or VA-guaranteed residential mortgage loans, no licensee shall: 1) impose any charges upon a seller under a borrower's purchase contract; 2) condition any commitment for a residential mortgage loan upon the agreement of the seller to pay such charges; or 3) incur any charges on behalf of the seller, unless specifically authorized by that seller to do so. |
| High Risk Home Loan Act / 815 Ill. Comp. Stat. Ann. 137/125(d) | Contemplated Loan Withdrawal Notice | If, based upon the review, the borrower determines that the loan is not in his or her best economic interests, the reviewer will notify the lender and this determination will enable the borrower to withdraw from the contemplated loan with no financial penalty. |
| Residential Mortgage License Act of 1987 / Ill. Admin. Code tit. 38, §1050.1150 | Copies of Other Documents | The borrower must be provided, at the time of signing, with a copy of each document signed by the borrower, except for releases of credit information and verifications of employment, bank accounts and current mortgage history. Forms furnished for application by mail must carry a clear and conspicuous statement that it is the responsibility of the borrower to obtain machine copies before mailing the signed documents back to the licensee. |
| Residential Mortgage License Act of 1987 / 205 Ill. Comp. Stat. Ann. 635/5-11 | Copy of Appraisal | Licensees must provide to the borrower a complete copy of any appraisal, including any appraisal generated using the Automated Valuation Model, obtained by the lender for use in underwriting the residential mortgage loan within 3 business days of receipt by the licensee, but in no event less than 24 hours prior to the day of closing. The appraisal may be sent via first class mail, commercial carrier, by fax or by e-mail, if the borrower has supplied an e-mail address. |
| Residential Mortgage License Act of 1987 / Ill. Admin. Code tit. 38, §1050.1120 | Description of Required Documentation | A licensee must provide an applicant, at the time of application, with an accurate and complete description of the exhibits and documentation that the applicant is reasonably required to provide in order for the licensee to underwrite the loan. |
| Residential Mortgage License Act of 1987 / 205 Ill. Comp. Stat. Ann. 635/5-12 | Disclosure of Refinancing Options | If the subject of a future loan is discussed by a licensee making, providing, or arranging a mortgage loan, the licensee must disclose the circumstances under which a new loan could be considered. The disclosure must clearly state that it is not a contract and that the licensee is not representing or promising that a new loan could or would be made at any time in the future. |
| Residential Mortgage License Act of 1987 / Ill. Admin. Code tit. 38, §1050.1360(a) | Election of Escrow Account or Pledged Time Deposit Account | If the mortgage is not FHA-insured or VA-guaranteed and relates to the purchase of owner-occupied, single family security real estate, a document must be executed by the residential mortgage loan applicant at closing to indicate his or her acceptance or rejection of the use of a pledged time deposit account in lieu of an escrow account pursuant to the Mortgage Escrow Account Act. The notice requirement does not apply to any mortgage for which the lender elects not to require the maintenance of an escrow account or other specific arrangement for the payment of taxes. |
| Residential Mortgage License Act of 1987 / Ill. Admin. Code tit. 38, §1050.1110 | Election of Escrow Account or Pledged Time Deposit Account (Example) | If the mortgage is not FHA-insured or VA-guaranteed and relates to the purchase of owner-occupied, single-family security real estate unless there is a certainty that the lender will not require maintenance on an escrow account for payment of taxes, a copy of the Mortgage Escrow Account Act (MEAA) along with a copy of the document to be executed by the applicant at closing with respect to use of a pledged time deposit account in lieu of an escrow account pursuant to the MEAA There are specific instances when it is not necessary to provide the document regarding the use of a pledged time deposit account in lieu of an escrow account. |
| Residential Mortgage License Act of 1987 / Ill. Admin. Code tit. 38, §1050.1360(b) | Escrow Account Disclosure Agreement | If the mortgage represents a first-lien position and provides for an escrow account to be maintained for payment of taxes and/or insurance premiums, an Escrow Account Disclosure Agreement is required between the licensee and the residential mortgage loan applicant. This agreement must be in writing and executed at the closing. The agreement must describe the procedures for adjustment to the escrow account and provide that, if there is an increase in the amount of the escrow account, the applicant will receive written notice from the licensee at least thirty 30 days prior to the date of the increase. This agreement may be amended from time to time as agreed upon by the parties, except that the 30-day notice requirement may not be amended. This requirement does not apply to any mortgage for which the lender elects not to require the maintenance of an escrow account or other specific arrangement for the payment of taxes. |
| Residential Mortgage License Act of 1987 / Ill. Admin. Code tit. 38, §1050.1360(a)(2) | Explanation of Noncompliance with the Mortgage Escrow Account Act | In the case of a lender who is not required by law to comply with the Mortgage Escrow Account Act, the licensee must furnish a written explanation, including citations to the authority for noncompliance to be given to the mortgage loan applicant at closing, with a copy to be signed by the applicant acknowledging receipt. The notice requirement does not apply to any mortgage for which the lender elects not to require the maintenance of an escrow account or other specific arrangement for the payment of taxes. |
| Residential Mortgage License Act of 1987 / Ill. Admin. Code tit. 38, §1050.1355 | Failure to Close Disclosure | If a residential mortgage loan fails to close within a specified commitment period, the licensee must provide detailed written notification, in plain English, to the applicant as to why the residential mortgage loan failed to close and specify any resulting conditions that will affect the availability of the loan. |
| High Risk Home Loan Act / 815 Ill. Comp. Stat. Ann. 137/55 | Financing of Points and Fees | A lender may not transfer, deal in, offer, or make a high risk home loan that finances, directly or indirectly, any points and fees. |
| Residential Mortgage License Act of 1987 / Ill. Admin. Code tit. 38, §1050.1320(b) | Good Faith Estimate of Charges to be Paid by Seller | With respect to FHA-insured or VA-guaranteed residential mortgage loans, the licensee must provide, at time of application, a written good faith estimate of the amounts and nature of charges to be paid which are disallowed by the applicable federal agency for payment by the borrower. A clear and conspicuous statement must disclose that such charges are disallowed by the applicable federal agency for payment by the borrower. Examples of such charges may include, but are not limited to, tax service fee, assignment fee, underwriter fee. |
| High Risk Home Loan Act / 815 Ill. Comp. Stat. Ann. 137/20 | High Risk Home Loan Act Worksheets | When making a high risk home loan, the lender must verify the borrower's ability to repay. This verification requires, at a minimum, the following: (1) that the borrower prepare and submit to the lender a personal income and expense statement in a form prescribed by the Commissioner or the Director, who may permit the use of other forms; (2) that the borrower's income is verified by means of tax returns, pay stubs, accounting statements, or other prudent means; and (3) that a credit report is obtained regarding the borrower. |
| Residential Improvement Loan Act / 815 Ill. Comp. Stat. Ann. 135/2 | Improvement, Repair, or Remodeling | A lender making a loan for improvement, repair, or remodeling of a residential structure may not disburse funds to, for the account of, or as directed by a contractor unless the lender has received a completion certificate. |
| Collateral Protection Act / 815 Ill. Comp. Stat. Ann. 180/10 | Lender Placed Insurance Notice | A lender may place collateral protection insurance provided the following conditions are met: (1) the borrower has entered into a credit transaction with the lender; (2) the credit transaction has been reduced to a credit agreement, and the credit agreement requires the borrower to maintain insurance on the real property; and (3) a notice substantially similar to the following has been included in the credit agreement or on a separate document provided to the borrower and to any cosigner, guarantor, or other person liable with the borrower for the obligation, at the time the credit agreement is entered. |
| Residential Mortgage License Act of 1987 / Ill. Admin. Code tit. 38, §1050.1305 | Loan Approval Notice | Immediately upon approval of a residential mortgage loan application, the licensee must deliver to the applicant, either personally or via first class United States mail or private delivery service, a written loan approval notice stating the terms and condition of the residential mortgage loan agreed to by the licensee and borrower. Such approval notice must state the following: (1) the exact expiration date of the loan commitment; (2) all economic terms of the loan and their duration; and (3) whether the economic terms are fixed (If the economic terms are subject to change, the approval notice must provide a plain English explanation of the time when they may be changed, as well as the circumstances under which the economic terms may be changed and the extent to which they may be changed). Repealed effective 10/17/2017 HB2965 |
| Residential Mortgage License Act of 1987 / Ill. Admin. Code tit. 38, §1050.1010 | Loan Brokerage Agreement | Prior to a mortgage loan applicant signing a completed residential mortgage loan application or giving the broker any consideration, whichever comes first, a Loan Brokerage Agreement must be signed by both the applicant and the licensee who will provide loan brokering services to the borrower. |
| Residential Mortgage License Act of 1987 / Ill. Admin. Code tit. 38, §1050.1020 | Loan Brokerage Disclosure Statement | Prior to the borrower signing a Loan Brokerage Agreement or giving the licensee any consideration, whichever comes first, the licensee must give the borrower a Loan Brokerage Disclosure Statement. The disclosure statement must prominently display the following material, in the following order: (1) in the case of a licensee who only brokers, a clear and conspicuous statement that: (A) the licensee does not make loans; and (B) actual funds are provided by another entity, which entity may affect availability of funds; (2) the name under which the entity is licensed under the RMLA, any other name(s) under which the licensee has engaged in activities regulated by the RMLA even if not licensed by the current or predecessor RMLA, during the preceding 10 years and, if applicable, the name of the parent of affiliated company; (3) whether the licensee does business as an individual, partnership, association, corporation or any other organization form; and (4) if the licensee brokers loans to only 1 entity, disclosure of that fact. The licensee must obtain the customer's signature on a duplicate of the disclosure statement near clear and conspicuous wording indicating that the borrower has read and understands the disclosure statement or has had the contents explained by someone not connected with the licensee. |
| High Risk Home Loan Act / 815 Ill. Comp. Stat. Ann. 137/70 | Loan-to-Value | A lender may not transfer, deal in, offer, or make a high risk home loan where the loan amount exceeds the value of the property securing the loan. |
| Residential Mortgage License Act of 1987 / 205 Ill. Comp. Stat. Ann. 635/7-14 | NMLS Unique Identifier | The Nationwide Mortgage Licensing System unique identifier of any person originating a residential mortgage loan must be clearly shown on all residential mortgage loan application forms, solicitations, and advertisements, including business cards and websites, and any other documents as established by rule, regulation, or order of the Department. |
| Residential Mortgage License Act of 1987 / 205 Ill. Comp. Stat. Ann. 635/5-9 | Notice of Change in Loan Terms | A licensee must provide timely notice to the borrower of the following: (1) any fees payable by the borrower to the licensee that increase by more than 10% or $100, whichever is greater; and (2) any material change in the terms of the residential mortgage loan prior to the closing of the loan. For "material change" definition, see 205 Ill. Comp. Stat. Ann. 635/5-9(a). The disclosures will be deemed timely if the licensee provides the borrower with the revised information not later than 3 days after learning of the change or 24 hours before the residential mortgage loan is closed, whichever is earlier. If the licensee discloses a material change more than the 3 days after learning of the change but still 24 hours before the residential mortgage loan is closed, it will not be liable for penalties or forfeitures if the licensee cures in time for the borrower to avoid any damage. |
| High Risk Home Loan Act / 815 Ill. Comp. Stat. Ann. 137/125 | Notice of Independent Review | A borrower must be afforded the opportunity to seek independent review by the Department of the terms of high risk home loan, in order to determine affordability of the loan. The Department will inform the borrower of the amount the borrower has available for a monthly mortgage payment based upon the borrower's budget. The Department will also review loan information pertaining to balloon payments and adjustable interest rates and other items disclosed by the loan documents affecting amount of payment and will inform the borrower of these items. If, based upon the review, the borrower determines that the loan is not in his or her best economic interests, the reviewer will notify the lender and this determination will enable the borrower to withdraw from the contemplated loan with no financial penalty. |
| High Risk Home Loan Act / 815 Ill. Comp. Stat. Ann. 137/110 | Notice of Mortgage Awareness Program | Prior to making a high risk home loan, a lender must inform the borrower in writing of the right to participate in the Mortgage Awareness Program provided by the Department. A lender may not offer less favorable loan terms to a borrower due to that borrower's participation in the Mortgage Awareness Program. |
| Reverse Mortgage Act / 765 Ill. Comp. Stat. Ann 945/20 | Notice regarding Cooling-off Period | At the time of making a written commitment, the lender must provide the borrower a separate document in at least 12-point font that contains a statement requiring a 3-day cooling-off period for a reverse mortgage loan. The 3-day cooling-off period cannot be waived. |
| Reverse Mortgage Act / 765 Ill. Comp. Stat. Ann 945/15 | Notice regarding Reverse Mortgage Counseling | At the time of the initial inquiry regarding a reverse mortgage or, if not practically feasible, after the borrower makes a request to apply for a reverse mortgage, a lender must provide to the borrower a notice regarding reverse mortgage counseling. |
| High Risk Home Loan Act / 815 Ill. Comp. Stat. Ann. 137/95 | Notice to Borrower | A lender may not transfer, deal in, offer, or make a high risk home loan unless the lender has given the following notice or a substantially similar notice in writing, to the borrower, acknowledged in writing and signed by the borrower not later than 3 business days prior to the loan closing. |
| Mortgage Insurance Limitation and Notification Act / 765 Ill. Comp. Stat. Ann. 930/15 | Private Mortgage Insurance Disclosure | If a person enters into a transaction to obtain a mortgage for his or her principal residence and private mortgage insurance may be required in connection with the transaction, the mortgagee must disclose in writing all of the following: (1) Whether PMI will be required to be obtained or maintained with respect to the mortgage; (2) the period during which the insurance will be required to be in effect; (3) the conditions under which the mortgagor may cancel the insurance; and (4) that the mortgagor will be notified not less than annually of an address and telephone number that may be used to contact the mortgagee to determine whether or not the insurance may be terminated and, if the insurance may be terminated, the conditions and procedures for termination. |
| Residential Mortgage License Act of 1987 / Ill. Admin. Code tit. 38, §1050.1335 | Rate-Lock Fee Agreement | A licensee under the RMLA may charge a rate-lock fee, provided several conditions are met. A Rate-Lock Fee Agreement must be in writing and signed by both the licensee and prospective borrower and provided to the prospective borrower regardless of whether a fee is collected or the interest rate is locked or floating. |
| High Risk Home Loan Act / 815 Ill. Comp. Stat. Ann. 137/45 | Refinancing Restrictions | A lender may not refinance any high risk home loan where such refinancing charges additional points and fees within a 12-month period after the original loan agreement was signed, unless the refinancing results in a tangible net benefit to the borrower. |
| 765 Ill. Comp. Stat. Ann. 77/70(c) | Resubmission of Data into the Predatory Lending Database Program | If at any time after submitting the information required under Section 72 the broker or originator (i) changes the terms of the loan or (ii) issues a new commitment to the borrower, then, within 5 business days thereafter, the broker or originator shall re-submit all of the information required under Section 72. |
| Senior Citizens Real Estate Tax Deferral Act / 320 ILCS 30/ | Senior Citizens Real Estate Tax Deferral Act | Sec. 3. A taxpayer may, on or before March 1 of each year, apply to the county collector of the county where his qualifying property is located, or to the official designated by a unit of local government to collect special assessments on the qualifying property, as the case may be, for a deferral of all or a part of real estate taxes payable during that year for the preceding year in the case of real estate taxes other than special assessments, or for a deferral of any installments payable during that year in the case of special assessments, on all or part of his qualifying property. |
| 765 Ill. Comp. Stat. Ann. 77/72 | Submission of Data into the Predatory Lending Database Program | Sec. 72. Originator; required information. As part of the predatory lending database program, the broker or originator must submit all of the required information for inclusion in the predatory lending database for each loan for which the originator takes an application. Submission must occur within 10 business days after taking a mortgage application. |
| High Risk Home Loan Act / 815 Ill. Comp. Stat. Ann. 137/110 | Waiver of Participation in Mortgage Awareness Program | Unless otherwise prohibited by the High Risk Home Loan Act, a borrower may waive participation in the Mortgage Awareness Program, provided that the waiver occurs no less than 2 business days after the day that the borrower receives notice of the Mortgage Awareness Program from the lender, and that the waiver is in writing in a form approved by the Department. |