815 ILCS 137/1
Short title
Short title. This Act may be cited as the High Risk Home Loan Act. (Source: P.A. 93-561, eff. 1-1-04.)
Illinois Compiled Statutes 815 ILCS 137 — High Risk Home Loan Act.
Illinois · statute · 815 ILCS 137 · 49 active provisions
Provisions
815 ILCS 137/5
Purpose and construction
Purpose and construction. The purpose of this Act is to protect borrowers who enter into high risk home loans from abuse that occurs in the credit marketplace when creditors and brokers are not sufficiently regulated in Illinois. This Act is to be construed as a borrower protection statute for all purposes. This Act sh…
815 ILCS 137/10
Definitions
Definitions. As used in this Act: "Approved credit counselor" means a credit counselor approved by the Director of Financial Institutions. "Bona fide discount points" means loan discount points that are knowingly paid by the consumer for the purpose of reducing, and that in fact result in a bona fide reduction of, the…
815 ILCS 137/15
Ability to repay
Ability to repay. A creditor or broker shall not transfer, deal in, offer, or make a high risk home loan if the creditor or broker does not believe at the time the loan is consummated that the borrower will be able to make the scheduled payments to repay the obligation based upon a consideration of his or her current a…
815 ILCS 137/20
Verification of ability to repay loan
Verification of ability to repay loan. The lender shall verify the borrower's ability to repay the loan in the case of a high risk home loan. The verification shall require, 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 b…
815 ILCS 137/25
Good faith dealings; fraudulent or deceptive practices
Good faith dealings; fraudulent or deceptive practices. A lender must act in good faith in all relations with a borrower, including but not limited to, transferring, dealing in, offering, or making a high risk home loan. No lender shall employ fraudulent or deceptive acts or practices in the making of a high risk home…
815 ILCS 137/30
No prepayment penalty
No prepayment penalty. A high risk home loan may not contain terms under which a consumer must pay a prepayment penalty for paying all or part of the principal before the date on which the principal is due. For purposes of this Section, any method of computing a refund of unearned scheduled interest is a prepayment pen…
815 ILCS 137/35
Bona fide discount points
Bona fide discount points. For the purposes of determining whether the amount of points and fees meets the definition of "high risk home loan" under this Act, either the amounts described in paragraph (1) or (2) of this Section, but not both, shall be excluded: (1) Up to and including 2 bona fide discount points payabl…
815 ILCS 137/35.5
No balloon payments
No balloon payments. No high risk home loan may contain a scheduled payment that is more than twice as large as the average of earlier scheduled payments. This Section does not apply when the payment schedule is adjusted to the seasonal or irregular income of the consumer. (Source: P.A. 97-849, eff. 1-10-14 (see Sectio…
815 ILCS 137/40
Pre-paid insurance products and warranties
Pre-paid insurance products and warranties. No lender shall transfer, deal in, offer, or make a high risk home loan that finances a single premium credit life, credit disability, credit unemployment, or any other life or health insurance, directly or indirectly. Insurance calculated and paid on a monthly basis shall no…
815 ILCS 137/45
Refinancing prohibited in certain cases
Refinancing prohibited in certain cases. No lender shall 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. (Source: P.A. 93-561, eff.…
815 ILCS 137/55
Financing of points and fees
Financing of points and fees. No lender shall transfer, deal in, offer, or make a high risk home loan that finances, directly or indirectly, any points and fees. No lender shall transfer, deal in, offer, or make a high risk home loan that finances any prepayment fee or penalty payable by the consumer in a refinancing t…
815 ILCS 137/60
Payments to contractors
Payments to contractors. No lender shall make a payment of any proceeds of a high risk home loan directly to a contractor under a home improvement contract other than: (1) by instrument payable to the borrower or payable jointly to the borrower and contractor; or (2) at the election of the borrower, by a third-party es…
815 ILCS 137/65
Negative amortization
Negative amortization. No lender shall transfer, deal in, offer, or make a high risk home loan, other than a loan secured only by a reverse mortgage, with terms under which the outstanding balance will increase at any time over the course of the loan because the regular periodic payments do not cover the full amount of…
815 ILCS 137/70
Negative equity
Negative equity. No lender shall transfer, deal in, offer, or make a high risk home loan where the loan amount exceeds the value of the property securing the loan. (Source: P.A. 93-561, eff. 1-1-04.)
815 ILCS 137/80
Late payment fee
Late payment fee. A lender shall not transfer, deal in, offer, or make a high risk home loan that provides for a late payment fee, except under the following conditions: (1) the late payment fee shall not be in excess of 4% of the amount of the payment past due; (2) the late payment fee shall only be assessed for a pay…
815 ILCS 137/80.5
Coordination with subsequent late fees
Coordination with subsequent late fees. If a payment is otherwise a full payment for the applicable period, is paid on its due date or within an applicable grace period, and the only delinquency or insufficiency of payment is attributable to any late fee or delinquency charge assessed on any earlier payment, no late fe…
815 ILCS 137/80.6
Failure to make installment payment
Failure to make installment payment. If, in the case of a loan agreement the terms of which provide that any payment shall first be applied to any past principal balance, the consumer fails to make an installment payment and the consumer subsequently resumes making installment payments but has not paid all past due ins…
815 ILCS 137/85
Payment compounding
Payment compounding. No lender shall transfer, deal in, offer, or make a high risk home loan that includes terms under which more than 2 periodic payments required under the loan are consolidated and paid in advance from the loan proceeds provided to the borrower. (Source: P.A. 93-561, eff. 1-1-04.)
815 ILCS 137/90
Call provision
Call provision. No lender shall transfer, deal in, offer, or make a high risk home loan that contains a provision that permits the lender, in its sole discretion, to accelerate the indebtedness, provided that this provision does not prohibit acceleration of a loan in good faith due to a borrower's failure to abide by t…
815 ILCS 137/90.5
Modification and deferral fees prohibited
Modification and deferral fees prohibited. A lender, successor in interest, assignee, or any agent of any of the foregoing may not charge a consumer any fee to modify, renew, extend, or amend a high risk home loan or to defer any payment due under the terms of the loan. (Source: P.A. 97-849, eff. 1-10-14 (see Section 1…
815 ILCS 137/95
Disclosure prior to making a high risk home loan
Disclosure prior to making a high risk home loan. A lender shall 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 the time the noti…
815 ILCS 137/100
Counseling prior to perfecting foreclosure proceedings
Counseling prior to perfecting foreclosure proceedings. (a) If a high risk home loan becomes delinquent by more than 30 days, the servicer shall send a notice advising the borrower that he or she may wish to seek approved credit counseling. (b) The notice required in subsection (a) shall, at a minimum, include the foll…
815 ILCS 137/105
Right to cure
Right to cure. (a) Before an action is filed to foreclose or collect money due pursuant to a high risk home loan or before other action is taken to seize or transfer ownership of property subject to a high risk home loan, the lender or lender's assignee of the loan shall deliver to the borrower a notice of the right to…
815 ILCS 137/110
Mortgage Awareness Program
Mortgage Awareness Program. (a) The Mortgage Awareness Program is a counseling and educational component that must be provided by the Director and the Commissioner. (b) The core curriculum of the Mortgage Awareness Program shall include all of the following: (1) Explanation of the amount financed. (2) Explanation of th…
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