Bulletin: IL2009004

Dear Associates:

Requirement to use the Anti-Predatory Lending Database

The State of Illinois has developed an Anti-Predatory Lending Database pursuant to SB 1167. The database requires all mortgage brokers and loan originators licensed by the Illinois Department of Financial and Professional Regulation, Division of Banking to submit into the Anti-Predatory Lending Database (APLD) loan application information for every borrower applying for finance of residential real estate one-to-four units located in Cook County, Illinois (Chicagoland area).

The Act requires counseling for homebuyers whose loans meet certain criteria. Homebuyer counseling is offered through approved vendors that are located in and around Illinois and which are shown at http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?searchLang=SPA&webListAction=search&searchstate=IL which offer Homebuyer Education programs. These counseling sessions and the certificate of completion should be attained before any financing is completed.

Under no circumstances, in the case of a refinance, should a borrower attend counseling after closing, during the rescission period. An obviously greater problem arises if the transaction is a purchase and it is determined on the day of closing that counseling is required. If this occurs, the loan cannot be funded until the counseling is completed. Even if same-day counseling can be arranged, the borrower is under heavy pressure to accept the loan terms being offered and has no opportunity to decline the loan and shop for better terms. The clear intent of the statute is that, when required, the borrower is entitled to counseling before the closing takes place and before any loan documents are executed.

Regulatory Request

The Illinois Department of Professional and Financial Regulation has become aware of a continuing problem with Cook County closings taking place before the necessary data has been entered into the APLD.

No Cook County closing should commence until the file status is CA-Ready, unless the transaction is exempt. CA-Ready status indicates that all requirements of the APLD, including counseling, if necessary, have been fulfilled, and the file may be accessed by the closing agent.

Enforcement

The Cook County Recorder of Deeds will not record any mortgage or loan within Cook County unless it has a certificate of compliance or a certificate of exemption with it.

If you have questions relating to this bulletin, please contact your local underwriting personnel or Stewart Legal Services.

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