Guide to New Closing Procedures: Kane, Peoria, and Will Counties, Illinois
 
STEP 1: Notify ATG to Initiate Registration

Illinois Anti-Predatory Lending Database

As reported in our June 15, 2010,ATG Member Special Bulletin, the Illinois Anti-Predatory Lending Database will go into effect for Kane, Peoria, and Will Counties on July 1, 2010. The official website for the program can be found atwww.ilapld.com. A customer service phone number is available for questions at 1-888-ILL-APLD.

Registration to Conduct Closings

If you conduct closings of property in Kane, Peoria, or Will Counties, then you mustnotify ATGso that we may register you with the State of Illinois. An ATG representative will contact you with your State of Illinois login and password.

Trainings

State of Illinois | No MCLE |Once you receive your login and password you can log onto the state&€™s website and participate in the state&€™s online training so that you are prepared for the July 1 start of this program. Once logged in, closers may access the training by clicking the "Training" tab in the user system menu and proceed with the interactive training session. Please note that if you take this step prior to June 23, 2010, the program will reference Cook County. While still helpful as background, the specific information for Kane, Peoria, and Will counties will be available on June 23 and thereafter.

ATG | 1.50 MCLE |ATG has a free ATG Legal EducationOnDemandtraining session,The Anti-Predatory Lending Database Program: Kane, Peoria, and Will County Mortgages(seedetails). Attorney participants earn 1.50 hours of MCLE.

Relevant ATG Forms

ATG offers the following forms to assist you:

Purpose of the Anti-Predatory Lending Database Program

The original authorizing act for this program is Public Act 95-0691, SB 1167, codified at 765 ILCS 77/70,et seq.The intention of the program is to reduce predatory lending practices by requiring certain borrowers to receive counseling before proceeding to closing. After completing the state-mandated counseling, the borrowers can then choose whether to continue with the loan transaction. Cook County has been subject to the Act since 2008.

Transactions Subject to the Program

All one-to-four unit, owner-occupied residential property is subject to the Act, which means that non-owner-occupied property, commercial property, residential property consisting of more than four units, government, farm, industrial, and other properties are not subject to these requirements. Furthermore, reverse mortgages are exempt from the Act. Certain lenders, those not subject to the Residential Mortgage License Act, are exempt from the Act, and may receive a Certificate of Exemption for their loans.

Recording Requirement

The Act requires that all mortgages to be recorded must be presented together with either a Certificate of Compliance with the counseling requirement or a Certificate of Exemption from the counseling requirement to be eligible for recording. As a result, for ATG to insure a mortgage, it must be recorded together with the appropriate certificate. Certificates may be obtained only by closers who are registered and trained with the State of Illinois, thereby allowing them to enter the state&€™s database at the time of closing and print the appropriate certificate. Upon registration, the closer will obtain a User ID and PIN to allow access to the database.

Database, Counseling and Printing Certificates

Each lender subject to the Act which is making a loan must enter its loan information into the database at the time of the loan application and underwriting. Then the database will indicate whether counseling is required. If no counseling is required then the transaction is approved to close and is eligible for a Certificate of Compliance.

If counseling is required, the borrowers will be given a list of counseling agencies and instructions for reviewing their loan terms with one of the counseling agencies. Once counseling is complete, the counselor will enter that information into the database so that the transaction will be eligible for a Certificate of Compliance at closing. The borrower always retains the choice of whether to proceed with the transaction.

Counseling is required in the following instances:

  1. For purchase transactions where all borrowers are first-time homebuyers.

    2.  

  2. For purchase transactions or where the borrowers are refinancing a primary residence and the loan is a mortgage that includes one or more of the following features:
    1. Interest-only payments are permitted.

      2.  

    2. The loan may result in negative amortization.

      3.  

    3. The total points and fees will exceed 5% of the loan amount.

      4.  

    4. There is a prepayment penalty.

      5.  

    5. The loan is an adjustable rate mortgage allowing adjustments of the interest rate in the first three years.

At closing, the closing agent must enter the loan terms into the database and the database will compare those terms to those entered by the lender. If there has been no material change as defined by the Act, then the transaction is ready to close. Closing agents may make non-material changes to correct errors. A certificate of compliance may then be printed. If there are material changes, then the database will determine whether the new loan terms require counseling. If not, then the loan may close with a Certificate of Compliance. If so, then the borrower must engage in another round of counseling to be eligible to close.

Please feel free to also contact ATG with any questions on this extension of the Illinois Anti-Predatory Lending Database atapl@atgf.comor 312.752.1984. Remember, the first step is tonotify ATGto initiate registration with the State of Illinois.

[Last update: 6-29-10]

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