IBA Compliance Connection

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Is the “Illinois Addendum to Residential Mortgage Loan Application” form required for a Home Equity Line of Credit (HELOC)? This form asks a borrower to indicate whether they are in a registered civil union. Also, is the “Illinois Signed Documents Disclosure” form required for a HELOC? This form requires the borrower to acknowledge that “it is your responsibility to obtain copies before mailing signed documents back to the licensee” under 38 Ill. Adm. Code 1050.1150.

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No, a bank is not required to use either of these forms in connection with a HELOC, although your bank may find them useful for the reasons discussed below.

The Illinois Addendum to Residential Mortgage Loan Application may be helpful for all residential real estate transactions, including HELOCs, in order to identify individuals who may have relevant property rights and interests (such as the homestead rights of an individual who has entered into a civil union with your borrower). 

The Illinois Signed Documents Disclosure fulfills a disclosure requirement in the Illinois Administrative Code that applies only to mortgage loan originators licensed under the Illinois Residential Mortgage License Act, which does not apply to banks or their employees. However, if you do not provide copies of signed documents mailed to your bank, it may be appropriate to notify applicants that they must obtain their own copies of signed documents before mailing them.

For resources related to our guidance, please see:

  • Illinois Religious Freedom Protection and Civil Union Act, 750 ILCS 75/20 (“A party to a civil union is entitled to the same legal obligations, responsibilities, protections, and benefits as are afforded or recognized by the law of Illinois to spouses, whether they derive from statute, administrative rule, policy, common law, or any other source of civil or criminal law.”)
  • Illinois Administrative Code, Residential Mortgagee License Act of 1987, 38 Ill. Adm. Code 1050.1150 (“The customer shall be provided, at the time of signing, a copy of each document he or she signs, except for releases for credit information and verifications of employment, bank accounts and current mortgage history. Forms furnished for application by mail shall carry a clear and conspicuous statement that it is the responsibility of the customer to obtain machine copies before mailing the signed documents back to the licensee.”)
  • Illinois Residential Mortgage License Act of 1987, 205 ILCS 635/1-3(a) (“No provision of this Act shall apply to an exempt person or entity as defined in items (1) and (1.5) of subsection (d) of Section 1-4 of this Act.”)
  • Illinois Residential Mortgage License Act of 1987, 205 ILCS 635/1-4(d)(1) (“‘Exempt person or entity’ shall mean the following: (1) . . . any national bank, federally chartered savings and loan association, federal savings bank, federal credit union; . . . any bank, savings and loan association, savings bank, or credit union organized under the laws of this or any other state; . . .”)