For consumer mortgage loans secured by the borrower’s principal residence, Illinois law prohibits lenders from requiring borrowers to use a particular title insurance company.

• The Title Insurance Act prohibits lenders from requiring a party to a contract for the sale of residential real property to use a particular title insurance company or agent. 215 ILCS 155/18.1. This provision is limited to purchase loans for “residential real property,” defined as a building with one to four residential units where at least one unit will be owner-occupied. 215 ILCS 155/3(14). The IDFPR confirmed this in its Statement Regarding Consumers’ Right to Choose Title Provider.

• The Consumer Fraud and Deceptive Business Practices Act prohibits lenders from requiring borrowers to use a particular title insurance insurer, agent, or broker, unless the lender has “reasonable grounds” to reject the title insurer because it will “afford insufficient protection to the lender.” 815 ILCS 505/2T. This provision is limited to loans secured by an owner-occupied single family residence or owner-occupied residential condominium unit.