Topic: Anti-Predatory Lending Database
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Should the fee for a certificate of exemption from the Illinois anti-predatory lending database program be disclosed as a finance charge? The certificate of exemption is filed with the mortgage.
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No, we do not believe a certificate of exemption fee should be included in the finance charge calculation, provided that the fee is bona fide and reasonable in amount. In Cook, Kane, Peoria and Will counties, the Residential Real Property Disclosure Act requires an anti-predatory lending database program. In those Illinois counties, a title insurance…
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We read that the Illinois Department of Financial and Professional Regulation (IDFPR) repealed its rules regarding the Predatory Lending Database Program. Does this mean that a Certificate of Exemption is no longer required for covered transactions?
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No, a Certificate of Compliance or a Certificate of Exemption still needs to be filed for covered mortgages. You are correct that the IDFPR’s administrative rules for the Predatory Lending Database program were repealed, effective August 28, 2017. However, the law establishing this program — the Residential Real Property Disclosure Act (Act) — has not been repealed. The Act,…
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Does the predatory lending database program in Cook County apply to a loan secured by investment real estate? What about the Illinois High Risk Home Loan Act (HRHLA)? Also, does the predatory lending database points and fees test include more charges than the HRHLA? The predatory lending database program test for points and fees sets a threshold at 5%; does that rise to 8% for smaller loans, as under the HRHLA?
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No, the predatory lending database program would not apply to a mortgage secured by investment property. The Cook County predatory lending database program was established under the Residential Real Property Disclosure Act, which applies only to mortgages secured by residential real properties, defined as one-to-four family properties, units in residential cooperatives and condominium units. It…
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When a title company charges a fee for a certificate of compliance with the anti-predatory lending program in Cook County, is that fee considered a finance charge?
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No, a certificate of compliance fee likely should not be included in the finance charge calculation, subject to the discussion below. Regulation Z exempts certain real-estate related fees from the finance charge calculation, if the fees are bona fide and reasonable in amount. Fees for title examination, abstract of title, title insurance, property surveys, credit…
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Are there any special requirements that would apply to a commercial loan in Cook County?
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You may be thinking of special requirements for consumer residential mortgage loans recorded in Cook County imposed by the Residential Real Property Disclosure Act. (The Act has been expanded to Kane, Peoria, and Will counties.) The law set up an anti-predatory lending database program. Loan originators (and brokers) must supply detailed information about any loan…