(a) For purposes of this Section,
     “Homeownership Preservation Program” means

Terms Used In Illinois Compiled Statutes 765 ILCS 910/6.5

  • Escrow: Money given to a third party to be held for payment until certain conditions are met.
  • Federal Reserve System: The central bank of the United States. The Fed, as it is commonly called, regulates the U.S. monetary and financial system. The Federal Reserve System is composed of a central governmental agency in Washington, D.C. (the Board of Governors) and twelve regional Federal Reserve Banks in major cities throughout the United States. Source: OCC
  • Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC
  • State: when applied to different parts of the United States, may be construed to include the District of Columbia and the several territories, and the words "United States" may be construed to include the said district and territories. See Illinois Compiled Statutes 5 ILCS 70/1.14
  • Truth in Lending Act: The Truth in Lending Act is a federal law that requires lenders to provide standardized information so that borrowers can compare loan terms. In general, lenders must provide information on Source: OCC

         (1) a program that is expressly intended to assist
    
homeowners by refinancing or restructuring existing mortgage obligations either (i) to avoid default or foreclosure, or both, or (ii) to lower interest rates, and that is sponsored by a federal, state, or local government authority or a non-profit organization; or
        (2) a lender-sponsored program that is expressly
    
intended to assist homeowners by restructuring existing mortgage obligations to avoid default or foreclosure, or both.
    “Subprime Mortgage Lender” means a mortgage lender that has, for at least 2 of the prior 3 reporting years, reported the rate spread, as required under 12 C.F.R. ? 203.4(a)(12), for at least 75% of the loans reported by the mortgage lender in the Loan/Application Register filed in compliance with the federal Home Mortgage Disclosure Act, 12 U.S.C. § 2801 et seq., and implementing Regulation C, 12 C.F.R. § 201 et seq.
     (b) Section 6 shall not apply:
         (1) to a mortgage loan made by a subprime mortgage
    
lender in compliance with the requirements for higher-priced mortgage loans established in Regulation Z 12 C.F.R. part 226, issued by the Board of Governors of the Federal Reserve System to implement the federal Truth in Lending Act, whether or not the mortgage loan is a higher-priced mortgage loan, provided that:
            (A) for loans that are not higher-priced mortgage
        
loans, the escrow account must be terminated upon the borrower’s request at no cost to the borrower; and
            (B) for loans that are higher-priced mortgage
        
loans, the escrow account must be terminated upon the borrower’s request at no cost to the borrower on terms no stricter than the following conditions:
                (i) the escrow termination requirements
            
established in Regulation Z are satisfied;
                (ii) the borrower has maintained a
            
satisfactory payment history (no payments more than 30 days late) for the 12 months prior to the mortgage lender’s receipt of the borrower’s termination request; and
                (iii) the borrower has reimbursed the
            
mortgage lender for any escrow advances or escrow deficiencies existing at the time of the borrower’s termination request.
        (2) to a refinance or modification made by a subprime
    
mortgage lender under a homeownership preservation program that requires establishment of an escrow account as a condition or requirement of the refinance or modification, provided that the escrow account must be terminated upon the borrower’s request at no cost to the borrower on terms no stricter than the following conditions:
            (A) termination is permitted under the terms of
        
the government or non-profit sponsored homeownership preservation program, if applicable, and the borrower complies with all conditions or requirements for termination established by or allowed under such program;
            (B) the borrower has maintained a satisfactory
        
payment history (no payments more than 30 days late) for the 12 months prior to the mortgage lender’s receipt of the borrower’s termination request; and
            (C) the borrower has reimbursed the mortgage
        
lender for any escrow advances or escrow deficiencies existing at the time of the borrower’s termination request.
    Termination may not be denied for failure to reimburse escrow advances or escrow deficiencies under item (iii) of subparagraph (B) of paragraph (1) of subsection (b), or subparagraph (C) of paragraph (2) of subsection (b) if the borrower claims, in writing, that there is an error with such advances or deficiencies. In such case, the lender must terminate the escrow account if all other conditions of termination are satisfied; however, such termination will not alter or affect any other rights of the mortgage lender or the borrower with respect to the collection of such escrow advances or escrow deficiencies.
  Previous section
Next section  
 765 ILCS 910 Contents