10.25.17   •   Document Updates

Document Updates: Various Illinois Documents

On October 6, 2017 the Illinois Department of Financial and Professional Regulation adopted various amendments and repeals to Ill. Admin. Code tit. 38, Pt. 1050. These include the following provisions, for which we provide documents:

Amended Provisions

  • Admin. Code tit. 38, § 1050.810
    • IL First Payment Letter Enhanced Fees (Cx7606)
  • Admin. Code tit. 38, § 1050.820
    • Notice of Servicing Transfer (Cx17905)
  • Admin. Code tit. 38, § 1050.1010
    • IL Loan Brokerage Agreement (Cx1909)
  • Admin. Code tit. 38, § 1050.1110
    • IL Borrower Information Document (Cx1206)
    • IL Mortgage Escrow Account Act (Cx1207)
    • IL Pledged Time Deposit Account Disclosure – Example (Cx14180)
  • Admin. Code tit. 38, § 1050.1320
    • IL GFE Charges Paid by Seller (Cx13000)

Repealed Provisions

  • Admin. Code tit. 38, § 1050.1230
    • IL Failure to Qualify Notice (Cx1603)
    • IL Notice of Change Affecting Loan (Cx1605)
  • Admin. Code tit. 38, § 1050.1305
    • IL Loan Approval Notice (Cx14271)

Due to these changes, we will be modifying the following documents as follows:

  • IL Borrower Information Document (Cx1206)
    • Configuring language and references related to the “Good Faith Estimate” and “Settlement Cost Booklet” to only print when Field 82233 (Integrated Disclosure Loan Indicator) equals “No.” When this field equals “Yes,” the language referring and applicable to the “Loan Estimate” and “Your home loan toolkit” will print instead.
    • Fixing the reference to the Illinois Mortgage Escrow Account Act from “205 Ill. Comp Stat. Ann. 910” to “765 Ill. Comp. Stat. Ann. 910”.
    • Making the phrase “A Truth-in-Lending statement will also be delivered to you shortly” more generic, by replacing it with “Other disclosures required under the Federal Truth in Lending Act may also be delivered to you shortly.”
    • Removing a reference to a “sample commitment letter,” since borrowers no longer have a right to request this type of document.
  • IL Loan Brokerage Agreement (Cx1909)
    • Configuring the title “Good Faith Estimate” which appears in Section 4 to only print when Field 82233 (Integrated Disclosure Loan Indicator) equals “No.” When this field equals “Yes,” the title “Loan Estimate” will print instead.
    • Removing the word “same” from the last sentence, since borrowers and brokers are no longer required to sign this document on the same date.
  • IL First Payment Letter Enhanced Fees (Cx7606)
    • Removing the third paragraph, as this language is no longer required to be disclosed.

We will also be retiring Cx1603, Cx1605, and Cx14271, as these documents are no longer required under Illinois law. Those clients who have custom configurations for these documents will continue to receive them.

We have reviewed the other documents which are required under the amended provisions (Cx1207, Cx13000, Cx14180, and Cx17905) and determined that no changes are necessary for them.

Special Note Concerning Cx13000: The requirements for this document have been amended to state the following:

“With respect to FHA-insured or VA-guaranteed residential mortgage loans, the licensee shall provide, at time of application, a written good faith estimate or TILA-RESPA Integrated Loan Estimate Disclosure of the amounts and nature of charges to be paid that are disallowed by the applicable Federal agency for payment by the buyer. A clear and conspicuous statement shall disclose that such charges are disallowed by the applicable Federal agency for payment by the borrower. Examples of such charges may include, but are not limited to, tax service fee, assignment fee, underwriter fee.” (Ill. Admin. Code tit. 38, § 1050.1320[b]; amended at 41 Ill. Reg. 12405 [October 6, 2017])

It is not possible to list charges “disallowed by the applicable Federal agency for payment by the buyer” on the Loan Estimate without violating Regulation Z, since the only charges permitted to be disclosed are those “that the consumer will pay” (see various provisions under 12 CFR § 1026.37[f] & [g]) or which are “paid by or imposed on the consumer” (Ibid. § 1026.19[e][3][i]). It is also not possible to modify the Loan Estimate to include “a clear and conspicuous statement” disclosing that such charges are disallowed (see Ibid. § 1026.37[o]).

Since the regulation gives the option of disclosing such fees on a “good faith estimate” (note the common form of the noun, which permits any type of form to be used which includes good faith estimates, as opposed to the proper form “Good Faith Estimate”) or on a Loan Estimate, we will continue to provide Cx13000 for this requirement.

These changes will take effect on November 1, 2017. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.

DR 245248