Illinois License Law and Regulation (20%)

Question 1

The law also provides that loan processors and underwriters who work as ________ _________ must obtain a license as a mortgage loan originator and a unique identifier.

Answer 1

independent contractors

Question 2

The entities listed below are exempt from RMLA licensing requirements since they are regulated under other laws.

Answer 2

• Federal and State Banking Institutions Organized Under State or Federal Laws3
• Licensees under the Illinois Consumer Installment Loan Act
• Insurance Companies
• Commercial Mortgage Lenders
• Service Corporations of Certain Financial Institutions
• First Tier Subsidiaries of Federal and State-Chartered Banks
• Employees of Exempt Financial Institutions
• De Minimis Exemption (uses Own funds)
• Assistant to a Licensee
• Originators, Brokers, and Servicers that Are Not Compensated
• Loan Processors and Underwriters
• Real Estate Brokers
• Timeshare Creditors

Question 3

Using an MU4 form, the license applicant is also required to make disclosures about his/her financial circumstances. A license applicant must disclose on the MU4 form whether he/she has:

Answer 3

o Within the past ten years, filed a bankruptcy petition or been the subject of an involuntary bankruptcy petition
o Within the past ten years, exercised control over an organization that has filed a bankruptcy petition or been the subject of an involuntary bankruptcy action
o Ever had a bonding company deny, pay out, or revoke a bond
o Any unsatisfied judgments or liens pending

Question 4

The Director cannot issue a license to an applicant who has:

Answer 4

o Been convicted, pled guilty, or pled nolo contendere to a felony in a domestic, foreign, or military court within the seven-year period that precedes the date of the application
o Been convicted, at any time, of a felony involving an act of fraud, dishonesty, breach of trust, or money laundering

Question 5

The Director cannot issue a license to an applicant who fails to show that he/she is financially responsible (205 ILCS 635/7-3(3)). Failure to demonstrate financial responsibility includes:

Answer 5

o Current outstanding judgments, other than medical expenses
o Tax liens or other government liens
o Educational loan defaults
o Non-payment of child support
o Foreclosures in the past three years
o Pattern of seriously delinquent accounts within the past three years
o A poor credit report, although it cannot serve as the sole basis for denying a license

Question 6

Change in Information on the MU4 form: How many days

Answer 6

MLOs have a thirty-day deadline for providing written notification of changes in the information that he/she provided on the most recent license application

Question 7

License Revocations: days?

Answer 7

MLOs have ten calendar days to notify the IDFPR of a license revocation in another jurisdiction, of a conviction, guilty plea, or a plea of nolo contendere to a felony, or of an adverse judgment of $500.00 or more in any jurisdiction

Question 8

Residential mortgage licensees that employ MLOs have an obligation to notify the IDFPR within ____ days of the termination of an MLO

Answer 8

thirty

Question 9

Upon showing that an emergency exists, the Director has authority to suspend a license for ___ days. The Director can also take emergency response to violations of the law by issuing a cease and desist order

Answer 9

180

Question 10

How many hours of continuing education?

Answer 10

8 hours

Question 11

The net worth requirement for licensees under the RMLA is:

Answer 11

$150,000

Question 12

However, if the only activity that the licensee engages in is brokering of residential mortgage loans, the net worth requirement is:

Answer 12

$50,000

Question 13

The RMLA requires an applicant for a residential mortgage license to show that, prior to filing that application, the following individuals have had ____ _____ of experience in real estate finance:

Answer 13

-three years

 Members, if the applicant is a partnership or association
 Members or managers, if the applicant is a limited liability company, and if the members and managers retain authority or responsibility under the operating agreement
 Officers, if the applicant is a corporation

Question 14

Applicants for initial and renewal licenses as a residential mortgage licensee must submit “________,” which consistent of a list of twenty-six practices, prohibitions, and verifications regarding the applicant’s ethical and financial fitness for a license.

Answer 14

-averments

Question 15

A residential mortgage licensee must conduct the annual audit at the end of its fiscal year, but no more than _____ months after the previous audit. Filing of the audit report must take place within ______ days after the end of the licensee’s fiscal year and the licensee must file the report through the NMLS

Answer 15

• twelve

- ninety

Question 16

The filing of false or misleading financial statements is a business offense, subject to fines of no less than?

Answer 16

$5,000

Question 17

Each year, on or before March 1, residential mortgage licensees that must prepare the following annual reports and file them with the IDFPR on forms “…prescribed and obtained from the Director…”:

Answer 17

 Report of Mortgage Activity: This report is required of licensees that fund loans, and must include the number of loans applications, the number of loans funded, and the total dollar amount of loans funded.
 Report of Brokerage Activity: This report is required of licensees that broker loans and must include the identification of the lenders that funded loans, the total dollar amount of the loans funded loans by each lender, and the identity of lenders with whom the broker had mortgage brokerage agreements.
 Report of Servicing Activity: This report is required of licensees that service loans and it must report the number of loans that are in default or foreclosure. This report must include the names of the lenders that funded these loans.
 Report of Purchasing Activity: This report is required of licensees that purchase residential mortgage loans and must include the names of the “originating entities,” dollar amounts of each loan by property address, and the total amount for all Illinois loans purchased.

Question 18

The third annual reporting requirement for residential mortgage licensees is the submission of?

Answer 18

mortgage call reports

Question 19

Licensees must maintain written records for _________ months, and these must consist of “…the same written records as required by the federal Equal Credit Opportunity Act….”

Answer 19

thirty-six

Question 20

How long must licensees retain the records under the High Risk Home Loan Act>

Answer 20

Sixty months

Question 21

The IDFPR Administrative Rules require all licensees to maintain a ____ ____ of all loan applications received.

Answer 21

loan log

Question 22

Licensees that broker and originate loans must also keep a separate loan file for each loan application, and maintain the file for thirty-six months from the date of closing or for thirty-six months from any other final disposition of the application. Each loan file must include:

Answer 22

 Loan Brokerage Agreement and Loan Brokerage Disclosure Statement
 Borrower Information Document
 All documents signed by the borrower(s), including the loan application, disclosures, and closing documents
 The appraisal, credit report, and other third-party documents

Question 23

How many days?: Advise the Director of any judgments entered against the licensee or any bankruptcy petitions filed by the licensee

Answer 23

Within Five Days

Question 24

How many days?: Advise the Director and/or the NMLS of any changes in the information provided on the most recent application

Answer 24

30 days

Question 25

How many days?: Advise the Director of any requests made for the licensee to repurchase a loan, identifying the loans involved and the reason for the request

Answer 25

30 days