Illinois Compiled Statutes 765 ILCS 77/73 – Standards for counseling
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A borrower or borrowers subject to this Article shall be recommended for counseling if, after reviewing the information in the predatory lending database submitted under Section 72, the Department finds the borrower or borrowers are all first-time homebuyers or refinancing a primary residence and the loan is a mortgage that includes one or more of the following:
(1) the loan permits interest only payments;
(2) the loan may result in negative amortization;
(3) the total points and fees payable by the borrower
(1) the loan permits interest only payments;
Terms Used In Illinois Compiled Statutes 765 ILCS 77/73
- Amortization: Paying off a loan by regular installments.
- ARM: means a closed-end mortgage transaction that allows adjustments of the loan interest rate during the first 3 years of the loan term. See Illinois Compiled Statutes 765 ILCS 77/70
- Borrower: means a person seeking a mortgage loan. See Illinois Compiled Statutes 765 ILCS 77/70
- Counseling: means in-person counseling provided by a counselor employed by a HUD-approved counseling agency to all borrowers, or documented telephone counseling where a hardship would be imposed on one or more borrowers. See Illinois Compiled Statutes 765 ILCS 77/70
- Department: means the Department of Financial and Professional Regulation. See Illinois Compiled Statutes 765 ILCS 77/70
- Interest only: means a closed-end loan that permits one or more payments of interest without any reduction of the principal balance of the loan, other than the first payment on the loan. See Illinois Compiled Statutes 765 ILCS 77/70
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Points and fees: has the meaning ascribed to that term in Section 10 of the High Risk Home Loan Act. See Illinois Compiled Statutes 765 ILCS 77/70
- Prepayment penalty: means a charge imposed by a lender under a mortgage note or rider when the loan is paid before the expiration of the term of the loan. See Illinois Compiled Statutes 765 ILCS 77/70
- Refinancing: means a loan secured by the borrower's or borrowers' primary residence where the proceeds are not used as purchase money for the residence. See Illinois Compiled Statutes 765 ILCS 77/70
(2) the loan may result in negative amortization;
(3) the total points and fees payable by the borrower
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at or before closing will exceed 5%;
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(4) the loan includes a prepayment penalty; or
(5) the loan is an ARM.
(5) the loan is an ARM.