By Nick Moroni
August 21, 2012
Tweaks to Illinois' 1987 Residential Mortgage License Act, signed into law last week by Gov. Pat Quinn, will give the state's regulatory department more resources to combat shady mortgage lenders who engage in fraud, according to the bill's supporters.
Under the new law--HB4521--mortgage lenders looking to become licensed will have to pay $657 more, or $2,700, for a license. What's more, the maximum fines for mortgage fraud jumped from $25,000 to $75,000.
Tom Feltner, vice president of Woodstock Institute, a Chicago-based housing advocacy group, noted that providing more resources to the Illinois Department of Financial and Professional Regulation, the body that regulates mortgage lending, is paramount to identifying fraud.
"By increasing the licensing fees, that’s going to give the department more resources to supervise mortgage companies and to enforce mortgage fraud protections," Feltner said.
The new law also requires mortgage lenders to submit to background checks, something that, previously, was only required of loan originators, said Susan Hofer, spokesperson for IDFPR.
The bill's Senate sponsor, 16th District state Sen. Jacqueline Collins, noted in a press release that the new law will also provide whistleblower protections to incentivize people to report alleged fraud.
"There’s a real need for whistleblower protections within organizations, so that [employees] can come forward when they’ve witnessed possible violations of the act," Feltner said.
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