The FAQ answers are provided solely as APLD guidance and are not to be viewed as legal written interpretations of the Illinois Department of Financial and Professional Regulation.
Question: Who is IDFPR working with to protect consumers?
IDFPR is working with the Governor, legislators, consumer groups and the lending industry to develop and implement programs that protect consumers while ensuring the continuing vitality of the mortgage industry.
Question: What are the goals of the Anti-Predatory Lending Database Program?
The APLD is designed to increase borrowers’ knowledge about loans they are considering and to reduce the number of foreclosures resulting from inappropriate loans. The database will collect information about mortgage loans in Cook County and determine whether or not each particular borrower needs to attend housing counseling provided by a HUD-certified/approved housing counselor.
Question: What if the counselor advises against taking a particular loan?
The decision whether to proceed with a loan is entirely that of the borrower who may accept or reject the advice of the counselor. The APLD is designed to provide borrowers with the knowledge necessary to make informed financial decisions and thereby protect themselves, their families, and their homes.
Question: How long will a counseling session be?
The law does not specify the length of counseling sessions, but sets forth the items that must be covered to ensure that the counseling will be meaningful to the borrower. An average session may last 1 - 2 hours.
Question: Does providing personal confidential data to the State create a security risk?
Mortgage brokers typically share borrowers’ personal financial information with various lenders through secure electronic systems in order to obtain the best possible mortgage for the borrower. IDFPR will include such security features in the APLD and take all necessary action to protect confidential information. Only specifically designated and trained agency personnel will be granted access to view and evaluate this information.
Question: How can I verify if an entity is really exempt?
Banks and Credit Unions may be verified through The National Information Center. Go to www.ffiec.gov and click on "National Info Center". Licensees of IDFPR can be verified through the IDFPR website at www.idfpr.com. Click on "Banking", and then click on Banking License Lookup".
Question: Does an exempt entity need to register with the database?
Generally, no. However, there is one exception. If the entity plans to close any of its loans in-house, it must obtain a password as a closer in order to generate the required exempt certificate.
Question: Must all loans in which the points and fees exceed 5% be classified as High Cost loans pursuant to the Illinois High Risk Home Loan Act?
No. The Illinois High Risk Home Loan Act (HRHLA), 815 ILCS 137, is a separate and distinct statute from the APLD with its own requirements. The APLD points and fees calculation is used solely as a standard for counseling. To determine whether a loan is High Cost, refer to the HRHLA and follow the procedures therein.
Question: What property is eligible for Government Property exemption?
Pursuant to the requirements of the Illinois Anti-Predatory Lending Database Program ("APLD") mortgage loans secured by government property are classified as exempt transactions. However, there appears to be confusion as to the meaning of "Government Property". Government property would be a facility which contains government offices or from which a government function takes place. Examples include, but are not limited to, the Thompson Center, Daley Center, Secretary of State Driver's License facilities, City Hall, court houses, police and fire stations, federal buildings. All levels of buildings from local to federal are included. Residential properties including HUD homes are NOT classified as government property as no government function takes place there. Mortgage loans secured by such properties are subject to all the data entry, counseling, and closing agent requirements set forth by the APLD. Such transactions may be exempt for various reasons such as having been originated by a bank or being purchased by an investor, but the "Government Property" exemption does not apply.
Question: How are points and fees calculated by the broker/originator? How are points and fees calculated by the closing agent?
(Dividend): 800 fields from HUD-1 containing prepaid finance charges paid to lender, mortgage broker, and affiliates + supplemental fields corresponding to HUD-1 Section 1300 including all such fees POC + yield spread premium paid to mortgage broker (Include in Line 801) + the maximum prepayment fees and penalties that may be charged or collected under the terms of the credit transaction + all prepayment fees or penalties that are incurred by the consumer if the loan refinances a previous loan made or currently held by the same creditor or an affiliate of the creditor + premiums or other charges payable at or before closing or financed directly or indirectly into the loan for any credit life, credit disability, credit unemployment, credit property, other accident, loss of income, life or health insurance or payments directly or indirectly for any debt cancellation or suspension agreement or contract + real estate related fees paid to an affiliate or for which the creditor receives compensation + certain bona fide discount points.
Denominator (Divisor): Principal amount of new loan from line 202 minus 800 fields containing prepaid finance charges paid to lender, mortgage broker, and affiliates + supplemental fields corresponding to HUD-1 Section 1300 including all such fees POC.
Quotient: Numerator divided by Denominator = Points and fees %
Notes: 1. Since closing credits may be taken into account, the broker/originator should include in the calculation only those fees actually being paid by the borrower from borrowers’ funds. YSP is always included in the calculation. FHA upfront MIP and VA funding fees are not included in the calculation 2. Fees paid directly by the borrower to third parties not affiliated with the broker or lender are not included unless (i) The broker or lender requires use of the third party as a condition of or an incident to the loan, even if the consumer can choose the third party; or (ii) the broker or lender retains a portion of the third-party charge, to the extent of the portion retained. 12 CFR 226.4(a)(1). 3. Insurance premiums or debt cancellation or suspension fees calculated and paid in full on a monthly basis shall not be considered financed by the creditor and are not included in the calculation. 4. Real estate related fees include title fees, survey, document prep, notary, credit reports, appraisals, and home inspections. 5. Bona fide discount points over 2 if interest rate without any discount does not exceed APOR by more than 1 percentage point; or, bona fide discount points over 1 if interest rate without any discount does not exceed APOR by more than 2 points. APOR = Average Prime Offer Rate.
Question: How much time do I have to enter my loan into the database?
All loans must be entered within a ten business day window after its origination.
Question: What names must appear on the APLD Certificates?
Names on the certificates must include the Lender and at least one of the borrowers.
Question: Must I input income when entering an FHA Streamline Loan?
FHA Streamline Refinances are not exempt under Illinois law from the requirement to enter borrower income information. It is not acceptable to enter a nominal amount such as $1.00 as borrower income. You must enter the borrowers actual income (as provided by the borrower or estimated from the borrowers information).
Question: Who is responsible for the cost of counseling?
The mortgage broker is responsible for the counseling cost, which cannot exceed $300.00
Question: What is the new procedure for filing Lis Pendens with the Illinois Department of Financial and Professional Regulation?
Please be advised that pursuant to Public Act SB 2677, all Lis Pendens notices are now required to be filed electronically with the Department of Financial and Professional Regulation. Due to efficiencies and savings realized in filing Lis Pendens notices electronically, most filers had earlier transitioned to this method upon the Department’s launch of electronic filing in October 2014. For further information please contact; Linda Dorsey, firstname.lastname@example.org, 312-793-4044.
Question: Who are the HUD-certified/approved counseling agencies?