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Illinois: Amendment to the Residential Mortgage License Act of 1987

Posted By USFN, Friday, July 24, 2015
Updated: Friday, September 25, 2015

July 24, 2015

 

by Lee Perres and Jill Rein
Pierce & Associates, P.C. – USFN Member (Illinois)

Last year, the Second District Court of Appeals for Illinois found that a mortgage, which was originated in violation of the Residential Mortgage Licensing Act of 1987 (Licensing Act), was void against public policy. [First Mortgage Company, LLC v. Dina, 2014 IL App. (2d) 130567 (2d Dist. Mar. 31, 2014; modified upon denial of reh’g May 22, 2014)].

Specifically, the Second District Court of Appeals found that when a mortgage was originated by a party who was not authorized under the Licensing Act, nor fell into one of the Licensing Act’s exceptions, the defendant could challenge the mortgage as void, and such challenge could be raised at any time.

On July 23, 2015 the governor of Illinois signed Public Act 99-0113 into law, which amends the Licensing Act. It is effective immediately. The amendment to the Licensing Act provides that a mortgage loan brokered, funded, originated, serviced, or purchased by a party who is not licensed shall not be held to be invalid solely on the basis of specified violations of the Licensing Act.

Editor’s Note: The authors’ firm joined in lobbying efforts to overturn the Dina decision.

©Copyright 2015 USFN and Pierce & Associates, P.C. All rights reserved.
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