Sec. 2. As used in this Act:.

348 words·~2 min read·/il/chapter-815/act-120/2

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Sec. 2. As used in this Act:

(a)"Financial Institution" means any bank, credit union, insurance company, mortgage banking company, savings bank, savings and loan association, or other residential mortgage lender which operates or has a place of business in this State.

(b)"Person" means any natural person.

(c)"Varying the terms of a loan" includes, but is not limited to the following practices:

(1)Requiring a greater than average down payment than is usual for the particular type

of a loan involved.

(2)Requiring a shorter period of amortization than is usual for the particular type of

loan involved.

(3)Charging a higher interest rate than is usual for the particular type of loan

involved.

(4)An underappraisal of real estate or other item of property offered as security.

(d)"Equity stripping" means to assist a person in obtaining a loan secured by the person's principal residence for the primary purpose of receiving fees related to the financing when

(i)the loan decreased the person's equity in the principal residence and

(ii)at the time the loan is made, the financial institution does not reasonably believe that the person will be able to make the scheduled payments to repay the loan. "Equity stripping" does not include reverse mortgages as defined in Section 5a of the Illinois Banking Act, Section 1-6a of the Illinois Savings and Loan Act of 1985, or subsection

(3)of Section 46 of the Illinois Credit Union Act.

(e)"Loan flipping" means to assist a person in refinancing a loan secured by the person's principal residence for the primary purpose of receiving fees related to the refinancing when

(i)the refinancing of the loan results in no tangible benefit to the person and

(ii)at the time the loan is made, the financial institution does not reasonably believe that the refinancing of the loan will result in a tangible benefit to the person.

(f)"Principal residence" means a person's primary residence that is a dwelling consisting of 4 or fewer family units or that is in a dwelling consisting of condominium or cooperative units.