IL MLO cheat sheet

RESPA Section 8 bars paying or receiving anything of value for referrals of settlement service business; Section 10 caps escrow account surpluses at one-sixth of annual disbursements and requires annual escrow statements.

TILA/Regulation Z requires disclosure of the finance charge and APR before consummation; the finance charge includes interest, points, mortgage broker fees, and PMI premiums, but excludes the appraisal and title fees when bona fide and not required by the creditor.

ECOA/Regulation B prohibits discrimination on race, color, religion, national origin, sex, marital status, age, receipt of public assistance, or good-faith exercise of CCPA rights, and requires written adverse action notice within 30 days of a completed application.

High-cost mortgage triggers under HOEPA/Reg Z Section 1026.32 include points and fees exceeding 5 percent of the loan amount for loans of $20,000 or more, a prepayment penalty more than 36 months after closing, or an APR exceeding the average prime offer rate by 6.5 percentage points on a first lien.

Ability-to-repay/QM rules under Reg Z Section 1026.43 require verification of eight underwriting factors; the general QM uses a 43 percent DTI threshold and the price-based QM uses a pricing cutoff relative to the APOR.

Flood Disaster Protection Act requires flood insurance for improved structures in Special Flood Hazard Areas when the loan is federally related; the borrower must receive notice and the coverage must equal the lesser of the outstanding principal balance or the maximum NFIP limit.

SAFE Act requires mortgage loan originators to be registered in NMLS, pass a qualifying test, complete pre-licensing education, and renew annually with continuing education.

FHA requires MIP on all forward mortgages: upfront MIP of 1.75 percent of the base loan amount plus annual MIP collected monthly; VA guarantees a portion of the loan and limits borrower-paid fees, while USDA charges upfront and annual guarantee fees.

HMDA/Regulation C requires covered institutions to collect and report loan-level data including loan type, purpose, occupancy, amount, rate spread, and applicant demographics, with annual reporting by March 1.

Loan-to-value (LTV) = loan amount ÷ lesser of property value or purchase price; combined LTV (CLTV) = (first lien + subordinate lien) ÷ property value.

Front-end ratio = housing expense (PITI) ÷ gross monthly income; back-end ratio = total monthly obligations (PITI plus other debt) ÷ gross monthly income.

PITI = principal + interest + property taxes + hazard insurance; when an escrow account is used, divide annual tax and insurance amounts by 12 to get the monthly figure.

Amortization: monthly payment on a fully amortizing fixed-rate loan = P × [r(1+r)^n] ÷ [(1+r)^n − 1], where r is the monthly rate and n is the number of payments.

Conventional loans are not government insured; conforming loans meet Fannie Mae/Freddie Mac limits, while non-conforming (jumbo) loans exceed them and typically require higher credit and larger down payments.

Fixed-rate loans keep the same rate and payment for the life of the loan; adjustable-rate loans have an initial fixed period, then adjust by an index plus margin, subject to periodic and lifetime caps.

Points are prepaid interest: one discount point equals 1 percent of the loan amount; paying points lowers the note rate, and the breakeven period equals points paid divided by the monthly payment savings.

Interest-only and balloon loans have lower initial payments but require a balloon payoff or payment shock at the end of the term; negative amortization occurs when the payment is less than the interest due and the unpaid interest is added to principal.

PMI is generally required when the LTV exceeds 80 percent on a conventional loan; under the Homeowners Protection Act it must terminate at 78 percent LTV based on the original amortization schedule, or earlier at the borrower's request at 80 percent LTV.

A complete application under Reg B consists of the borrower's name, income, Social Security number, property address, and estimated value; the 30-day adverse action clock starts when these are received.

The Loan Estimate must be delivered or placed in the mail within 3 business days of the application and at least 7 business days before consummation; the Closing Disclosure must be received at least 3 business days before consummation.

Changed circumstances that increase costs require a revised Loan Estimate within 3 business days of learning of the change and must be delivered no later than 4 business days before consummation.

A tolerance violation occurs when the actual closing costs exceed the disclosed amounts beyond allowed limits: zero tolerance for lender fees and services the borrower cannot shop for, 10 percent cumulative for services the borrower can shop for, and unlimited tolerance for prepaid interest and escrow deposits.

The intent to proceed may be given verbally or in writing; fees may not be collected before the borrower receives the Loan Estimate and expresses intent to proceed, except a reasonable credit report fee.

Documentation standards: verify income with pay stubs and W-2s or tax returns, assets with statements, and employment with a verbal or written verification; self-employed borrowers generally require two years of returns and a year-to-date profit-and-loss statement.

The appraisal must be obtained in compliance with the appraisal independence rules; the borrower must receive a copy of the appraisal promptly and no later than 3 days before closing.

NMLS registration is required for individual MLOs, who must provide their unique identifier on loan documents and disclose it to the borrower; the identifier must appear on the Loan Estimate and Closing Disclosure.

Steering is directing a borrower to a loan with less favorable terms for the originator's gain; it violates ECOA and the SAFE Act and is prohibited even when the borrower qualifies for the loan received.

Undisclosed compensation, referral fees, fee splitting, and unearned fees violate RESPA Section 8 and the SAFE Act; compensation may not be based on the terms of the loan other than the loan amount.

The Fair Housing Act prohibits discrimination in the sale, rental, and financing of housing based on race, color, religion, sex, national origin, familial status, or disability.

Predatory lending indicators include excessive fees, prepayment penalties, loan flipping, equity stripping, asset-based lending without regard to repayment ability, and repeated refinancing that provides no net tangible benefit.

Confidentiality: nonpublic personal information may be shared only with proper authorization or as permitted by the Gramm-Leach-Bliley Act privacy rules; the borrower must receive a privacy notice.

Fraud indicators include income or asset documents that appear altered, occupancy misrepresentation (claiming a primary residence for an investment property), and undisclosed debts; originators must report suspected fraud rather than ignore it.

Dual compensation (receiving compensation from both the borrower and the lender on the same transaction) is prohibited for mortgage brokers under Reg Z, and compensation may not vary with loan terms.

An originator who has a conflict of interest must disclose it and may not act in a way that puts personal gain ahead of the borrower's interest; a borrower's informed choice must be documented.

The Illinois Residential Mortgage License Act of 1987 (IRMLA) governs mortgage loan licensees; the Illinois Department of Financial and Professional Regulation (IDFPR), Division of Banking, administers licensing and examinations.

Illinois MLOs must be licensed through NMLS, complete 20 hours of pre-licensing education (including 3 hours of Illinois-specific education), pass the national and state tests, and complete 8 hours of annual continuing education.

The Illinois High Risk Home Loan Act (predatory lending database program) covers high-risk home loans as defined by rate and fee triggers and requires the loan to be entered into the predatory lending database and reviewed by a certified counselor or attorney before closing.

The Illinois Community Reinvestment Act and the Residential Mortgage License Act require fair lending practices; the Illinois Human Rights Act prohibits housing discrimination on the same protected classes as the federal Fair Housing Act.

Illinois requires the Mortgage Loan Originator to provide a written disclosure of the borrower's right to receive a copy of the appraisal and to disclose any affiliated business arrangements under RESPA.

Illinois law restricts prepayment penalties and prohibits certain fees on high-risk home loans; the state also requires that the licensee maintain records and make them available to IDFPR for examination.

License renewal in Illinois occurs annually through NMLS; licenses expire on December 31 unless renewed, and late renewal or operating without a license subjects the licensee to fines and license revocation.

Illinois advertising rules require the licensed name and NMLS unique identifier on advertisements and prohibit misleading statements about rates, terms, or the entity's status as a licensee.

RESPA Section 8 bars paying or receiving anything of value for referrals of settlement service business; Section 10 caps escrow account surpluses at one-sixth of annual disbursements and requires annual escrow statements.

TILA/Regulation Z requires disclosure of the finance charge and APR before consummation; the finance charge includes interest, points, mortgage broker fees, and PMI premiums, but excludes the appraisal and title fees when bona fide and not required by the creditor.

ECOA/Regulation B prohibits discrimination on race, color, religion, national origin, sex, marital status, age, receipt of public assistance, or good-faith exercise of CCPA rights, and requires written adverse action notice within 30 days of a completed application.

High-cost mortgage triggers under HOEPA/Reg Z Section 1026.32 include points and fees exceeding 5 percent of the loan amount for loans of $20,000 or more, a prepayment penalty more than 36 months after closing, or an APR exceeding the average prime offer rate by 6.5 percentage points on a first lien.

Ability-to-repay/QM rules under Reg Z Section 1026.43 require verification of eight underwriting factors; the general QM uses a 43 percent DTI threshold and the price-based QM uses a pricing cutoff relative to the APOR.

Flood Disaster Protection Act requires flood insurance for improved structures in Special Flood Hazard Areas when the loan is federally related; the borrower must receive notice and the coverage must equal the lesser of the outstanding principal balance or the maximum NFIP limit.

SAFE Act requires mortgage loan originators to be registered in NMLS, pass a qualifying test, complete pre-licensing education, and renew annually with continuing education.

FHA requires MIP on all forward mortgages: upfront MIP of 1.75 percent of the base loan amount plus annual MIP collected monthly; VA guarantees a portion of the loan and limits borrower-paid fees, while USDA charges upfront and annual guarantee fees.

HMDA/Regulation C requires covered institutions to collect and report loan-level data including loan type, purpose, occupancy, amount, rate spread, and applicant demographics, with annual reporting by March 1.

Loan-to-value (LTV) = loan amount ÷ lesser of property value or purchase price; combined LTV (CLTV) = (first lien + subordinate lien) ÷ property value.

Front-end ratio = housing expense (PITI) ÷ gross monthly income; back-end ratio = total monthly obligations (PITI plus other debt) ÷ gross monthly income.

PITI = principal + interest + property taxes + hazard insurance; when an escrow account is used, divide annual tax and insurance amounts by 12 to get the monthly figure.

Amortization: monthly payment on a fully amortizing fixed-rate loan = P × [r(1+r)^n] ÷ [(1+r)^n − 1], where r is the monthly rate and n is the number of payments.

Conventional loans are not government insured; conforming loans meet Fannie Mae/Freddie Mac limits, while non-conforming (jumbo) loans exceed them and typically require higher credit and larger down payments.

Fixed-rate loans keep the same rate and payment for the life of the loan; adjustable-rate loans have an initial fixed period, then adjust by an index plus margin, subject to periodic and lifetime caps.

Points are prepaid interest: one discount point equals 1 percent of the loan amount; paying points lowers the note rate, and the breakeven period equals points paid divided by the monthly payment savings.

Interest-only and balloon loans have lower initial payments but require a balloon payoff or payment shock at the end of the term; negative amortization occurs when the payment is less than the interest due and the unpaid interest is added to principal.

PMI is generally required when the LTV exceeds 80 percent on a conventional loan; under the Homeowners Protection Act it must terminate at 78 percent LTV based on the original amortization schedule, or earlier at the borrower's request at 80 percent LTV.

A complete application under Reg B consists of the borrower's name, income, Social Security number, property address, and estimated value; the 30-day adverse action clock starts when these are received.

The Loan Estimate must be delivered or placed in the mail within 3 business days of the application and at least 7 business days before consummation; the Closing Disclosure must be received at least 3 business days before consummation.

Changed circumstances that increase costs require a revised Loan Estimate within 3 business days of learning of the change and must be delivered no later than 4 business days before consummation.

A tolerance violation occurs when the actual closing costs exceed the disclosed amounts beyond allowed limits: zero tolerance for lender fees and services the borrower cannot shop for, 10 percent cumulative for services the borrower can shop for, and unlimited tolerance for prepaid interest and escrow deposits.

The intent to proceed may be given verbally or in writing; fees may not be collected before the borrower receives the Loan Estimate and expresses intent to proceed, except a reasonable credit report fee.

Documentation standards: verify income with pay stubs and W-2s or tax returns, assets with statements, and employment with a verbal or written verification; self-employed borrowers generally require two years of returns and a year-to-date profit-and-loss statement.

The appraisal must be obtained in compliance with the appraisal independence rules; the borrower must receive a copy of the appraisal promptly and no later than 3 days before closing.

NMLS registration is required for individual MLOs, who must provide their unique identifier on loan documents and disclose it to the borrower; the identifier must appear on the Loan Estimate and Closing Disclosure.

Steering is directing a borrower to a loan with less favorable terms for the originator's gain; it violates ECOA and the SAFE Act and is prohibited even when the borrower qualifies for the loan received.

Undisclosed compensation, referral fees, fee splitting, and unearned fees violate RESPA Section 8 and the SAFE Act; compensation may not be based on the terms of the loan other than the loan amount.

The Fair Housing Act prohibits discrimination in the sale, rental, and financing of housing based on race, color, religion, sex, national origin, familial status, or disability.

Predatory lending indicators include excessive fees, prepayment penalties, loan flipping, equity stripping, asset-based lending without regard to repayment ability, and repeated refinancing that provides no net tangible benefit.

Confidentiality: nonpublic personal information may be shared only with proper authorization or as permitted by the Gramm-Leach-Bliley Act privacy rules; the borrower must receive a privacy notice.

Fraud indicators include income or asset documents that appear altered, occupancy misrepresentation (claiming a primary residence for an investment property), and undisclosed debts; originators must report suspected fraud rather than ignore it.

Dual compensation (receiving compensation from both the borrower and the lender on the same transaction) is prohibited for mortgage brokers under Reg Z, and compensation may not vary with loan terms.

An originator who has a conflict of interest must disclose it and may not act in a way that puts personal gain ahead of the borrower's interest; a borrower's informed choice must be documented.

The Illinois Residential Mortgage License Act of 1987 (IRMLA) governs mortgage loan licensees; the Illinois Department of Financial and Professional Regulation (IDFPR), Division of Banking, administers licensing and examinations.

Illinois MLOs must be licensed through NMLS, complete 20 hours of pre-licensing education (including 3 hours of Illinois-specific education), pass the national and state tests, and complete 8 hours of annual continuing education.

The Illinois High Risk Home Loan Act (predatory lending database program) covers high-risk home loans as defined by rate and fee triggers and requires the loan to be entered into the predatory lending database and reviewed by a certified counselor or attorney before closing.

The Illinois Community Reinvestment Act and the Residential Mortgage License Act require fair lending practices; the Illinois Human Rights Act prohibits housing discrimination on the same protected classes as the federal Fair Housing Act.

Illinois requires the Mortgage Loan Originator to provide a written disclosure of the borrower's right to receive a copy of the appraisal and to disclose any affiliated business arrangements under RESPA.

Illinois law restricts prepayment penalties and prohibits certain fees on high-risk home loans; the state also requires that the licensee maintain records and make them available to IDFPR for examination.

License renewal in Illinois occurs annually through NMLS; licenses expire on December 31 unless renewed, and late renewal or operating without a license subjects the licensee to fines and license revocation.

Illinois advertising rules require the licensed name and NMLS unique identifier on advertisements and prohibit misleading statements about rates, terms, or the entity's status as a licensee.

RESPA Section 8 bars paying or receiving anything of value for referrals of settlement service business; Section 10 caps escrow account surpluses at one-sixth of annual disbursements and requires annual escrow statements.

TILA/Regulation Z requires disclosure of the finance charge and APR before consummation; the finance charge includes interest, points, mortgage broker fees, and PMI premiums, but excludes the appraisal and title fees when bona fide and not required by the creditor.

ECOA/Regulation B prohibits discrimination on race, color, religion, national origin, sex, marital status, age, receipt of public assistance, or good-faith exercise of CCPA rights, and requires written adverse action notice within 30 days of a completed application.

High-cost mortgage triggers under HOEPA/Reg Z Section 1026.32 include points and fees exceeding 5 percent of the loan amount for loans of $20,000 or more, a prepayment penalty more than 36 months after closing, or an APR exceeding the average prime offer rate by 6.5 percentage points on a first lien.

Ability-to-repay/QM rules under Reg Z Section 1026.43 require verification of eight underwriting factors; the general QM uses a 43 percent DTI threshold and the price-based QM uses a pricing cutoff relative to the APOR.

Flood Disaster Protection Act requires flood insurance for improved structures in Special Flood Hazard Areas when the loan is federally related; the borrower must receive notice and the coverage must equal the lesser of the outstanding principal balance or the maximum NFIP limit.

SAFE Act requires mortgage loan originators to be registered in NMLS, pass a qualifying test, complete pre-licensing education, and renew annually with continuing education.

FHA requires MIP on all forward mortgages: upfront MIP of 1.75 percent of the base loan amount plus annual MIP collected monthly; VA guarantees a portion of the loan and limits borrower-paid fees, while USDA charges upfront and annual guarantee fees.

HMDA/Regulation C requires covered institutions to collect and report loan-level data including loan type, purpose, occupancy, amount, rate spread, and applicant demographics, with annual reporting by March 1.

Loan-to-value (LTV) = loan amount ÷ lesser of property value or purchase price; combined LTV (CLTV) = (first lien + subordinate lien) ÷ property value.

Front-end ratio = housing expense (PITI) ÷ gross monthly income; back-end ratio = total monthly obligations (PITI plus other debt) ÷ gross monthly income.

PITI = principal + interest + property taxes + hazard insurance; when an escrow account is used, divide annual tax and insurance amounts by 12 to get the monthly figure.

Amortization: monthly payment on a fully amortizing fixed-rate loan = P × [r(1+r)^n] ÷ [(1+r)^n − 1], where r is the monthly rate and n is the number of payments.

Conventional loans are not government insured; conforming loans meet Fannie Mae/Freddie Mac limits, while non-conforming (jumbo) loans exceed them and typically require higher credit and larger down payments.

Fixed-rate loans keep the same rate and payment for the life of the loan; adjustable-rate loans have an initial fixed period, then adjust by an index plus margin, subject to periodic and lifetime caps.

Points are prepaid interest: one discount point equals 1 percent of the loan amount; paying points lowers the note rate, and the breakeven period equals points paid divided by the monthly payment savings.

Interest-only and balloon loans have lower initial payments but require a balloon payoff or payment shock at the end of the term; negative amortization occurs when the payment is less than the interest due and the unpaid interest is added to principal.

PMI is generally required when the LTV exceeds 80 percent on a conventional loan; under the Homeowners Protection Act it must terminate at 78 percent LTV based on the original amortization schedule, or earlier at the borrower's request at 80 percent LTV.

A complete application under Reg B consists of the borrower's name, income, Social Security number, property address, and estimated value; the 30-day adverse action clock starts when these are received.

The Loan Estimate must be delivered or placed in the mail within 3 business days of the application and at least 7 business days before consummation; the Closing Disclosure must be received at least 3 business days before consummation.

Changed circumstances that increase costs require a revised Loan Estimate within 3 business days of learning of the change and must be delivered no later than 4 business days before consummation.

A tolerance violation occurs when the actual closing costs exceed the disclosed amounts beyond allowed limits: zero tolerance for lender fees and services the borrower cannot shop for, 10 percent cumulative for services the borrower can shop for, and unlimited tolerance for prepaid interest and escrow deposits.

The intent to proceed may be given verbally or in writing; fees may not be collected before the borrower receives the Loan Estimate and expresses intent to proceed, except a reasonable credit report fee.

Documentation standards: verify income with pay stubs and W-2s or tax returns, assets with statements, and employment with a verbal or written verification; self-employed borrowers generally require two years of returns and a year-to-date profit-and-loss statement.

The appraisal must be obtained in compliance with the appraisal independence rules; the borrower must receive a copy of the appraisal promptly and no later than 3 days before closing.

NMLS registration is required for individual MLOs, who must provide their unique identifier on loan documents and disclose it to the borrower; the identifier must appear on the Loan Estimate and Closing Disclosure.

Steering is directing a borrower to a loan with less favorable terms for the originator's gain; it violates ECOA and the SAFE Act and is prohibited even when the borrower qualifies for the loan received.

Undisclosed compensation, referral fees, fee splitting, and unearned fees violate RESPA Section 8 and the SAFE Act; compensation may not be based on the terms of the loan other than the loan amount.

The Fair Housing Act prohibits discrimination in the sale, rental, and financing of housing based on race, color, religion, sex, national origin, familial status, or disability.

Predatory lending indicators include excessive fees, prepayment penalties, loan flipping, equity stripping, asset-based lending without regard to repayment ability, and repeated refinancing that provides no net tangible benefit.

Confidentiality: nonpublic personal information may be shared only with proper authorization or as permitted by the Gramm-Leach-Bliley Act privacy rules; the borrower must receive a privacy notice.

Fraud indicators include income or asset documents that appear altered, occupancy misrepresentation (claiming a primary residence for an investment property), and undisclosed debts; originators must report suspected fraud rather than ignore it.

Dual compensation (receiving compensation from both the borrower and the lender on the same transaction) is prohibited for mortgage brokers under Reg Z, and compensation may not vary with loan terms.

An originator who has a conflict of interest must disclose it and may not act in a way that puts personal gain ahead of the borrower's interest; a borrower's informed choice must be documented.

The Illinois Residential Mortgage License Act of 1987 (IRMLA) governs mortgage loan licensees; the Illinois Department of Financial and Professional Regulation (IDFPR), Division of Banking, administers licensing and examinations.

Illinois MLOs must be licensed through NMLS, complete 20 hours of pre-licensing education (including 3 hours of Illinois-specific education), pass the national and state tests, and complete 8 hours of annual continuing education.

The Illinois High Risk Home Loan Act (predatory lending database program) covers high-risk home loans as defined by rate and fee triggers and requires the loan to be entered into the predatory lending database and reviewed by a certified counselor or attorney before closing.

The Illinois Community Reinvestment Act and the Residential Mortgage License Act require fair lending practices; the Illinois Human Rights Act prohibits housing discrimination on the same protected classes as the federal Fair Housing Act.

Illinois requires the Mortgage Loan Originator to provide a written disclosure of the borrower's right to receive a copy of the appraisal and to disclose any affiliated business arrangements under RESPA.

Illinois law restricts prepayment penalties and prohibits certain fees on high-risk home loans; the state also requires that the licensee maintain records and make them available to IDFPR for examination.

License renewal in Illinois occurs annually through NMLS; licenses expire on December 31 unless renewed, and late renewal or operating without a license subjects the licensee to fines and license revocation.

Illinois advertising rules require the licensed name and NMLS unique identifier on advertisements and prohibit misleading statements about rates, terms, or the entity's status as a licensee.

RESPA Section 8 bars paying or receiving anything of value for referrals of settlement service business; Section 10 caps escrow account surpluses at one-sixth of annual disbursements and requires annual escrow statements.

TILA/Regulation Z requires disclosure of the finance charge and APR before consummation; the finance charge includes interest, points, mortgage broker fees, and PMI premiums, but excludes the appraisal and title fees when bona fide and not required by the creditor.

ECOA/Regulation B prohibits discrimination on race, color, religion, national origin, sex, marital status, age, receipt of public assistance, or good-faith exercise of CCPA rights, and requires written adverse action notice within 30 days of a completed application.

High-cost mortgage triggers under HOEPA/Reg Z Section 1026.32 include points and fees exceeding 5 percent of the loan amount for loans of $20,000 or more, a prepayment penalty more than 36 months after closing, or an APR exceeding the average prime offer rate by 6.5 percentage points on a first lien.

Ability-to-repay/QM rules under Reg Z Section 1026.43 require verification of eight underwriting factors; the general QM uses a 43 percent DTI threshold and the price-based QM uses a pricing cutoff relative to the APOR.

Flood Disaster Protection Act requires flood insurance for improved structures in Special Flood Hazard Areas when the loan is federally related; the borrower must receive notice and the coverage must equal the lesser of the outstanding principal balance or the maximum NFIP limit.

SAFE Act requires mortgage loan originators to be registered in NMLS, pass a qualifying test, complete pre-licensing education, and renew annually with continuing education.

FHA requires MIP on all forward mortgages: upfront MIP of 1.75 percent of the base loan amount plus annual MIP collected monthly; VA guarantees a portion of the loan and limits borrower-paid fees, while USDA charges upfront and annual guarantee fees.

HMDA/Regulation C requires covered institutions to collect and report loan-level data including loan type, purpose, occupancy, amount, rate spread, and applicant demographics, with annual reporting by March 1.

Loan-to-value (LTV) = loan amount ÷ lesser of property value or purchase price; combined LTV (CLTV) = (first lien + subordinate lien) ÷ property value.

Front-end ratio = housing expense (PITI) ÷ gross monthly income; back-end ratio = total monthly obligations (PITI plus other debt) ÷ gross monthly income.

PITI = principal + interest + property taxes + hazard insurance; when an escrow account is used, divide annual tax and insurance amounts by 12 to get the monthly figure.

Amortization: monthly payment on a fully amortizing fixed-rate loan = P × [r(1+r)^n] ÷ [(1+r)^n − 1], where r is the monthly rate and n is the number of payments.

Conventional loans are not government insured; conforming loans meet Fannie Mae/Freddie Mac limits, while non-conforming (jumbo) loans exceed them and typically require higher credit and larger down payments.

Fixed-rate loans keep the same rate and payment for the life of the loan; adjustable-rate loans have an initial fixed period, then adjust by an index plus margin, subject to periodic and lifetime caps.

Points are prepaid interest: one discount point equals 1 percent of the loan amount; paying points lowers the note rate, and the breakeven period equals points paid divided by the monthly payment savings.

Interest-only and balloon loans have lower initial payments but require a balloon payoff or payment shock at the end of the term; negative amortization occurs when the payment is less than the interest due and the unpaid interest is added to principal.

PMI is generally required when the LTV exceeds 80 percent on a conventional loan; under the Homeowners Protection Act it must terminate at 78 percent LTV based on the original amortization schedule, or earlier at the borrower's request at 80 percent LTV.

A complete application under Reg B consists of the borrower's name, income, Social Security number, property address, and estimated value; the 30-day adverse action clock starts when these are received.

The Loan Estimate must be delivered or placed in the mail within 3 business days of the application and at least 7 business days before consummation; the Closing Disclosure must be received at least 3 business days before consummation.

Changed circumstances that increase costs require a revised Loan Estimate within 3 business days of learning of the change and must be delivered no later than 4 business days before consummation.

A tolerance violation occurs when the actual closing costs exceed the disclosed amounts beyond allowed limits: zero tolerance for lender fees and services the borrower cannot shop for, 10 percent cumulative for services the borrower can shop for, and unlimited tolerance for prepaid interest and escrow deposits.

The intent to proceed may be given verbally or in writing; fees may not be collected before the borrower receives the Loan Estimate and expresses intent to proceed, except a reasonable credit report fee.

Documentation standards: verify income with pay stubs and W-2s or tax returns, assets with statements, and employment with a verbal or written verification; self-employed borrowers generally require two years of returns and a year-to-date profit-and-loss statement.

The appraisal must be obtained in compliance with the appraisal independence rules; the borrower must receive a copy of the appraisal promptly and no later than 3 days before closing.

NMLS registration is required for individual MLOs, who must provide their unique identifier on loan documents and disclose it to the borrower; the identifier must appear on the Loan Estimate and Closing Disclosure.

Steering is directing a borrower to a loan with less favorable terms for the originator's gain; it violates ECOA and the SAFE Act and is prohibited even when the borrower qualifies for the loan received.

Undisclosed compensation, referral fees, fee splitting, and unearned fees violate RESPA Section 8 and the SAFE Act; compensation may not be based on the terms of the loan other than the loan amount.

The Fair Housing Act prohibits discrimination in the sale, rental, and financing of housing based on race, color, religion, sex, national origin, familial status, or disability.

Predatory lending indicators include excessive fees, prepayment penalties, loan flipping, equity stripping, asset-based lending without regard to repayment ability, and repeated refinancing that provides no net tangible benefit.

Confidentiality: nonpublic personal information may be shared only with proper authorization or as permitted by the Gramm-Leach-Bliley Act privacy rules; the borrower must receive a privacy notice.

Fraud indicators include income or asset documents that appear altered, occupancy misrepresentation (claiming a primary residence for an investment property), and undisclosed debts; originators must report suspected fraud rather than ignore it.

Dual compensation (receiving compensation from both the borrower and the lender on the same transaction) is prohibited for mortgage brokers under Reg Z, and compensation may not vary with loan terms.

An originator who has a conflict of interest must disclose it and may not act in a way that puts personal gain ahead of the borrower's interest; a borrower's informed choice must be documented.

The Illinois Residential Mortgage License Act of 1987 (IRMLA) governs mortgage loan licensees; the Illinois Department of Financial and Professional Regulation (IDFPR), Division of Banking, administers licensing and examinations.

Illinois MLOs must be licensed through NMLS, complete 20 hours of pre-licensing education (including 3 hours of Illinois-specific education), pass the national and state tests, and complete 8 hours of annual continuing education.

The Illinois High Risk Home Loan Act (predatory lending database program) covers high-risk home loans as defined by rate and fee triggers and requires the loan to be entered into the predatory lending database and reviewed by a certified counselor or attorney before closing.

The Illinois Community Reinvestment Act and the Residential Mortgage License Act require fair lending practices; the Illinois Human Rights Act prohibits housing discrimination on the same protected classes as the federal Fair Housing Act.

Illinois requires the Mortgage Loan Originator to provide a written disclosure of the borrower's right to receive a copy of the appraisal and to disclose any affiliated business arrangements under RESPA.

Illinois law restricts prepayment penalties and prohibits certain fees on high-risk home loans; the state also requires that the licensee maintain records and make them available to IDFPR for examination.

License renewal in Illinois occurs annually through NMLS; licenses expire on December 31 unless renewed, and late renewal or operating without a license subjects the licensee to fines and license revocation.

Illinois advertising rules require the licensed name and NMLS unique identifier on advertisements and prohibit misleading statements about rates, terms, or the entity's status as a licensee.

RESPA Section 8 bars paying or receiving anything of value for referrals of settlement service business; Section 10 caps escrow account surpluses at one-sixth of annual disbursements and requires annual escrow statements.

TILA/Regulation Z requires disclosure of the finance charge and APR before consummation; the finance charge includes interest, points, mortgage broker fees, and PMI premiums, but excludes the appraisal and title fees when bona fide and not required by the creditor.

ECOA/Regulation B prohibits discrimination on race, color, religion, national origin, sex, marital status, age, receipt of public assistance, or good-faith exercise of CCPA rights, and requires written adverse action notice within 30 days of a completed application.

High-cost mortgage triggers under HOEPA/Reg Z Section 1026.32 include points and fees exceeding 5 percent of the loan amount for loans of $20,000 or more, a prepayment penalty more than 36 months after closing, or an APR exceeding the average prime offer rate by 6.5 percentage points on a first lien.

Ability-to-repay/QM rules under Reg Z Section 1026.43 require verification of eight underwriting factors; the general QM uses a 43 percent DTI threshold and the price-based QM uses a pricing cutoff relative to the APOR.

Flood Disaster Protection Act requires flood insurance for improved structures in Special Flood Hazard Areas when the loan is federally related; the borrower must receive notice and the coverage must equal the lesser of the outstanding principal balance or the maximum NFIP limit.

SAFE Act requires mortgage loan originators to be registered in NMLS, pass a qualifying test, complete pre-licensing education, and renew annually with continuing education.

FHA requires MIP on all forward mortgages: upfront MIP of 1.75 percent of the base loan amount plus annual MIP collected monthly; VA guarantees a portion of the loan and limits borrower-paid fees, while USDA charges upfront and annual guarantee fees.

HMDA/Regulation C requires covered institutions to collect and report loan-level data including loan type, purpose, occupancy, amount, rate spread, and applicant demographics, with annual reporting by March 1.

Loan-to-value (LTV) = loan amount ÷ lesser of property value or purchase price; combined LTV (CLTV) = (first lien + subordinate lien) ÷ property value.

Front-end ratio = housing expense (PITI) ÷ gross monthly income; back-end ratio = total monthly obligations (PITI plus other debt) ÷ gross monthly income.

PITI = principal + interest + property taxes + hazard insurance; when an escrow account is used, divide annual tax and insurance amounts by 12 to get the monthly figure.

Amortization: monthly payment on a fully amortizing fixed-rate loan = P × [r(1+r)^n] ÷ [(1+r)^n − 1], where r is the monthly rate and n is the number of payments.

Conventional loans are not government insured; conforming loans meet Fannie Mae/Freddie Mac limits, while non-conforming (jumbo) loans exceed them and typically require higher credit and larger down payments.

Fixed-rate loans keep the same rate and payment for the life of the loan; adjustable-rate loans have an initial fixed period, then adjust by an index plus margin, subject to periodic and lifetime caps.

Points are prepaid interest: one discount point equals 1 percent of the loan amount; paying points lowers the note rate, and the breakeven period equals points paid divided by the monthly payment savings.

Interest-only and balloon loans have lower initial payments but require a balloon payoff or payment shock at the end of the term; negative amortization occurs when the payment is less than the interest due and the unpaid interest is added to principal.

PMI is generally required when the LTV exceeds 80 percent on a conventional loan; under the Homeowners Protection Act it must terminate at 78 percent LTV based on the original amortization schedule, or earlier at the borrower's request at 80 percent LTV.

A complete application under Reg B consists of the borrower's name, income, Social Security number, property address, and estimated value; the 30-day adverse action clock starts when these are received.

The Loan Estimate must be delivered or placed in the mail within 3 business days of the application and at least 7 business days before consummation; the Closing Disclosure must be received at least 3 business days before consummation.

Changed circumstances that increase costs require a revised Loan Estimate within 3 business days of learning of the change and must be delivered no later than 4 business days before consummation.

A tolerance violation occurs when the actual closing costs exceed the disclosed amounts beyond allowed limits: zero tolerance for lender fees and services the borrower cannot shop for, 10 percent cumulative for services the borrower can shop for, and unlimited tolerance for prepaid interest and escrow deposits.

The intent to proceed may be given verbally or in writing; fees may not be collected before the borrower receives the Loan Estimate and expresses intent to proceed, except a reasonable credit report fee.

Documentation standards: verify income with pay stubs and W-2s or tax returns, assets with statements, and employment with a verbal or written verification; self-employed borrowers generally require two years of returns and a year-to-date profit-and-loss statement.

The appraisal must be obtained in compliance with the appraisal independence rules; the borrower must receive a copy of the appraisal promptly and no later than 3 days before closing.

NMLS registration is required for individual MLOs, who must provide their unique identifier on loan documents and disclose it to the borrower; the identifier must appear on the Loan Estimate and Closing Disclosure.

Steering is directing a borrower to a loan with less favorable terms for the originator's gain; it violates ECOA and the SAFE Act and is prohibited even when the borrower qualifies for the loan received.

Undisclosed compensation, referral fees, fee splitting, and unearned fees violate RESPA Section 8 and the SAFE Act; compensation may not be based on the terms of the loan other than the loan amount.

The Fair Housing Act prohibits discrimination in the sale, rental, and financing of housing based on race, color, religion, sex, national origin, familial status, or disability.

Predatory lending indicators include excessive fees, prepayment penalties, loan flipping, equity stripping, asset-based lending without regard to repayment ability, and repeated refinancing that provides no net tangible benefit.

Confidentiality: nonpublic personal information may be shared only with proper authorization or as permitted by the Gramm-Leach-Bliley Act privacy rules; the borrower must receive a privacy notice.

Fraud indicators include income or asset documents that appear altered, occupancy misrepresentation (claiming a primary residence for an investment property), and undisclosed debts; originators must report suspected fraud rather than ignore it.

Dual compensation (receiving compensation from both the borrower and the lender on the same transaction) is prohibited for mortgage brokers under Reg Z, and compensation may not vary with loan terms.

An originator who has a conflict of interest must disclose it and may not act in a way that puts personal gain ahead of the borrower's interest; a borrower's informed choice must be documented.

The Illinois Residential Mortgage License Act of 1987 (IRMLA) governs mortgage loan licensees; the Illinois Department of Financial and Professional Regulation (IDFPR), Division of Banking, administers licensing and examinations.

Illinois MLOs must be licensed through NMLS, complete 20 hours of pre-licensing education (including 3 hours of Illinois-specific education), pass the national and state tests, and complete 8 hours of annual continuing education.

The Illinois High Risk Home Loan Act (predatory lending database program) covers high-risk home loans as defined by rate and fee triggers and requires the loan to be entered into the predatory lending database and reviewed by a certified counselor or attorney before closing.

The Illinois Community Reinvestment Act and the Residential Mortgage License Act require fair lending practices; the Illinois Human Rights Act prohibits housing discrimination on the same protected classes as the federal Fair Housing Act.

Illinois requires the Mortgage Loan Originator to provide a written disclosure of the borrower's right to receive a copy of the appraisal and to disclose any affiliated business arrangements under RESPA.

Illinois law restricts prepayment penalties and prohibits certain fees on high-risk home loans; the state also requires that the licensee maintain records and make them available to IDFPR for examination.

License renewal in Illinois occurs annually through NMLS; licenses expire on December 31 unless renewed, and late renewal or operating without a license subjects the licensee to fines and license revocation.

Illinois advertising rules require the licensed name and NMLS unique identifier on advertisements and prohibit misleading statements about rates, terms, or the entity's status as a licensee.

RESPA Section 8 bars paying or receiving anything of value for referrals of settlement service business; Section 10 caps escrow account surpluses at one-sixth of annual disbursements and requires annual escrow statements.

TILA/Regulation Z requires disclosure of the finance charge and APR before consummation; the finance charge includes interest, points, mortgage broker fees, and PMI premiums, but excludes the appraisal and title fees when bona fide and not required by the creditor.

ECOA/Regulation B prohibits discrimination on race, color, religion, national origin, sex, marital status, age, receipt of public assistance, or good-faith exercise of CCPA rights, and requires written adverse action notice within 30 days of a completed application.

High-cost mortgage triggers under HOEPA/Reg Z Section 1026.32 include points and fees exceeding 5 percent of the loan amount for loans of $20,000 or more, a prepayment penalty more than 36 months after closing, or an APR exceeding the average prime offer rate by 6.5 percentage points on a first lien.

Ability-to-repay/QM rules under Reg Z Section 1026.43 require verification of eight underwriting factors; the general QM uses a 43 percent DTI threshold and the price-based QM uses a pricing cutoff relative to the APOR.

Flood Disaster Protection Act requires flood insurance for improved structures in Special Flood Hazard Areas when the loan is federally related; the borrower must receive notice and the coverage must equal the lesser of the outstanding principal balance or the maximum NFIP limit.

SAFE Act requires mortgage loan originators to be registered in NMLS, pass a qualifying test, complete pre-licensing education, and renew annually with continuing education.

FHA requires MIP on all forward mortgages: upfront MIP of 1.75 percent of the base loan amount plus annual MIP collected monthly; VA guarantees a portion of the loan and limits borrower-paid fees, while USDA charges upfront and annual guarantee fees.

HMDA/Regulation C requires covered institutions to collect and report loan-level data including loan type, purpose, occupancy, amount, rate spread, and applicant demographics, with annual reporting by March 1.

Loan-to-value (LTV) = loan amount ÷ lesser of property value or purchase price; combined LTV (CLTV) = (first lien + subordinate lien) ÷ property value.

Front-end ratio = housing expense (PITI) ÷ gross monthly income; back-end ratio = total monthly obligations (PITI plus other debt) ÷ gross monthly income.

PITI = principal + interest + property taxes + hazard insurance; when an escrow account is used, divide annual tax and insurance amounts by 12 to get the monthly figure.

Amortization: monthly payment on a fully amortizing fixed-rate loan = P × [r(1+r)^n] ÷ [(1+r)^n − 1], where r is the monthly rate and n is the number of payments.

Conventional loans are not government insured; conforming loans meet Fannie Mae/Freddie Mac limits, while non-conforming (jumbo) loans exceed them and typically require higher credit and larger down payments.

Fixed-rate loans keep the same rate and payment for the life of the loan; adjustable-rate loans have an initial fixed period, then adjust by an index plus margin, subject to periodic and lifetime caps.

Points are prepaid interest: one discount point equals 1 percent of the loan amount; paying points lowers the note rate, and the breakeven period equals points paid divided by the monthly payment savings.

Interest-only and balloon loans have lower initial payments but require a balloon payoff or payment shock at the end of the term; negative amortization occurs when the payment is less than the interest due and the unpaid interest is added to principal.

PMI is generally required when the LTV exceeds 80 percent on a conventional loan; under the Homeowners Protection Act it must terminate at 78 percent LTV based on the original amortization schedule, or earlier at the borrower's request at 80 percent LTV.

A complete application under Reg B consists of the borrower's name, income, Social Security number, property address, and estimated value; the 30-day adverse action clock starts when these are received.

The Loan Estimate must be delivered or placed in the mail within 3 business days of the application and at least 7 business days before consummation; the Closing Disclosure must be received at least 3 business days before consummation.

Changed circumstances that increase costs require a revised Loan Estimate within 3 business days of learning of the change and must be delivered no later than 4 business days before consummation.

A tolerance violation occurs when the actual closing costs exceed the disclosed amounts beyond allowed limits: zero tolerance for lender fees and services the borrower cannot shop for, 10 percent cumulative for services the borrower can shop for, and unlimited tolerance for prepaid interest and escrow deposits.

The intent to proceed may be given verbally or in writing; fees may not be collected before the borrower receives the Loan Estimate and expresses intent to proceed, except a reasonable credit report fee.

Documentation standards: verify income with pay stubs and W-2s or tax returns, assets with statements, and employment with a verbal or written verification; self-employed borrowers generally require two years of returns and a year-to-date profit-and-loss statement.

The appraisal must be obtained in compliance with the appraisal independence rules; the borrower must receive a copy of the appraisal promptly and no later than 3 days before closing.

NMLS registration is required for individual MLOs, who must provide their unique identifier on loan documents and disclose it to the borrower; the identifier must appear on the Loan Estimate and Closing Disclosure.

Steering is directing a borrower to a loan with less favorable terms for the originator's gain; it violates ECOA and the SAFE Act and is prohibited even when the borrower qualifies for the loan received.

Undisclosed compensation, referral fees, fee splitting, and unearned fees violate RESPA Section 8 and the SAFE Act; compensation may not be based on the terms of the loan other than the loan amount.

The Fair Housing Act prohibits discrimination in the sale, rental, and financing of housing based on race, color, religion, sex, national origin, familial status, or disability.

Predatory lending indicators include excessive fees, prepayment penalties, loan flipping, equity stripping, asset-based lending without regard to repayment ability, and repeated refinancing that provides no net tangible benefit.

Confidentiality: nonpublic personal information may be shared only with proper authorization or as permitted by the Gramm-Leach-Bliley Act privacy rules; the borrower must receive a privacy notice.

Fraud indicators include income or asset documents that appear altered, occupancy misrepresentation (claiming a primary residence for an investment property), and undisclosed debts; originators must report suspected fraud rather than ignore it.

Dual compensation (receiving compensation from both the borrower and the lender on the same transaction) is prohibited for mortgage brokers under Reg Z, and compensation may not vary with loan terms.

An originator who has a conflict of interest must disclose it and may not act in a way that puts personal gain ahead of the borrower's interest; a borrower's informed choice must be documented.

The Illinois Residential Mortgage License Act of 1987 (IRMLA) governs mortgage loan licensees; the Illinois Department of Financial and Professional Regulation (IDFPR), Division of Banking, administers licensing and examinations.

Illinois MLOs must be licensed through NMLS, complete 20 hours of pre-licensing education (including 3 hours of Illinois-specific education), pass the national and state tests, and complete 8 hours of annual continuing education.

The Illinois High Risk Home Loan Act (predatory lending database program) covers high-risk home loans as defined by rate and fee triggers and requires the loan to be entered into the predatory lending database and reviewed by a certified counselor or attorney before closing.

The Illinois Community Reinvestment Act and the Residential Mortgage License Act require fair lending practices; the Illinois Human Rights Act prohibits housing discrimination on the same protected classes as the federal Fair Housing Act.

Illinois requires the Mortgage Loan Originator to provide a written disclosure of the borrower's right to receive a copy of the appraisal and to disclose any affiliated business arrangements under RESPA.

Illinois law restricts prepayment penalties and prohibits certain fees on high-risk home loans; the state also requires that the licensee maintain records and make them available to IDFPR for examination.

License renewal in Illinois occurs annually through NMLS; licenses expire on December 31 unless renewed, and late renewal or operating without a license subjects the licensee to fines and license revocation.

Illinois advertising rules require the licensed name and NMLS unique identifier on advertisements and prohibit misleading statements about rates, terms, or the entity's status as a licensee.

RESPA Section 8 bars paying or receiving anything of value for referrals of settlement service business; Section 10 caps escrow account surpluses at one-sixth of annual disbursements and requires annual escrow statements.

TILA/Regulation Z requires disclosure of the finance charge and APR before consummation; the finance charge includes interest, points, mortgage broker fees, and PMI premiums, but excludes the appraisal and title fees when bona fide and not required by the creditor.

ECOA/Regulation B prohibits discrimination on race, color, religion, national origin, sex, marital status, age, receipt of public assistance, or good-faith exercise of CCPA rights, and requires written adverse action notice within 30 days of a completed application.

High-cost mortgage triggers under HOEPA/Reg Z Section 1026.32 include points and fees exceeding 5 percent of the loan amount for loans of $20,000 or more, a prepayment penalty more than 36 months after closing, or an APR exceeding the average prime offer rate by 6.5 percentage points on a first lien.

Ability-to-repay/QM rules under Reg Z Section 1026.43 require verification of eight underwriting factors; the general QM uses a 43 percent DTI threshold and the price-based QM uses a pricing cutoff relative to the APOR.

Flood Disaster Protection Act requires flood insurance for improved structures in Special Flood Hazard Areas when the loan is federally related; the borrower must receive notice and the coverage must equal the lesser of the outstanding principal balance or the maximum NFIP limit.

SAFE Act requires mortgage loan originators to be registered in NMLS, pass a qualifying test, complete pre-licensing education, and renew annually with continuing education.

FHA requires MIP on all forward mortgages: upfront MIP of 1.75 percent of the base loan amount plus annual MIP collected monthly; VA guarantees a portion of the loan and limits borrower-paid fees, while USDA charges upfront and annual guarantee fees.

HMDA/Regulation C requires covered institutions to collect and report loan-level data including loan type, purpose, occupancy, amount, rate spread, and applicant demographics, with annual reporting by March 1.

Loan-to-value (LTV) = loan amount ÷ lesser of property value or purchase price; combined LTV (CLTV) = (first lien + subordinate lien) ÷ property value.

Front-end ratio = housing expense (PITI) ÷ gross monthly income; back-end ratio = total monthly obligations (PITI plus other debt) ÷ gross monthly income.

PITI = principal + interest + property taxes + hazard insurance; when an escrow account is used, divide annual tax and insurance amounts by 12 to get the monthly figure.

Amortization: monthly payment on a fully amortizing fixed-rate loan = P × [r(1+r)^n] ÷ [(1+r)^n − 1], where r is the monthly rate and n is the number of payments.

Conventional loans are not government insured; conforming loans meet Fannie Mae/Freddie Mac limits, while non-conforming (jumbo) loans exceed them and typically require higher credit and larger down payments.

Fixed-rate loans keep the same rate and payment for the life of the loan; adjustable-rate loans have an initial fixed period, then adjust by an index plus margin, subject to periodic and lifetime caps.

Points are prepaid interest: one discount point equals 1 percent of the loan amount; paying points lowers the note rate, and the breakeven period equals points paid divided by the monthly payment savings.

Interest-only and balloon loans have lower initial payments but require a balloon payoff or payment shock at the end of the term; negative amortization occurs when the payment is less than the interest due and the unpaid interest is added to principal.

PMI is generally required when the LTV exceeds 80 percent on a conventional loan; under the Homeowners Protection Act it must terminate at 78 percent LTV based on the original amortization schedule, or earlier at the borrower's request at 80 percent LTV.

A complete application under Reg B consists of the borrower's name, income, Social Security number, property address, and estimated value; the 30-day adverse action clock starts when these are received.

The Loan Estimate must be delivered or placed in the mail within 3 business days of the application and at least 7 business days before consummation; the Closing Disclosure must be received at least 3 business days before consummation.

Changed circumstances that increase costs require a revised Loan Estimate within 3 business days of learning of the change and must be delivered no later than 4 business days before consummation.

A tolerance violation occurs when the actual closing costs exceed the disclosed amounts beyond allowed limits: zero tolerance for lender fees and services the borrower cannot shop for, 10 percent cumulative for services the borrower can shop for, and unlimited tolerance for prepaid interest and escrow deposits.

The intent to proceed may be given verbally or in writing; fees may not be collected before the borrower receives the Loan Estimate and expresses intent to proceed, except a reasonable credit report fee.

Documentation standards: verify income with pay stubs and W-2s or tax returns, assets with statements, and employment with a verbal or written verification; self-employed borrowers generally require two years of returns and a year-to-date profit-and-loss statement.

The appraisal must be obtained in compliance with the appraisal independence rules; the borrower must receive a copy of the appraisal promptly and no later than 3 days before closing.

NMLS registration is required for individual MLOs, who must provide their unique identifier on loan documents and disclose it to the borrower; the identifier must appear on the Loan Estimate and Closing Disclosure.

Steering is directing a borrower to a loan with less favorable terms for the originator's gain; it violates ECOA and the SAFE Act and is prohibited even when the borrower qualifies for the loan received.

Undisclosed compensation, referral fees, fee splitting, and unearned fees violate RESPA Section 8 and the SAFE Act; compensation may not be based on the terms of the loan other than the loan amount.

The Fair Housing Act prohibits discrimination in the sale, rental, and financing of housing based on race, color, religion, sex, national origin, familial status, or disability.

Predatory lending indicators include excessive fees, prepayment penalties, loan flipping, equity stripping, asset-based lending without regard to repayment ability, and repeated refinancing that provides no net tangible benefit.

Confidentiality: nonpublic personal information may be shared only with proper authorization or as permitted by the Gramm-Leach-Bliley Act privacy rules; the borrower must receive a privacy notice.

Fraud indicators include income or asset documents that appear altered, occupancy misrepresentation (claiming a primary residence for an investment property), and undisclosed debts; originators must report suspected fraud rather than ignore it.

Dual compensation (receiving compensation from both the borrower and the lender on the same transaction) is prohibited for mortgage brokers under Reg Z, and compensation may not vary with loan terms.

An originator who has a conflict of interest must disclose it and may not act in a way that puts personal gain ahead of the borrower's interest; a borrower's informed choice must be documented.

The Illinois Residential Mortgage License Act of 1987 (IRMLA) governs mortgage loan licensees; the Illinois Department of Financial and Professional Regulation (IDFPR), Division of Banking, administers licensing and examinations.

Illinois MLOs must be licensed through NMLS, complete 20 hours of pre-licensing education (including 3 hours of Illinois-specific education), pass the national and state tests, and complete 8 hours of annual continuing education.

The Illinois High Risk Home Loan Act (predatory lending database program) covers high-risk home loans as defined by rate and fee triggers and requires the loan to be entered into the predatory lending database and reviewed by a certified counselor or attorney before closing.

The Illinois Community Reinvestment Act and the Residential Mortgage License Act require fair lending practices; the Illinois Human Rights Act prohibits housing discrimination on the same protected classes as the federal Fair Housing Act.

Illinois requires the Mortgage Loan Originator to provide a written disclosure of the borrower's right to receive a copy of the appraisal and to disclose any affiliated business arrangements under RESPA.

Illinois law restricts prepayment penalties and prohibits certain fees on high-risk home loans; the state also requires that the licensee maintain records and make them available to IDFPR for examination.

License renewal in Illinois occurs annually through NMLS; licenses expire on December 31 unless renewed, and late renewal or operating without a license subjects the licensee to fines and license revocation.

Illinois advertising rules require the licensed name and NMLS unique identifier on advertisements and prohibit misleading statements about rates, terms, or the entity's status as a licensee.

RESPA Section 8 bars paying or receiving anything of value for referrals of settlement service business; Section 10 caps escrow account surpluses at one-sixth of annual disbursements and requires annual escrow statements.

TILA/Regulation Z requires disclosure of the finance charge and APR before consummation; the finance charge includes interest, points, mortgage broker fees, and PMI premiums, but excludes the appraisal and title fees when bona fide and not required by the creditor.

ECOA/Regulation B prohibits discrimination on race, color, religion, national origin, sex, marital status, age, receipt of public assistance, or good-faith exercise of CCPA rights, and requires written adverse action notice within 30 days of a completed application.

High-cost mortgage triggers under HOEPA/Reg Z Section 1026.32 include points and fees exceeding 5 percent of the loan amount for loans of $20,000 or more, a prepayment penalty more than 36 months after closing, or an APR exceeding the average prime offer rate by 6.5 percentage points on a first lien.

Ability-to-repay/QM rules under Reg Z Section 1026.43 require verification of eight underwriting factors; the general QM uses a 43 percent DTI threshold and the price-based QM uses a pricing cutoff relative to the APOR.

Flood Disaster Protection Act requires flood insurance for improved structures in Special Flood Hazard Areas when the loan is federally related; the borrower must receive notice and the coverage must equal the lesser of the outstanding principal balance or the maximum NFIP limit.

SAFE Act requires mortgage loan originators to be registered in NMLS, pass a qualifying test, complete pre-licensing education, and renew annually with continuing education.

FHA requires MIP on all forward mortgages: upfront MIP of 1.75 percent of the base loan amount plus annual MIP collected monthly; VA guarantees a portion of the loan and limits borrower-paid fees, while USDA charges upfront and annual guarantee fees.

HMDA/Regulation C requires covered institutions to collect and report loan-level data including loan type, purpose, occupancy, amount, rate spread, and applicant demographics, with annual reporting by March 1.

Loan-to-value (LTV) = loan amount ÷ lesser of property value or purchase price; combined LTV (CLTV) = (first lien + subordinate lien) ÷ property value.

Front-end ratio = housing expense (PITI) ÷ gross monthly income; back-end ratio = total monthly obligations (PITI plus other debt) ÷ gross monthly income.

PITI = principal + interest + property taxes + hazard insurance; when an escrow account is used, divide annual tax and insurance amounts by 12 to get the monthly figure.

Amortization: monthly payment on a fully amortizing fixed-rate loan = P × [r(1+r)^n] ÷ [(1+r)^n − 1], where r is the monthly rate and n is the number of payments.

Conventional loans are not government insured; conforming loans meet Fannie Mae/Freddie Mac limits, while non-conforming (jumbo) loans exceed them and typically require higher credit and larger down payments.

Fixed-rate loans keep the same rate and payment for the life of the loan; adjustable-rate loans have an initial fixed period, then adjust by an index plus margin, subject to periodic and lifetime caps.

Points are prepaid interest: one discount point equals 1 percent of the loan amount; paying points lowers the note rate, and the breakeven period equals points paid divided by the monthly payment savings.

Interest-only and balloon loans have lower initial payments but require a balloon payoff or payment shock at the end of the term; negative amortization occurs when the payment is less than the interest due and the unpaid interest is added to principal.

PMI is generally required when the LTV exceeds 80 percent on a conventional loan; under the Homeowners Protection Act it must terminate at 78 percent LTV based on the original amortization schedule, or earlier at the borrower's request at 80 percent LTV.

A complete application under Reg B consists of the borrower's name, income, Social Security number, property address, and estimated value; the 30-day adverse action clock starts when these are received.

The Loan Estimate must be delivered or placed in the mail within 3 business days of the application and at least 7 business days before consummation; the Closing Disclosure must be received at least 3 business days before consummation.

Changed circumstances that increase costs require a revised Loan Estimate within 3 business days of learning of the change and must be delivered no later than 4 business days before consummation.

A tolerance violation occurs when the actual closing costs exceed the disclosed amounts beyond allowed limits: zero tolerance for lender fees and services the borrower cannot shop for, 10 percent cumulative for services the borrower can shop for, and unlimited tolerance for prepaid interest and escrow deposits.

The intent to proceed may be given verbally or in writing; fees may not be collected before the borrower receives the Loan Estimate and expresses intent to proceed, except a reasonable credit report fee.

Documentation standards: verify income with pay stubs and W-2s or tax returns, assets with statements, and employment with a verbal or written verification; self-employed borrowers generally require two years of returns and a year-to-date profit-and-loss statement.

The appraisal must be obtained in compliance with the appraisal independence rules; the borrower must receive a copy of the appraisal promptly and no later than 3 days before closing.

NMLS registration is required for individual MLOs, who must provide their unique identifier on loan documents and disclose it to the borrower; the identifier must appear on the Loan Estimate and Closing Disclosure.

Steering is directing a borrower to a loan with less favorable terms for the originator's gain; it violates ECOA and the SAFE Act and is prohibited even when the borrower qualifies for the loan received.

Undisclosed compensation, referral fees, fee splitting, and unearned fees violate RESPA Section 8 and the SAFE Act; compensation may not be based on the terms of the loan other than the loan amount.

The Fair Housing Act prohibits discrimination in the sale, rental, and financing of housing based on race, color, religion, sex, national origin, familial status, or disability.

Predatory lending indicators include excessive fees, prepayment penalties, loan flipping, equity stripping, asset-based lending without regard to repayment ability, and repeated refinancing that provides no net tangible benefit.

Confidentiality: nonpublic personal information may be shared only with proper authorization or as permitted by the Gramm-Leach-Bliley Act privacy rules; the borrower must receive a privacy notice.

Fraud indicators include income or asset documents that appear altered, occupancy misrepresentation (claiming a primary residence for an investment property), and undisclosed debts; originators must report suspected fraud rather than ignore it.

Dual compensation (receiving compensation from both the borrower and the lender on the same transaction) is prohibited for mortgage brokers under Reg Z, and compensation may not vary with loan terms.

An originator who has a conflict of interest must disclose it and may not act in a way that puts personal gain ahead of the borrower's interest; a borrower's informed choice must be documented.

The Illinois Residential Mortgage License Act of 1987 (IRMLA) governs mortgage loan licensees; the Illinois Department of Financial and Professional Regulation (IDFPR), Division of Banking, administers licensing and examinations.

Illinois MLOs must be licensed through NMLS, complete 20 hours of pre-licensing education (including 3 hours of Illinois-specific education), pass the national and state tests, and complete 8 hours of annual continuing education.

The Illinois High Risk Home Loan Act (predatory lending database program) covers high-risk home loans as defined by rate and fee triggers and requires the loan to be entered into the predatory lending database and reviewed by a certified counselor or attorney before closing.

The Illinois Community Reinvestment Act and the Residential Mortgage License Act require fair lending practices; the Illinois Human Rights Act prohibits housing discrimination on the same protected classes as the federal Fair Housing Act.

Illinois requires the Mortgage Loan Originator to provide a written disclosure of the borrower's right to receive a copy of the appraisal and to disclose any affiliated business arrangements under RESPA.

Illinois law restricts prepayment penalties and prohibits certain fees on high-risk home loans; the state also requires that the licensee maintain records and make them available to IDFPR for examination.

License renewal in Illinois occurs annually through NMLS; licenses expire on December 31 unless renewed, and late renewal or operating without a license subjects the licensee to fines and license revocation.

Illinois advertising rules require the licensed name and NMLS unique identifier on advertisements and prohibit misleading statements about rates, terms, or the entity's status as a licensee.