Illinois State-Specific Laws and Regulations
What this domain tests
Illinois questions cover the Residential Mortgage License Act, IDFPR oversight, MLO licensing through NMLS, the Predatory Lending Database, Illinois fair housing and consumer protection, and continuing education.
Core rules
- Regulator: The Illinois Department of Financial and Professional Regulation, Division of Banking, licenses mortgage loan originators and residential mortgage licensees.
- Licensing: Obtain an MLO license through NMLS with a sponsoring licensee. Illinois requires 20 hours of pre-licensure education with Illinois law content, a background check, and 8 hours of annual continuing education that includes Illinois-specific content.
- Predatory Lending Database: Covered residential loans in designated areas or circumstances require data submission. High-risk loans require borrower counseling and a certificate before closing.
- Illinois Human Rights Act: Protected classes include race, color, religion, sex, national origin, ancestry, age 40 and over, marital status, disability, military status, sexual orientation, gender identity, pregnancy, and order of protection status.
- Consumer Fraud Act: Prohibits deceptive mortgage advertising and lending practices.
Worked example
A borrower purchases a home in a covered Chicago ZIP code. Before closing, the originator must submit the loan information to the Predatory Lending Database. Because the loan meets the high-risk test, the borrower must complete housing counseling and obtain a certificate. Without the certificate, the loan cannot close; late counseling delays closing and is not a waiver.
Traps
Assuming Illinois protects only the federal classes; ignoring the Predatory Lending Database because the loan is FHA; advertising without the licensed name; treating NMLS registration as a substitute for an Illinois license.