The Illinois Mortgage Escrow Act (the “Act”) was recently amended under Illinois House Bill 2717, which updated language in Sections 5 and Section 7. DocMagic is updating its version of the Illinois Mortgage Escrow Act disclosure (DocMagic Form ID: ILMEA.MSC) to include the revised language.
The disclosure is required for purchase loans of single-family owner occupied residences, See 765 ILCS 910/1-910/15; 38 IL ADC 1050.1110(f).
Changes in the form include updating Section 5 related to borrower election to terminate an escrow account. Section 5 will be relabeled as Section 5(a), and new Section 5(b) will be added. Section 5(b) reads as “Notwithstanding the requirements in subsection (a), a mortgage lender that complies with the escrow account requirements in Title 12 CFR Part 1026, as amended, for a mortgage loan that is a higher-priced mortgage loan, as defined in Title 12 CFR Part 1026, as amended, is deemed to be in compliance with subsection (a).”
Additionally, a sentence has been added to the end of Section 7, regarding termination of rights of borrower not applicable to mortgages guaranteed by State or federal government, which reads, “The borrower shall not have the right to terminate any such arrangement under Section 5 in conjunction with a mortgage loan that is a higher-priced mortgage loan as defined in Title 12 CFR Part 1026, as amended, unless the borrower has met all of the conditions for cancellation of an escrow account for a higher-priced mortgage loan in Title 12 CFR Part 1026, as amended.”
For further information regarding the Illinois House Bill 2717, click here.
Updated form ILMEA.MSC will be available in production as of January 11, 2024. If you have any questions regarding this article, please contact DocMagic’s Compliance Department.
