Several licensees and members of the general public have inquired as to whether loan modification services require a license issued by the Department. While the Department does not issue “advisory opinions” or dispense legal advice, the public’s interest in this subject merits this statement from the Department. Parties seeking a legal opinion should consult with their own attorney.
On July 31, 2009, Governor Pat Quinn signed HB 4011, the “Lessie Towns Act,” which permits Illinois to join the Nationwide Mortgage Licensing System and establishes tougher standards for loan originators. The Act, which took effect upon being signed, defines “mortgage loan originator” as “an individual who for compensation or gain or in the expectation of compensation or gain . . . offers or negotiates terms of a residential mortgage loan.” 205 ILCS 635/1-4(jj). Individuals who engage in loan modifications must obtain a license from the Department. 205 ILCS 635/7-1A(a).