"Buying a Home in Cook, Kane, Peoria or Will County: How Does the Illinois Lending Database Step Work, and Who Pays for the Counseling?"

If the home is in Cook, Kane, Peoria or Will County, Illinois runs your loan through a state database, and the step starts when your application is taken rather than at closing. If the state recommends housing counseling, you attend a session your loan originator is required to pay for, up to the cap the statute sets. The database then issues a certificate, and without it the county will not record your mortgage.

I'm Jeff Moran, a mortgage broker in Bluffton, South Carolina, originating since 1996, licensed in fifteen states, including Illinois, NMLS #483943, through C2 Financial Corporation. I write about the state rules that move money and days on a purchase. This Illinois program moves both, and it puts the cost of one required step on the originator rather than on you.

You are unlikely to hear the program's name while you are shopping. It shows up at the closing table as a certificate attached to the mortgage, and it reads like one more page in the stack. That page is the output of a step that started running around the week you applied. If it does not finish on time, your mortgage cannot be recorded until it does.

Which Illinois counties does the lending database cover?

Four of them, and the program is not statewide. So the first thing to settle is which county the home is in.

The Illinois Anti-Predatory Lending Database was created by the Predatory Lending Database article of the Residential Real Property Disclosure Act, 765 ILCS 77 Article 3. The IDFPR program fact sheet records the rollout: the program took effect in Cook County on July 1, 2008, and expanded to Kane, Peoria and Will counties on July 1, 2010. Those four counties are the program area. A purchase in Lake County or DuPage County does not go through it at all.

The Illinois Department of Financial and Professional Regulation supervises the program, and the database itself is at ilapld.com. The purpose the statute gives it is helping a client understand the terms of the loan they applied for, which is also why the sequence is built to run early rather than in closing week.

When does the database step start on your purchase?

It starts at your application, which is usually weeks before anything else in this article.

Under 765 ILCS 77/72, within 10 business days after taking your mortgage application, the broker or originator has to submit the required information to the database for any mortgage on residential property inside the program area. That submission includes identifying information, and it includes the income and monthly debt figures from your application.

The state then has 7 business days to compare what was submitted against the counseling standards in the statute and to issue a determination to you and to your originator, saying whether counseling is recommended.

There are two clocks there, and both of them belong to somebody other than you. Ten business days is two calendar weeks, and seven more is another week and a half. On a thirty day contract, an application that stays unsubmitted for the full ten days can push the determination into your closing week. That is a reason to start early rather than to worry once you are under contract, and one of several reasons mortgage pre-approval in Illinois is worth doing before you write an offer.

What decides whether the state recommends housing counseling?

Two things have to line up. One is who you are on this loan, and the other is what the loan itself looks like.

765 ILCS 77/73 sets the standards. The state recommends counseling when everyone on the loan is a first-time homebuyer, or the loan refinances a primary residence, and the mortgage includes at least one of five features:

The loan feature	What it means on your file
Interest only payments	The scheduled payment can cover interest without reducing the principal
Possible negative amortization	The balance can grow rather than shrink
Total points and fees payable at or before closing above 5%	The cost of getting the loan, measured against the loan amount
A prepayment penalty	A charge for paying the loan off early
An adjustable rate	The rate can change after an initial period

You only get a counseling recommendation when both halves are true at the same time. A move-up buyer in Cook County who already owns is not a first-time homebuyer and is not refinancing, so the standard in Section 73 does not reach them, even though the database submission still happens on their file. A first-time buyer on a fixed-rate loan with ordinary costs meets the first half and none of the second, so the determination comes back with no counseling recommended.

The statute also says plainly that a client may not waive counseling. Where the determination recommends it, attending is how the file gets its certificate, and no signature replaces it.

Who pays for the counseling session?

Your originator does, and the statute says it cannot be turned around and charged to you afterward.

Article 3 provides that reasonable and customary costs associated with counseling under the program, not to exceed $300, are to be paid by the broker or originator. The same sentence goes on to say those costs are not to be charged back to or recovered from the client. That figure is set in the statute rather than by any lender, and it is worth confirming the current text with your originator when the determination arrives.

The sequence around the session is also on a clock. When you receive the notice listing HUD approved counseling agencies, you have 10 business days to pick one of them and sit for an interview with a counselor there. After that interview, the counselor has 7 business days to submit the required information back to the database.

If you pick an agency in the first day or two of the ten you are given, rather than on the ninth, you buy back about a week of room in your own closing schedule.

Why will the county not record your mortgage without the certificate?

Because the certificate is what the recorder is looking for, and the statute makes the mortgage unrecordable without it.

Under 765 ILCS 77/76, the title insurance company or closing agent attaches a certificate of compliance generated by the database to the mortgage. Where the transaction is exempt from the program, a certificate of exemption, also generated by the database, goes on instead. Each certificate carries at minimum one name from the mortgage loan and the property index number for the property. If the required certificate is not attached, the statute says the mortgage is not recordable. The closing agent then has 10 business days after closing to submit its own required information to the database.

Recording is what puts the lender's lien and your ownership on the public record, so a mortgage that cannot be recorded is more than a paperwork annoyance. County recorders in the program area publish their own pages on it, and the Will County Recorder's anti-predatory lending page is one of them.

Illinois has a second and entirely separate gate on recordability, and the two get confused. The Illinois village transfer stamp a deed needs before recording is a municipal stamp bought at a town's own finance counter under that town's ordinance, usually in the days before closing. A purchase inside a home rule municipality in one of these four counties can be subject to both, on two timelines, handled by two offices.

How do you keep this step from holding up your closing?

The order matters more than the speed, because two of the windows below start before you are involved at all.

1. You want the county settled before anything else. The program reaches Cook, Kane, Peoria and Will County only, and knowing that on day one is better than finding it out in week three.
2. You want the application in early enough that ten business days is not a problem. The submission clock starts when your application is taken, so applying the week you go under contract leaves far less room than applying while you are still touring properties.
3. You can ask your originator when the submission went in and what the determination said. Both are dates on your file, and both are answerable in a sentence.
4. If counseling is recommended, please pick your agency and book the interview in the first day or two of the ten you are given. The counselor's own seven day clock to report back does not start until your interview actually happens.
5. Your closing agent can confirm the certificate is in hand before the closing date is treated as firm. The certificate either exists in the database or it does not, so your closing agent can tell you in a sentence.
6. Please do not agree to pay the counseling cost. The statute places it on the broker or originator, so a charge for it on a settlement statement is a question to raise before you sign.

Any originator who works these counties regularly runs all of this without being asked, so a short message is usually all it takes to confirm where your file stands.

Where this costs time on a purchase

Assuming the program is statewide. The program area is four counties. If you are buying in Lake County, no certificate is owed on your file, and a week spent looking for one is a week gone.

Treating the determination as the end of the step. A determination that recommends counseling starts a sequence of three things. You sit for the session, the counselor reports to the database, and the certificate is generated. Each one has to finish before the next can happen.

Discovering the whole thing in closing week. The ten day submission window is already spent by then, and every remaining clock has to run inside days you also need for the appraisal, the title work and your walkthrough.

Paying for the counseling. The statute puts that cost on the broker or originator and says it is not to be recovered from the client, so a line item charging you for it is worth questioning before you sign.

An illustration, using made up numbers

Numbers below are made up to show the mechanism. They are not a quote and not a rate on any loan.

Say you are a first-time buyer under contract on a home in Peoria County with a forty five day close, on a loan that carries an adjustable rate. Your application is taken on day three and submitted to the database on day six, well inside the ten business day window. The determination arrives on day thirteen, and because you are a first-time homebuyer on an adjustable rate loan, counseling is recommended. You book the interview for day sixteen, the counselor reports on day twenty, and the certificate is attached at closing on day forty five.

Now move one thing. The application is still taken on day three, but submitted on day sixteen, which is lawful because ten business days is two calendar weeks. The determination arrives on day twenty six. You book the first appointment you can get for day thirty four, the counselor reports by day forty, and the certificate lands with four days to spare. It is the same file and the same law in both versions, and the only thing that moved was the day the application went in.

Where this fits in an Illinois purchase

The database step is one of several Illinois rules that run on their own calendars while you are busy with the parts of a purchase you can see. The Illinois closing rules that decide who pays what covers the wider picture, including the lawyers on both sides and the transfer taxes stacked at three levels of government. The Illinois radon disclosure and your testing window is another one that starts before contract rather than after, and if you are buying from out of state, closing on a home remotely covers how the signing itself can work.

The reason to start your paperwork earlier than the calendar seems to require is that the database submission and the state's determination both run before anything you control. What a documented pre-approval involves is where that starts, and you can price your Illinois scenario first, without giving anyone your name, in the Rate and Best Fit pricing tool.

Common questions

Does the Illinois Anti-Predatory Lending Database apply everywhere in Illinois?

No. It applies to mortgages on residential property in Cook, Kane, Peoria and Will counties only. Cook County came into the program on July 1, 2008, and Kane, Peoria and Will counties joined on July 1, 2010, according to the IDFPR program fact sheet. A purchase anywhere else in Illinois does not go through the database, and no certificate is needed for the mortgage to be recorded.

Do I have to pay for the housing counseling session?

No. Article 3 of the Residential Real Property Disclosure Act provides that reasonable and customary counseling costs under the program, up to the cap the statute names, are paid by the broker or originator. It also says those costs are not to be charged back to or recovered from the client. If a charge for the session appears on a settlement statement, please ask about it before you sign.

Can I skip the counseling if I already understand my loan?

No. The statute states that counseling may not be waived. Where the state's determination recommends counseling, the session is what allows the counselor to report to the database, and the database is what generates the certificate of compliance the closing agent attaches to your mortgage. There is no alternative document that stands in for it.

What happens if the certificate is missing at closing?

The mortgage is not recordable. The statute directs the title insurance company or closing agent to attach the database generated certificate of compliance, or a certificate of exemption where the transaction is exempt, and says that a mortgage without the required certificate cannot be recorded. In practice that means the certificate has to exist before the closing date is treated as firm, which is a question worth asking your closing agent a week out.

I already own a home and I am buying another one in Cook County. Does counseling apply to me?

The counseling standard in the statute reaches loans where everyone on the loan is a first-time homebuyer, or where the loan refinances a primary residence. A move-up buyer who already owns is in neither category, so the counseling determination is unlikely to recommend a session. The database submission by your originator still happens, and the certificate still has to be attached at closing.