Illinois Modifies Provisions Regarding Annual Audits of Residential Mortgage Licensees
The state of Illinois modified its provisions regarding annual audits under the Residential Mortgage License Act. Under this act, each residential mortgage licensee must have its books and accounts audited by a certified public accountant at the licensee’s fiscal year end and not more than 12 months after the previous audit. A licensee that is a subsidiary may submit audited consolidated financial statements of its parent. The most recent audit report shall be filed with the Commissioner within 90 days after the end of the licensee’s fiscal year, or with the Nationwide Mortgage Licensing System and Registry, if applicable. The report filed is signed by the certified public accountant conducting the audit; if a qualified or adverse opinion is expressed as part of the audit, the reasons must be fully explained.
Licensees who solely broker residential mortgage loans are not required to file an audit. Instead, the Commissioner may accept compilation financial statements. A licensee who files false or misleading compilation financial statements is guilty of a business offense and shall be fined not less than $5,000.
Previously when a licensee did not have an audit or a licensee failed to file a compilation financial statement, the Commissioner could force an audit to be undertaken by a certified public accountant at the licensee’s expense and the Commissioner selected such certified public accountant by advertising for bids or by such other process. These sections of the Illinois Residential Mortgage License Act of 1987 have been removed and the Commissioner no longer has this authority.
The Residential Mortgage License Act of 1987 is amended by changing Section 3-2 and is effective immediately. Senate Bill 2884 can be found here: http://www.ilga.gov/legislation/99/SB/PDF/09900SB2884lv.pdf
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