A. As used in this section:

Terms Used In Virginia Code 6.2-1616

  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Mortgage broker: means any person who directly or indirectly negotiates, places or finds mortgage loans for others, or offers to negotiate, place or find mortgage loans for others. See Virginia Code 6.2-1600
  • Mortgage lender: means any person who directly or indirectly originates or makes mortgage loans. See Virginia Code 6.2-1600
  • Mortgage loan: means a loan made to an individual, the proceeds of which are to be used primarily for personal, family or household purposes, which loan is secured by a mortgage or deed of trust upon any interest in one- to four-family residential property located in the Commonwealth, regardless of where made, including the renewal or refinancing of any such loan, but excluding (i) loans to persons related to the lender by blood or marriage and (ii) loans to persons who are bona fide employees of the lender. See Virginia Code 6.2-1600
  • Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC
  • Principal: means any person who, directly or indirectly, owns or controls a 10 percent or greater interest in any entity. See Virginia Code 6.2-1600
  • real estate: includes lands, tenements and hereditaments, and all rights and appurtenances thereto and interests therein, other than a chattel interest. See Virginia Code 1-219
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
  • Trustee: A person or institution holding and administering property in trust.

“Real estate broker” has the same meaning provided in § 54.1-2100.

“Real estate salesperson” has the same meaning provided in § 54.1-2101.

B. No mortgage broker required to be licensed under this chapter shall:

1. Except for documented costs of credit reports and appraisals, receive compensation from a borrower until a written commitment to make a mortgage loan is given to the borrower by a mortgage lender;

2. Receive compensation from a mortgage lender of which he is a principal, partner, trustee, director, officer, or employee;

3. Receive compensation from a borrower in connection with any mortgage loan transaction in which he is the lender or a principal, partner, trustee, director, or officer of the lender;

4. Receive compensation from a borrower other than that specified in a written agreement signed by the borrower; or

5. Fail to use reasonable skill, care, and diligence in exercising the broker’s duty, which duty is hereby created, to make reasonable efforts to secure a mortgage loan that is in the best interests of the applicant, considering the applicant’s circumstances and loan characteristics, including but not limited to the product type, rates, charges, and repayment terms of the loan.

C. If a mortgage broker negotiates, places, or finds a mortgage loan and acts as a real estate broker or real estate salesperson in connection with the sale of the real estate that secures such loan, the mortgage broker shall conspicuously provide to the borrower the following written disclosure at the time the mortgage broker services are first offered to the borrower:

YOU ARE HEREBY NOTIFIED THAT YOU ARE NOT REQUIRED TO ENTER INTO ANY ARRANGEMENT FOR REAL ESTATE BROKER OR REAL ESTATE SALESPERSON SERVICES WITH A REAL ESTATE BROKER OR REAL ESTATE SALESPERSON TO WHOM WE HAVE REFERRED YOU.

YOU ARE HEREBY NOTIFIED THAT [NAME OF MORTGAGE BROKER] WILL BE RECEIVING COMPENSATION FOR PROVIDING BOTH MORTGAGE BROKER SERVICES AND REAL ESTATE BROKER OR REAL ESTATE SALESPERSON SERVICES IN CONNECTION WITH THE SALE OF THE REAL ESTATE THAT SECURES THIS MORTGAGE LOAN.

YOU ARE HEREBY NOTIFIED THAT WE DO NOT REPRESENT ALL OF THE LENDERS IN THE MARKET AND THE LENDERS WE DO REPRESENT MAY NOT OFFER THE LOWEST INTEREST RATES OR BEST TERMS AVAILABLE TO YOU.

D. The requirements of this section are in addition to the requirements of the federal Real Estate Settlement Procedures Act of 1974 (12 U.S.C. § 2601 et seq.) and regulations adopted thereunder.

1987, c. 596, § 6.1-422; 1989, c. 667; 1993, c. 183; 1997, c. 228; 2001, cc. 502, 511; 2009, cc. 189, 261; 2010, c. 794; 2022, cc. 400, 401.

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