Virginia Code 6.2-1618: Escrow accounts
A. All moneys required by a mortgage lender required to be licensed under this chapter to be paid by borrowers in escrow to defray future taxes or insurance premiums, or for other lawful purposes, shall be kept in accounts segregated from accounts of the lender, and shall not be commingled with other funds of the lender.
Terms Used In Virginia Code 6.2-1618
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- in writing: include any representation of words, letters, symbols, numbers, or figures, whether (i) printed or inscribed on a tangible medium or (ii) stored in an electronic or other medium and retrievable in a perceivable form and whether an electronic signature authorized by Chapter 42. See Virginia Code 1-257
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- 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
B. No licensed mortgage lender shall require any borrower to pay any moneys in escrow to defray future taxes and insurance premiums, or for any other purpose, in connection with a subordinate mortgage loan as referred to in Article 2 (§ 6.2-406 et seq.) of Chapter 4, except where escrows for such purposes are not being maintained in connection with the mortgage loan superior to such subordinate mortgage loan.
C. Mortgage lenders holding money in escrow for insurance premiums shall notify the insurer in writing within 30 days of a change of the mortgage lender’s billing address, or 60 days prior to the renewal date of the insurance policy, whichever is later.