Virginia Code 6.2-328: Charges allowed on loan secured by subordinate mortgage
A. Any lender making a loan secured by a subordinate mortgage or deed of trust may require the borrower to pay, in addition to the loan fee and interest permitted by § 6.2-327, the actual cost of a credit report, title examination, title insurance, mortgage guaranty insurance, recording fees, surveys, attorney fees, appraisal fees, and a fee to determine if the property securing the loan is located in a special flood hazard area. No other charges of any kind shall be imposed on or be payable by the borrower either to the lender or any other party in connection with such loan other than:
Terms Used In Virginia Code 6.2-328
- Appraisal: A determination of property value.
- Bank: means any national bank, any bank organized under Chapter 8 (§ 6. See Virginia Code 6.2-300
- Commission: means the State Corporation Commission. See Virginia Code 6.2-100
- Contract: A legal written agreement that becomes binding when signed.
- Credit report: A detailed report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness. Source: OCC
- Credit union: means any credit union organized under Chapter 13 (§ 6. See Virginia Code 6.2-300
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Loan: means a loan or forbearance of money. See Virginia Code 6.2-300
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- 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
- Savings institution: means any savings institution, as defined in § 6. See Virginia Code 6.2-300
- 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.
- Subordinate mortgage or deed of trust: means a mortgage or deed of trust that is subject to a prior mortgage or deed of trust in existence at the time of the making of the loan secured by such subordinate mortgage or deed of trust. See Virginia Code 6.2-300
- Trustee: A person or institution holding and administering property in trust.
1. A fee charged by the settlement agent as defined in § 55.1-1000;
2. Late charges in the amount specified in § 6.2-400 and a prepayment penalty permitted under § 6.2-423 that are contracted for; and
3. Upon default, court costs, attorney fees, trustee‘s commission, and other expenses of collection to which the borrower may be subject as otherwise permitted by law.
B. Broker’s or finder’s fees may be paid by the lender from the loan fee or interest permitted under § 6.2-327. A broker’s fee, finder’s fee, or commission not to exceed five percent of the principal amount of the loan may be paid by the borrower if the total of the loan fee permitted under § 6.2-327 and the broker’s fee, finder’s fee, or commission does not exceed five percent of the principal amount of the loan.
C. The premium for any insurance required or provided pursuant to § 6.2-411 shall not be considered a charge imposed on or payable by the borrower in connection with the loan.
D. No charge may be imposed or collected, except as permitted by § 6.2-327, if the loan is not made.
E. This section shall not apply to any loan made by (i) a bank, savings institution, industrial loan association, or credit union or (ii) a seller in a real estate sales transaction who takes a subordinate mortgage or deed of trust on such real estate.
F. The borrower under any loan to which the provisions of this section apply may assert any defense or claim he may have under §§ 6.2-304 and 6.2-305 against any assignee or transferee of the contract of indebtedness.
1987, c. 622, § 6.1-330.72; 1993, c. 774; 1995, c. 75; 1996, c. 243; 1998, cc. 69, 89; 2010, c. 794.