6.2-1416 - (Effective October 1, 2010) Prohibited practices.
§ 6.2-1416. (Effective October 1, 2010) Prohibited practices.
A. No association shall:
1. Obtain any agreement or instrument in which blanks are left to be filledin after execution;
2. Take an interest in collateral other than the real estate or residentialproperty, including fixtures and appliances thereon, securing a mortgageloan; however, an interest in collateral other than real estate may be takenif the real estate taken as collateral does not have sufficient equity tosecure the mortgage loan;
3. Obtain any exclusive dealing or exclusive agency agreement from anyborrower;
4. Delay closing of any mortgage loan for the purpose of increasing interest,costs, fees, or charges payable by the borrower;
5. Obtain any agreement or instrument executed by the borrower which containsan acceleration clause permitting the unpaid balance of a mortgage loan to bedeclared due for any reason other than failure to make timely payments ofinterest and principal or to perform other obligations undertaken in theagreement or instrument; or
6. If acting as a mortgage lender, fail to require the person closing themortgage loan to provide the borrower, prior to closing of the mortgage loan,with a (i) settlement statement and (ii) disclosure which conforms to thatrequired by the provisions of 15 U.S.C. § 1601 et seq. and Federal ReserveBoard Regulation Z (12 C.F.R. Part 226).
B. No association, when acting as a mortgage broker, shall:
1. Except for documented costs of a credit report and appraisals, receivecompensation from a borrower until a written commitment to make a mortgageloan is given to the borrower by a mortgage lender;
2. Receive compensation from a mortgage lender of which it is a principal,partner, trustee, director, officer, or employee;
3. Receive compensation from a borrower in connection with any mortgage loantransaction in which it 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 awritten agreement signed by the borrower; or
5. Receive compensation for negotiating, placing or finding a mortgage loanwhere such association, or any person affiliated with such association, hasotherwise acted as a real estate broker, agent, or salesman in connectionwith the real estate which secures the mortgage loan, and such association oraffiliated person has received or will receive any other compensation orthing of value from the lender, borrower, seller, or any other person, unlessthe borrower is given the following notice in writing at the time themortgage broker services are first offered to the borrower:
NOTICE
WE HAVE OFFERED TO ASSIST YOU IN OBTAINING A MORTGAGE LOAN. IF WE ARESUCCESSFUL IN OBTAINING A LOAN FOR YOU, WE WILL CHARGE AND COLLECT FROM YOU AFEE NOT TO EXCEED ________ % OF THE LOAN AMOUNT.
WE DO NOT REPRESENT ALL OF THE LENDERS IN THE MARKET AND THE LENDERS WE DOREPRESENT MAY NOT OFFER THE LOWEST INTEREST RATES OR BEST TERMS AVAILABLE TOYOU. YOU ARE FREE TO SEEK A LOAN WITHOUT OUR ASSISTANCE, IN WHICH EVENT YOUWILL NOT BE REQUIRED TO PAY US A FEE FOR THAT SERVICE.
IF YOU ARE A MEMBER OF A CREDIT UNION, YOU SHOULD COMPARE OUR INTEREST RATESAND TERMS WITH THE MORTGAGE LOANS AVAILABLE THROUGH YOUR CREDIT UNION.
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BORROWER'S SIGNATURE
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BORROWER'S SIGNATURE
The foregoing notice shall be in at least 10-point type, and the prospectiveborrower shall acknowledge receipt of the written notice.
(1993, c. 419, § 6.1-237.6; 2010, c. 794.)