6.2-1614 - (Effective October 1, 2010) Prohibitions applicable to mortgage lenders and mortgage brokers.
§ 6.2-1614. (Effective October 1, 2010) Prohibitions applicable to mortgagelenders and mortgage brokers.
No mortgage lender or mortgage broker required to be licensed under thischapter 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 securing a mortgage loan, including any fixtures and appliancesthereon and any mobile or manufactured home placed on such real estate evenif such mobile or manufactured home is not permanently affixed thereto;
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 a borrower which containsan acceleration clause permitting the unpaid balance of a mortgage loan to bedeclared due for any reason other than failing to make timely payments ofinterest and principal, submitting false information in connection with anapplication for the mortgage loan, breaching any representation or covenantmade in the agreement or instrument, or failing to perform any otherobligations undertaken in the agreement or instrument;
6. Recommend or encourage a person to default on an existing loan or otherdebt, if such default adversely affects such person's creditworthiness, inconnection with the solicitation or making of a mortgage loan that refinancesall or any portion of such existing loan or debt;
7. Knowingly or intentionally engage in the act or practice of refinancing amortgage loan within 12 months following the date the refinanced mortgageloan was originated, unless the refinancing is in the borrower's bestinterest, which act or practice is commonly referred to as "flipping." Thisprohibition shall apply regardless of whether the interest rate, points,fees, and charges paid or payable by the borrower in connection with therefinancing exceed any limitation established pursuant to Chapter 3 (§6.2-300 et seq.) or Article 2 (§ 6.2-406 et seq.) of Chapter 4. Factors to beconsidered in determining if the refinancing is in the borrower's bestinterest include but are not limited to whether:
a. The borrower's new monthly payment is lower than the total of all monthlyobligations being financed, taking into account the costs and fees;
b. There is a change in the amortization period of the new loan;
c. The borrower receives cash in excess of the costs and fees of refinancing;
d. The rate of interest on the borrower's note is reduced;
e. There is a change from an adjustable to a fixed rate loan, taking intoaccount costs and fees; and
f. The refinancing is necessary to respond to a bona fide personal need or anorder of an appropriate court; or
8. Use or cause to be published any advertisement that:
a. Contains any false, misleading, or deceptive statement or representation;or
b. Identifies the mortgage lender or mortgage broker by any name other thanthe name set forth on the license issued by the Commission.
(1987, c. 596, §§ 6.1-422, 6.1-424; 1989, c. 667; 1993, c. 183; 1995, c. 62;1997, c. 228; 2001, cc. 502, 510, 511, § 6.1-422.1; 2003, c. 386; 2009, cc.189, 261; 2010, c. 794.)