§ 6.1-2.14. Validity of loan documents.
Failure to comply with the provisions of this chapter shall not affect the validity or
enforceability of any loan documents executed after July 1, 1980.
(1980, c. 730.
§ 6.1-2.13:2. Disclosure of affiliated business by settlement service providers.
Any person making a referral to an affiliated settlement service provider shall disclose the affiliation in accordance with the federal Real Estate Settlement Procedures Act of 1974 (12 U. S. C. § 2601 et seq.) and provide such disclosure regardless of the amount of the person’s actual ownership interest in the affiliated provider, unless such ownership is one percent or less of the capital stock of a corporation or entity with a class of securities registered under the Securities Exchange Act of 1934 (15 U. S. C. § 78a et seq.), in which case such disclosure shall not be required.
(1999, c. 688.)
D. Any person who knowingly and willfully violates this section shall be guilty of a misdemeanor and subject to a fine of not more than $1,000 for each violation. Any criminal charge brought under this section shall be by indictment pursuant to Chapter 14 (§ 19.2-210 et seq.) of Title 19.2.
(1996, c. 883, 1999, C. 109.)
The 1999 amendment inserted ”lay settlement agent” in subsection A, in the first sentence, deleted the former second sentence, which read: ”No settlement agent shall give any such kickback, rebate, commission, thing of value or other payment pursuant to any such agreement or understanding,” and in subsection C, in the first and second sentences, substituted ‘’service provider” for Agent.
C. No person shall be in violation of this section solely by reason of ownership in a settlement service provider as defined in this chapter, wherein such person receives returns on investments arising from the ownership interest. In addition, this section shall not prohibit the payment to any person of a bona fide salary or compensation or other payment for services actually performed for the business of the settlement service provider, or any lender’s payment to its own employees for referrals of mortgage loan business.
B. Nothing in this section shall be construed to prohibit (i) payments or sums spent for bona fide advertising and marketing promotions otherwise permissible under the provisions of the Real Estate Settlement Procedures Act (12 U-S-C, § 2601 et seq.) or (ii) providing educational materials or classes, wherein such materials or classes are provided to a group of persons or entities pursuant to a bona fide marketing or educational effort.
§ 6.1-2.13:1. Prohibition against payment or receipt of settlement services kickbacks,
rebates, commissions and other payments; penalty.
A. No person selling real property, or performing services as a real estate agent, attorney, lay settlement agent or lender incident to any real estate settlement or sale, shall pay or receive, directly or indirectly, any kickback, rebate, commission, thing of value, or other payment pursuant to any agreement or understanding, oral or otherwise, that business incident to services required to complete a settlement be referred to any person. For purposes of this section, ”thing of value” means any payment, advance, funds, loan, service or other consideration.
§ 6.1-2.13. Duty of settlement agent.
The settlement agent shall cause recordation of the deed, the deed of trust, or mortgage, or other documents required to be recorded and shall cause disbursement of settlement proceeds within two business days of settlement. A settlement agent may not disburse any or all loan finds or other funds coming into its possession prior to the recordation of any instrument, except (i) funds received which are overpayments to be returned to the provider of such funds, (11) funds necessary to effect the recordation of instruments, or (iii) funds which the provider has by separate written instrument directed to be disbursed prior to recordation of any instrument. Additionally, in any transaction involving the purchase or sale of an interest in residential real property, the settlement agent shall provide notification to the purchaser of the availability of owner’s title insurance as required under § 38.2-4616.
(1980, c. 730-1 1987, c. 576; 1992, c. 733,- 1996, c. 883.)
§ 6.1-2.11. Applicability.
This chapter applies only to transactions involving loans made by lenders, which loans will be secured by first deeds of trust or mortgages on real estate containing not more than four residential dwelling units.
(1980, c. 730; 1993, c. 530.)
§ 6.1-2.12. Duty of lender
The lender shall, at or before loan closing, cause disbursement of loan funds to the settlement agent, however, in the case of a refinancing, or any other loan where a right of rescission applies, the lender shall, within one business day after the expiration of the rescission period required under the federal Truth-in-Lending Act (15 U. S. C. § 1601 et seq.), cause disbursement of loan funds to the settlement agent. The lender shall not be entitled to receive or charge any interest on the loan until disbursement of loan funds and loan closing has occurred.
(1980, c. 730; 1993, c. 530.)
”Settlement” means the time when the settlement agent has received the duly executed deed, loan funds, loan documents, and other documents and funds required to carry out the terms of the contract between the parties and the settlement agent reasonably determines that pre-recordation
”Settlement agent disbursement of the settlement proceeds and includes any individual, corporation, partnership, or other entity conducting the settlement and disbursement of loan proceeds, it means the person responsible for conducting the settlement and conditions of such contracts have been satisfied. ”Parties” as used in this subsection means the seller, purchaser, borrower, lender and the settlement agent”.
“Settlement set-vice provider” means any person providing settlement services, as that term is defined under the Real Estate Settlement Procedures Act (12 U.S. C. § 2601 et seq.).
(1980, c. 730, 1981, c. 86, 1984, c. 118, 1987, cc. 576, 577, 1990, c. 340, 1991, c. 254, 1999, c.109.)
The 1999 amendment added the paragraph defining ”Settlement service provider.’
”Disbursement of settlement proceeds” means the payment of all proceeds of the transaction by the settlement agent to the persons entitled thereto;
”Lender” means any person regularly engaged in making loans secured by mortgages or deeds of trust on real estate;
”Loan closing” means that time agreed upon by the borrower and lender, when the execution of the loan documents by the borrower occurs,