Virginia Modifies Real Estate Provisions
The state of Virginia has amended several of its real estate provisions, including those relating to mortgage brokers, the misuse of the power of attorney, and residential property disclosures. These updates are effective as of July 1, 2022.
Mortgage Brokers
Pursuant to House Bill 1153, Virginia has removed the prohibition on real estate brokers from acting as a mortgage broker within the same transaction in which the broker will receive compensation. As a condition, persons who assume the dual roles of real estate broker and mortgage broker must provide the borrower with the following conspicuous notice at the time the mortgage broker’s services are first offered:
YOU ARE HEREBY NOTIFIED THAT YOU ARE NOT REQUIRED TO ENTER INTO ANY ARRANGEMENT FOR REAL ESTATE BROKER OR REAL ESTATE SALESPERSON SERVICES WITH A REAL ESTATE BROKER OR REAL ESTATE SALESPERSON TO WHOM WE HAVE REFERRED YOU.
YOU ARE HEREBY NOTIFIED THAT [NAME OF MORTGAGE BROKER] WILL BE RECEIVING COMPENSATION FOR PROVIDING BOTH MORTGAGE BROKER SERVICES AND REAL ESTATE BROKER OR REAL ESTATE SALESPERSON SERVICES IN CONNECTION WITH THE SALE OF THE REAL ESTATE THAT SECURES THIS MORTGAGE LOAN.
YOU ARE HEREBY NOTIFIED THAT WE DO NOT REPRESENT ALL OF THE LENDERS IN THE MARKET AND THE LENDERS WE DO REPRESENT MAY NOT OFFER THE LOWEST INTEREST RATES OR BEST TERMS AVAILABLE TO YOU.
The Misuse of the Power of Attorney
With the passing of House Bill 497, a person acting under power of attorney can now face criminal prosecution for knowingly or intentionally engaging in financial exploitation of an incapacitated adult principal.
Residential Property Disclosure Act
House Bill 702 has amended the Residential Property Disclosure Act by expanding the language required on borrower to beware disclosures. Going forward, residential property disclosures must specify that the owner makes no representations regarding the physical boundaries of the property, including the ability to expand or build upon it. Purchasers are advised to do their own research on the boundaries of the property, including hiring a professional surveyor or consulting the local zoning board.
How can we help?
CLA is prepared to assist your institution. Our mortgage professionals can help you evaluate the impact this new rule has on your operations. We are here to know you and help you. Contact Us with any questions or to learn how we can assist your mortgage operations.
Elizabeth Dailey, JD, is a Regulatory Compliance Director with CLA. She is a graduate of the University of New Hampshire and earned her juris doctor at New England Law. She is admitted to the Massachusetts Bar.
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