Virginia Administrative Code › Title 10 - FINANCE AND FINANCIAL INSTITUTIONS › Agency 5 - STATE CORPORATION COMMISSION › Chapter 160 - RULES GOVERNING MORTGAGE LENDERS AND BROKERS › Section 10VAC5-160-20 - Operating requirements

Current through Register Vol. 40, No. 24, July 15, 2024
A licensee shall conduct its business in accordance with the
				  following requirements:
1. No licensee
				shall (i) misrepresent the qualification requirements for a mortgage loan or
				any material loan terms; (ii) make false or misleading statements to induce an
				applicant to apply for a mortgage loan, enter into any commitment agreement or
				lock-in agreement, or pay any commitment fee or lock-in fee in connection
				therewith; or (iii) provide any other information to a borrower or prospective
				borrower that is false, misleading, or deceptive. A "material loan term" means
				the loan terms required to be disclosed to a consumer pursuant to (i) the Truth
				in Lending Act ( 15 USC
				§
										1601 et seq.) and the Real Estate
				Settlement Procedures Act of 1974 (
				12 USC §
										2601 et seq.), and regulations and official
				commentary issued thereunder, as amended from time to time, (ii) §
									6.2-406 of the Code of Virginia,
				and (iii) 10VAC5-160-30. A misrepresentation
				or false or misleading statement resulting directly from incorrect information
				furnished to a licensee by a third party, or a good-faith misunderstanding of
				information furnished by a third party, shall not be considered a violation of
				this section if the licensee has supporting documentation thereof and the
				licensee's reliance thereon was reasonable.
2. No licensee shall retain any portion of
				any fees or charges imposed upon consumers for goods or services provided by
				third parties. All moneys received by a licensee from an applicant for fees
				paid to third persons shall be accounted for separately, and all disbursements
				for fees paid to third persons shall be supported by adequate documentation of
				the services for which such fees were or are to be paid. All such moneys shall
				be deposited in an escrow account in a bank, savings institution, or credit
				union segregated from other funds of the licensee.
3. The mortgagor who obtains a mortgage loan
				shall be entitled to continue to make payments to the transferor of the
				servicing rights under a mortgage loan until the mortgagor is given written
				notice of the transfer of the servicing rights by the transferor pursuant to
				the requirements set forth in the Real Estate Settlement Procedures Act of 1974
				( 12 USC §
										2601 et seq.).
4. Pursuant to §
									6.2-1621 of the Code of Virginia,
				within 15 days of becoming aware of the occurrence of any of the events
				enumerated in this subdivision, a licensed mortgage lender or mortgage broker
				shall file a written report with the commissioner describing such event and its
				expected impact, if any, on the activities of the licensee in the Commonwealth.
				If the Registry enables licensees to submit the information required by this
				subdivision, then submission of this information through the Registry shall
				satisfy the requirement for a written report:
a. The licensee files for bankruptcy or
				reorganization.
b. Any governmental
				authority institutes revocation or suspension proceedings against the licensee
				or revokes or suspends a mortgage-related license held or formerly held by the
				licensee.
c. Any governmental
				authority takes (i) formal regulatory or enforcement action against the
				licensee relating to its mortgage business or (ii) any other action against the
				licensee relating to its mortgage business where the total amount of
				restitution or other payment from the licensee exceeds $20,000. A licensee
				shall not be required to provide the commissioner with information about such
				event to the extent that such disclosure is prohibited by the laws of another
				state.
d. Based on allegations by
				any governmental authority that the licensee violated any law or regulation
				applicable to the conduct of its licensed mortgage business, the licensee
				enters into, or otherwise agrees to the entry of, a settlement or consent
				order, decree, or agreement with or by such governmental authority.
e. The licensee surrenders its license to
				engage in any mortgage-related business in another state in lieu of threatened
				or pending license revocation, license suspension, or other regulatory or
				enforcement action.
f. The licensee
				is denied a license to engage in any mortgage-related business in another
				state.
g. The licensee or any of
				its employees, officers, directors, principals, or exclusive agents is indicted
				for a felony.
h. The licensee or
				any of its employees, officers, directors, principals, or exclusive agents is
				convicted of a felony.
i. The
				licensee or any of its employees, officers, directors, principals, or exclusive
				agents is convicted of a misdemeanor involving fraud, misrepresentation, or
				deceit.