§ 6.2-327. (Effective October 1, 2010) Certain loans secured by a subordinatedeed of trust or mortgage.
A. As used in this section:
"Exempt subordinate mortgage lender" means (i) a bank, savings institution,industrial loan association, or credit union or (ii) a seller in a realestate sales transaction who takes a subordinate mortgage or deed of trust onsuch real estate.
"New money" means money advanced in excess of the outstanding principalbalance at the time a new advance is made.
"Real estate" includes a leasehold estate of not less than 25 years.
"Residential real estate" means real estate improved by the constructionthereon of housing consisting of one- to four-family dwelling units.
B. An add-on interest loan shall be subject to the following provisions:
1. Any person may charge add-on interest that results in an annual yield ofnot more than 18 percent upon loans secured in whole or in part by asubordinate mortgage or deed of trust on residential real estate;
2. An add-on interest loan may be made only under this subsection and shallnot exceed a period of five years and one month; and
3. The lender may also impose a loan fee not exceeding two percent of theprincipal amount of the loan provided that such loan fee shall not be imposedmore often than once each 18 months except to the extent that new money isadvanced within such 18-month period by a renewal or additional loan. Newmoney shall be money advanced in excess of the outstanding principal balanceat the time such new advance is made. These provisions shall apply whethersuch loan fee is payable directly to the lender or to a third party inconnection with such loan.
C. No charge, other than actual costs documented to the applicant andexpended for a credit report and an appraisal of the real estate conducted inconnection with the loan application, may be made if a loan secured by asubordinate mortgage or deed of trust is not made. Such charge:
1. Shall not exceed one percent of the amount of the loan applied for; but inno event shall such charge exceed $50 or one-half of such costs, whichever isless; and
2. May be made only if the lender commits to make the loan. Such commitmentshall be in writing and signed by the lender or a person who the lender hasauthorized to execute such documents.
D. Any loan secured by a subordinate mortgage or deed of trust on residentialreal estate upon which the interest is charged at an annual interest rate onthe unpaid balance thereof shall be subject to the following provisions:
1. Such a loan may be lawfully enforced at the annual interest rate stated inthe contract of indebtedness on the principal amount of the loan. Such annualinterest rate may vary in accordance with an exterior standard;
2. In addition to the annual interest rate permitted by subdivision 1, thelender may charge the borrower a loan fee not exceeding five percent of theprincipal amount of the loan, provided that such loan fee shall not beimposed more often than once each 18 months except to the extent that newmoney is advanced within such 18-month period by a renewal or additionalloan. Such loan fee may only be reimposed by the lender upon a borrower inconnection with the refinancing of a loan made pursuant to this subsection;and
3. The lender may charge the borrower with the actual costs of the loan aspermitted by § 6.2-328.
E. The rates, charges and other provisions permitted or required by thissection or by § 6.2-328 shall apply to all loans secured by a subordinatemortgage or deed of trust, including, without limitation, (i) single maturityloans, (ii) amortizing loans, and (iii) loans secured by a credit line deedof trust as permitted by § 55-58.2.
F. Except for the loan fee permitted in this section, no discount, initialinterest, points or charges by any other name may be collected, charged oradded to a loan secured by a subordinate mortgage or deed of trust uponresidential real estate.
G. The provisions of this section shall not apply to any loan by an exemptsubordinate mortgage lender.
H. For the purpose of this section, an interest rate that varies inaccordance with any exterior standard, or that cannot be ascertained from thecontract without reference to any exterior circumstances or documents, shallbe enforceable as agreed in the contract of indebtedness or other signedagreement.
I. The borrower under any loan to which the provisions of this section applymay assert any defense or claim he may have under §§ 6.2-304 and 6.2-305against any assignee or transferee of the contract of indebtedness.
(1987, c. 622, §§ 6.1-330.59, 6.1-330.69, 6.1-330.71; 1991, c. 157; 1996, c.243; 2010, c. 794.)
§ 6.2-327. (Effective October 1, 2010) Certain loans secured by a subordinatedeed of trust or mortgage.
A. As used in this section:
"Exempt subordinate mortgage lender" means (i) a bank, savings institution,industrial loan association, or credit union or (ii) a seller in a realestate sales transaction who takes a subordinate mortgage or deed of trust onsuch real estate.
"New money" means money advanced in excess of the outstanding principalbalance at the time a new advance is made.
"Real estate" includes a leasehold estate of not less than 25 years.
"Residential real estate" means real estate improved by the constructionthereon of housing consisting of one- to four-family dwelling units.
B. An add-on interest loan shall be subject to the following provisions:
1. Any person may charge add-on interest that results in an annual yield ofnot more than 18 percent upon loans secured in whole or in part by asubordinate mortgage or deed of trust on residential real estate;
2. An add-on interest loan may be made only under this subsection and shallnot exceed a period of five years and one month; and
3. The lender may also impose a loan fee not exceeding two percent of theprincipal amount of the loan provided that such loan fee shall not be imposedmore often than once each 18 months except to the extent that new money isadvanced within such 18-month period by a renewal or additional loan. Newmoney shall be money advanced in excess of the outstanding principal balanceat the time such new advance is made. These provisions shall apply whethersuch loan fee is payable directly to the lender or to a third party inconnection with such loan.
C. No charge, other than actual costs documented to the applicant andexpended for a credit report and an appraisal of the real estate conducted inconnection with the loan application, may be made if a loan secured by asubordinate mortgage or deed of trust is not made. Such charge:
1. Shall not exceed one percent of the amount of the loan applied for; but inno event shall such charge exceed $50 or one-half of such costs, whichever isless; and
2. May be made only if the lender commits to make the loan. Such commitmentshall be in writing and signed by the lender or a person who the lender hasauthorized to execute such documents.
D. Any loan secured by a subordinate mortgage or deed of trust on residentialreal estate upon which the interest is charged at an annual interest rate onthe unpaid balance thereof shall be subject to the following provisions:
1. Such a loan may be lawfully enforced at the annual interest rate stated inthe contract of indebtedness on the principal amount of the loan. Such annualinterest rate may vary in accordance with an exterior standard;
2. In addition to the annual interest rate permitted by subdivision 1, thelender may charge the borrower a loan fee not exceeding five percent of theprincipal amount of the loan, provided that such loan fee shall not beimposed more often than once each 18 months except to the extent that newmoney is advanced within such 18-month period by a renewal or additionalloan. Such loan fee may only be reimposed by the lender upon a borrower inconnection with the refinancing of a loan made pursuant to this subsection;and
3. The lender may charge the borrower with the actual costs of the loan aspermitted by § 6.2-328.
E. The rates, charges and other provisions permitted or required by thissection or by § 6.2-328 shall apply to all loans secured by a subordinatemortgage or deed of trust, including, without limitation, (i) single maturityloans, (ii) amortizing loans, and (iii) loans secured by a credit line deedof trust as permitted by § 55-58.2.
F. Except for the loan fee permitted in this section, no discount, initialinterest, points or charges by any other name may be collected, charged oradded to a loan secured by a subordinate mortgage or deed of trust uponresidential real estate.
G. The provisions of this section shall not apply to any loan by an exemptsubordinate mortgage lender.
H. For the purpose of this section, an interest rate that varies inaccordance with any exterior standard, or that cannot be ascertained from thecontract without reference to any exterior circumstances or documents, shallbe enforceable as agreed in the contract of indebtedness or other signedagreement.
I. The borrower under any loan to which the provisions of this section applymay assert any defense or claim he may have under §§ 6.2-304 and 6.2-305against any assignee or transferee of the contract of indebtedness.
(1987, c. 622, §§ 6.1-330.59, 6.1-330.69, 6.1-330.71; 1991, c. 157; 1996, c.243; 2010, c. 794.)
§ 6.2-327. (Effective October 1, 2010) Certain loans secured by a subordinatedeed of trust or mortgage.
A. As used in this section:
"Exempt subordinate mortgage lender" means (i) a bank, savings institution,industrial loan association, or credit union or (ii) a seller in a realestate sales transaction who takes a subordinate mortgage or deed of trust onsuch real estate.
"New money" means money advanced in excess of the outstanding principalbalance at the time a new advance is made.
"Real estate" includes a leasehold estate of not less than 25 years.
"Residential real estate" means real estate improved by the constructionthereon of housing consisting of one- to four-family dwelling units.
B. An add-on interest loan shall be subject to the following provisions:
1. Any person may charge add-on interest that results in an annual yield ofnot more than 18 percent upon loans secured in whole or in part by asubordinate mortgage or deed of trust on residential real estate;
2. An add-on interest loan may be made only under this subsection and shallnot exceed a period of five years and one month; and
3. The lender may also impose a loan fee not exceeding two percent of theprincipal amount of the loan provided that such loan fee shall not be imposedmore often than once each 18 months except to the extent that new money isadvanced within such 18-month period by a renewal or additional loan. Newmoney shall be money advanced in excess of the outstanding principal balanceat the time such new advance is made. These provisions shall apply whethersuch loan fee is payable directly to the lender or to a third party inconnection with such loan.
C. No charge, other than actual costs documented to the applicant andexpended for a credit report and an appraisal of the real estate conducted inconnection with the loan application, may be made if a loan secured by asubordinate mortgage or deed of trust is not made. Such charge:
1. Shall not exceed one percent of the amount of the loan applied for; but inno event shall such charge exceed $50 or one-half of such costs, whichever isless; and
2. May be made only if the lender commits to make the loan. Such commitmentshall be in writing and signed by the lender or a person who the lender hasauthorized to execute such documents.
D. Any loan secured by a subordinate mortgage or deed of trust on residentialreal estate upon which the interest is charged at an annual interest rate onthe unpaid balance thereof shall be subject to the following provisions:
1. Such a loan may be lawfully enforced at the annual interest rate stated inthe contract of indebtedness on the principal amount of the loan. Such annualinterest rate may vary in accordance with an exterior standard;
2. In addition to the annual interest rate permitted by subdivision 1, thelender may charge the borrower a loan fee not exceeding five percent of theprincipal amount of the loan, provided that such loan fee shall not beimposed more often than once each 18 months except to the extent that newmoney is advanced within such 18-month period by a renewal or additionalloan. Such loan fee may only be reimposed by the lender upon a borrower inconnection with the refinancing of a loan made pursuant to this subsection;and
3. The lender may charge the borrower with the actual costs of the loan aspermitted by § 6.2-328.
E. The rates, charges and other provisions permitted or required by thissection or by § 6.2-328 shall apply to all loans secured by a subordinatemortgage or deed of trust, including, without limitation, (i) single maturityloans, (ii) amortizing loans, and (iii) loans secured by a credit line deedof trust as permitted by § 55-58.2.
F. Except for the loan fee permitted in this section, no discount, initialinterest, points or charges by any other name may be collected, charged oradded to a loan secured by a subordinate mortgage or deed of trust uponresidential real estate.
G. The provisions of this section shall not apply to any loan by an exemptsubordinate mortgage lender.
H. For the purpose of this section, an interest rate that varies inaccordance with any exterior standard, or that cannot be ascertained from thecontract without reference to any exterior circumstances or documents, shallbe enforceable as agreed in the contract of indebtedness or other signedagreement.
I. The borrower under any loan to which the provisions of this section applymay assert any defense or claim he may have under §§ 6.2-304 and 6.2-305against any assignee or transferee of the contract of indebtedness.
(1987, c. 622, §§ 6.1-330.59, 6.1-330.69, 6.1-330.71; 1991, c. 157; 1996, c.243; 2010, c. 794.)
