Current through Register Vol. 41, No. 3, September 23, 2024
A. If a commitment is issued and accepted,
the commitment agreement shall be signed by the applicant and a person
authorized to sign such agreement on behalf of a mortgage lender and include
the following:
1. The name of the mortgage
lender;
2. Identification of the
property intended to secure the mortgage loan (this does not require a formal
legal description);
3. The
principal amount and term of the loan;
4. The interest rate and points for the
mortgage loan if the commitment agreement is also a lock-in agreement or a
statement that the mortgage loan will be made at the mortgage lender's
prevailing rate and points for such loans three days prior to
settlement;
5. The amount of any
commitment fee and the time within which the commitment fee must be
paid;
6. Whether or not funds are
to be escrowed and for what purpose;
7. Whether or not private mortgage insurance
is required;
8. The length of the
commitment period;
9. A statement
that if the loan is not closed within the commitment period, the mortgage
lender is no longer obligated by the commitment agreement and any commitment
fee paid by the applicant will be refunded only under the circumstances set
forth in subsection C of this section and such other circumstances as are set
forth in the commitment agreement; and
10. Any other terms and conditions of the
commitment agreement required by the lender.
B. If a lock-in agreement is issued to a
consumer by a mortgage lender, or a mortgage broker acting on behalf of the
mortgage lender, it shall be signed by a representative of the mortgage lender
or mortgage broker and include the following:
1. The name of the mortgage lender or
mortgage broker issuing the lock-in agreement;
2. The interest rate and points for the
mortgage loan, and if the rate is an adjustable rate, the initial interest rate
and a brief description of the method of determining the rate (such as the
index and the margin);
3. The
amount of any lock-in fee and the time within which the lock-in fee must be
paid;
4. The length of the lock-in
period;
5. A statement that if the
loan is not closed within the lock-in period, the mortgage lender is no longer
obligated by the lock-in agreement and any lock-in fee paid by the applicant
will be refunded only under the circumstances set forth in subsection D of this
section and such other circumstances as are set forth in the lock-in
agreement;
6. A statement that any
terms not locked in by the lock-in agreement are subject to change until three
days prior to settlement; and
7.
Any other terms and conditions of the lock-in agreement required by the
mortgage lender or mortgage broker acting on behalf of a mortgage
lender.
C. If an
applicant has paid any commitment fee, and the mortgage loan is not closed due
to any of the following, such commitment fee shall be refunded:
1. The commitment period was not a reasonable
period of time given the prevailing market conditions at the time the
commitment agreement was entered into;
2. The mortgage loan is turned down because
of the applicant's lack of creditworthiness; or
3. The mortgage loan is turned down because
of the appraised value of the property intended to secure the mortgage
loan.
D. If an applicant
has paid any lock-in fee and the loan is not closed because the lock-in period
was not a reasonable period of time given the prevailing market conditions at
the time the lock-in agreement was entered into, such lock-in fee shall be
refunded.
E. A mortgage broker
shall not issue a lock-in agreement to a consumer unless the mortgage broker
has actually locked in the mortgage loan, including the applicable interest
rate, points, and other terms, with a mortgage lender. A mortgage broker shall
maintain supporting written documentation from the mortgage lender of all
lock-in information for at least three years from the date the lock-in
expires.
Statutory Authority: §§
6.2-1613 and
12.1-13 of the Code of Virginia
(10VAC5-160-10 through
10VAC5-160-90
).
