CHAPTER 285

An Act to amend the Code of Virginia by adding in Title 6 a chapter
_ mumbered 9.1, containing sections numbered 6-852.1 through 6-352.5,
80 as to provide what interest may be charged on certatn loans; what
charges may or may not be made; how certain loans may be dis-
charged; statements to be furnished by lenders; to whom chapter does

not apply; and providing penalty for violations. CH 472]

Approved March 31, 1966

Be it enacted by the General Assembly of Virginia: |
1. That the Code of Virginia be amended by adding in Title 6 a chapter
numbered 9.1, containing sections numbered 6-352.1 through 6-352.5, as

follows:
: Chapter 9.1

§ 6-352.1. (a) No person, copartnership, association, trust, corpo-
ration or other similar legal entity shall directly or indirectly charge, take
or receive for a loan secured in whole or in part by a mortgage or deed
of trust other than a first mortgage or deed of trust, on residential real
estate improved by the construction thereon of housing consisting of four
or less family dwelling units, an amount in excess of that permitted by
§ 6-253, whether payable directly to the lender or to a third party in
connection with such loan. Provided, further, that the said rates of charge
shall not be made more often than once each thirty-six months by a
renewal or additional loan. The borrower shall have the right to anticipate
payment of his debt in whole or in part at any time and shall receive a
rebate for any unearned interest, which rebate shall be computed in accord-
ance with the Standard Rule of 78. ie

(b) In addition to the investigation fees and interest permitted by
§ 6-253, any such lender may also require the borrower to pay the actual
cost of title examination, title insurance, recording fees, surveys, attorneys’
fees, and appraisal fees. No other charges of any kind shall be made by the
lender or any other party in connection with such loan.

(c) Evidence of fire and extended coverage insurance may be re-
quired by the lender of the borrower and the premium shall not be con-
sidered as a charge. Decreasing term life insurance, in an amount not
exceeding the amount of the loan and for a period not exceeding the term
of the loan, may also be required by the lender of the borrower and the
premium shall not be considered as a charge. Proof of all insurance. issued
in connection with loans subject to this chapter shall be furnished to the
borrower within ten days from the date the loan is closed. ne

(d) No charge may be made if the loan is not made.

§ 6-352.2. (a) Any contract, note, mortgage, or deed of trust made
or received in violation of this chapter shall be null and void and unen-
forceable by the lender or by his assignees, who are agents or principals
of the lender.

(b) Any agreement whereby the borrower waives the benefits of this
chapter or releases any rights he may have acquired by the virtue thereof
shall be deemed to be against public policy and void.

§ 6-352.3. Any person, copartnership, association, trust, corporation
or any other legal entity making on its own behalf, or as agent, broker, or
in other representative capacity on behalf of any other person, copartner-
ship, association, trust, corporation, or any other legal entity, a loan or
real property financing transaction within the regulatory authority of this
chapter, whether lawfully or unlawfully, at the time of the closing shall
furnish the debtor or borrower or grantor in the mortgage, deed of trust
or any other security instrument, a complete and itemized closing state-
ment which shall show in detail all costs and charges, together with any

interest charges, and the disposition of the principal of the loan or
security transaction, and the said detailed closing statement shall be signed
by the borrower and by the lending agency or a representative of the
lending agency, or a responsible officer, in its behalf, and a completed and
signed additional copy retained in the files of the lending agency involved
and available at all reasonable times to the borrower, the borrower's
successor in interest to the secured real property, or the authorized agent
of the borrower or the borrower’s successor, until such time as the security
instrument shall be satisfied in full. A copy of the closing statement shall
be filed with the State Corporation Commission within thirty days after
the loan is closed. |

Any person who makes less than three loans secured by a mortgage
or deed of trust, other than a first mortgage or deed of trust, in a calendar
year shall be exempt from the provisions of this section.

§ 6-352.4. This chapter shall not apply to loans made by any lender
licensed by, and under the supervision of the State Corporation Commis-
sion or the federal government.

§ 6-352.5. Any violation of § 6-352.8 shall be a misdemeanor.

2. If any portion of this chapter shall be found to be unconstitutional,
it shall not affect the validity of the remaining portions of the chapter.