Va. Code Ann. tit. 55.1, ch. 9

Va. Code Ann. tit. 55.1, ch. 9
in effect

Va. Code Ann. § 55.1-900 Definitions

As used in this chapter, unless the context requires a different meaning: "Disbursement of loan funds" means the delivery of the loan funds by the lender to the settlement agent in one or more of the following forms: 1. Cash; 2. Wired funds; 3. Certified check; 4. Checks issued by the Commonwealth or a political subdivision of the Commonwealth; 5. Cashier's check, or teller's check with equivalent funds availability in conformity with the federal Expedited Funds Availability Act (12 U.S.C. § 4001 et seq.); 6. Checks issued by a financial institution, the accounts of which are insured by an agency of the federal or state government, which checks are drawn on a financial institution located within the Fifth Federal Reserve District, the accounts of which are insured by an agency of the federal or state government; 7. Drafts issued by a state chartered or federally chartered credit union; 8. Checks issued by an insurance company licensed and regulated by the State Corporation Commission, which checks are drawn on a financial institution located within the Fifth Federal Reserve District, the accounts of which are insured by an agency of the federal government; or 9. Checks issued by a state or federal savings and loan association or savings bank operating in the Commonwealth, which checks are drawn on the Federal Home Loan Bank of Atlanta. "Disbursement of settlement proceeds" means the payment of all proceeds of the transaction by the settlement agent to the persons entitled to such proceeds. "Lender" means any person regularly engaged in making loans secured by mortgages or deeds of trust on real estate. "Loan closing" means the time agreed upon by the borrower and lender, when the execution of the loan documents by the borrower occurs. "Loan documents" means the note evidencing the debt due the lender, the deed of trust, or the mortgage securing the debt due the lender and any other documents required by the lender to be executed by the borrower as a part of the transaction. "Loan funds" means the gross or net proceeds of the loan to be disbursed by the lender at loan closing. "Settlement" means the time when the settlement agent has received the duly executed deed, loan funds, loan documents, and other documents and funds required to carry out the terms of the contract between the parties and the settlement agent reasonably determines that prerecordation conditions of such contracts have been satisfied. A determination by a settlement agent that prerecordation conditions have been satisfied shall not control the rights and obligations of the parties under the contract, including whether settlement has occurred under the terms and conditions of the contract. "Parties," as used in this definition, means the seller, purchaser, borrower, lender, and settlement agent. "Settlement agent" means the person responsible for conducting the settlement and disbursement of the settlement proceeds and includes any individual, corporation, partnership, or other entity conducting the settlement and disbursement of loan proceeds. "Settlement service provider" means any person providing settlement services, as that term is defined under the federal Real Estate Settlement Procedures Act (12 U.S.C. § 2601 et seq.). "Thing of value" means any payment, advance, funds, loan, service, or other consideration. 1980, c. 730, § 6.1-2.10; 1981, c. 86; 1984, c. 118; 1987, cc. 576, 577; 1990, c. 340; 1991, c. 254; 1999, c. 109 ; 2008, c. 514 ; 2010, c. 794 , § 55-525.8; 2019, c. 712 .

Va. Code Ann. § 55.1-901 Applicability; effect of noncompliance

A. This chapter applies only to transactions involving loans that (i) are made by lenders and (ii) will be secured by first deeds of trust or mortgages on real estate containing not more than four residential dwelling units. B. Failure to comply with the provisions of this chapter shall not affect the validity or enforceability of any loan documents. 1980, c. 730, §§ 6.1-2.11, 6.1-2.14; 1993, c. 530; 2010, c. 794 , § 55-525.9; 2019, c. 712 .

Va. Code Ann. § 55.1-902 Duty of lender

The lender shall, at or before loan closing, cause disbursement of loan funds to the settlement agent. In the case of a refinancing or any other loan where a right of rescission applies, the lender shall, within one business day after the expiration of the rescission period required under the federal Truth in Lending Act (15 U.S.C. § 1601 et seq.), cause disbursement of loan funds to the settlement agent. The lender shall not be entitled to receive or charge any interest on the loan until disbursement of loan funds and loan closing has occurred. 1980, c. 730, § 6.1-2.12; 1993, c. 530; 2010, c. 794 , § 55-525.10; 2019, c. 712 .

Va. Code Ann. § 55.1-903 Duty of settlement agent

A. Prior to settlement, the settlement agent shall exercise ordinary care to reasonably ascertain the identity of a seller of real property. Methods of exercising such ordinary care may include (i) obtaining satisfactory evidence of identity as defined in § 47.1-2 ; (ii) requiring multiple forms of photo identification; (iii) a written statement from the seller's attorney that he has reasonably ascertained the identity of the seller of the real property; (iv) reviewing land records for the subject property; (v) comparing signatures; (vi) performing a credit check; or (vii) asking detailed questions about the subject property. B. The settlement agent shall cause recordation of the deed, the deed of trust, or the mortgage or other documents required to be recorded and shall cause disbursement of settlement proceeds within two business days of settlement. A settlement agent may not disburse any or all loan funds or other funds coming into its possession prior to the recordation of any instrument except (i) funds received that are overpayments to be returned to the provider of such funds, (ii) funds necessary to effect the recordation of instruments, or (iii) funds that the provider has by separate written instrument directed to be disbursed prior to recordation of any instrument. Additionally, in any transaction involving the purchase or sale of an interest in residential real property, the settlement agent shall provide notification to the purchaser of (a) the availability of owner's title insurance as required under § 38.2-4616 and (b) the purchaser's right under § 55.1-300.1 to remove a restrictive covenant prohibited by § 36-96.6 that is contained in an instrument affecting the title of the property and disclosed as the result of a title search performed pursuant to the transaction. C. A settlement agent who uses any of the methods to reasonably ascertain the identity of a seller of real property described in subsection A shall not be liable for any act or omission resulting from his reliance on such information when moving forward with a settlement and recordation of the deed, deed of trust, or mortgage or other documents required to be recorded pursuant to the settlement, provided that the (i) settlement agent did not have actual knowledge that the information provided was false or (ii) act or omission was not a result of the settlement agent's gross negligence or willful misconduct. 1980, c. 730, § 6.1-2.13; 1987, c. 576; 1992, c. 733; 1996, c. 883 ; 2010, c. 794 , § 55-525.11; 2019, c. 712 ; 2026, cc. 359 , 364 , 365 .

Va. Code Ann. § 55.1-905 Disclosure of affiliated business by settlement service providers

Any person making a referral to an affiliated settlement service provider shall disclose the affiliation in accordance with the federal Real Estate Settlement Procedures Act (12 U.S.C. § 2601 et seq.). Such disclosure shall be provided regardless of the amount of the person's actual ownership interest in the affiliated provider. However, if the person's ownership interest is one percent or less of the capital stock of a corporation or entity with a class of securities registered under the federal Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.), the disclosure shall not be required. If the person's ownership interest is greater than one percent, then the disclosure shall include the percentage of ownership, or, if the person making the referral owns more than 50 percent of the affiliated business, the disclosure shall state that the settlement service provider is a subsidiary of the person making the referral. 1999, c. 688 , § 6.1-2.13:2; 2010, c. 794 , § 55-525.13; 2011, c. 82 ; 2019, c. 712 .

Va. Code Ann. § 55.1-906 Disclosure of charges for appraisal or valuation using automated or other valuation mechanism

Any lender providing a loan secured by a first deed of trust or mortgage on real estate containing not more than four residential dwelling units shall disclose on the settlement statement or closing disclosure, as those terms are defined in § 55.1-1000 , any fee charged to the borrower for an appraisal, as that term is defined in § 54.1-2009 , and any fee charged to the borrower for a valuation or opinion of value of the property prepared using an automated or other mechanism prepared by a person who is not licensed as an appraiser under Chapter 20.1 (§ 54.1-2009 et seq.) of Title 54.1. 2008, c. 400 , § 6.1-2.13:3; 2010, c. 794 , § 55-525.14; 2016, c. 619 ; 2019, c. 712 .

Va. Code Ann. § 55.1-907 Penalty

Any persons suffering losses due to the failure of the lender or the settlement agent to cause disbursement as required by this chapter shall be entitled to recover, in addition to other actual damages, double the amount of any interest collected in violation of § 55.1-902 plus reasonable attorney fees incurred in the collection of such damages and interest. 1980, c. 730, § 6.1-2.15; 2010, c. 794 , § 55-525.15; 2019, c. 712 .
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://law.lis.virginia.gov/vacode/title55.1/chapter9/Fetched: 10/16/2026