                                 CODE OF VIRGINIA

CHARGES ALLOWED ON LOAN SECURED BY SUBORDINATE MORTGAGE (§ 6.2-328)

A. Any lender making a loan secured by a subordinate mortgage or deed of trust
may require the borrower to pay, in addition to the loan fee and interest
permitted by § 6.2-327, the actual cost of a credit report, title examination,
title insurance, mortgage guaranty insurance, recording fees, surveys, attorney
fees, appraisal fees, and a fee to determine if the property securing the loan
is located in a special flood hazard area. No other charges of any kind shall be
imposed on or be payable by the borrower either to the lender or any other party
in connection with such loan other than:

   1. A fee charged by the settlement agent as defined in &#xA7; 55.1-1000;

   2. Late charges in the amount specified in &#xA7; 6.2-400 and a prepayment
   penalty permitted under &#xA7; 6.2-423 that are contracted for; and

   3. Upon default, court costs, attorney fees, trustee&#8217;s commission, and
   other expenses of collection to which the borrower may be subject as otherwise
   permitted by law.

B. Broker&#8217;s or finder&#8217;s fees may be paid by the lender from the loan
fee or interest permitted under &#xA7; 6.2-327. A broker&#8217;s fee,
finder&#8217;s fee, or commission not to exceed five percent of the principal
amount of the loan may be paid by the borrower if the total of the loan fee
permitted under &#xA7; 6.2-327 and the broker&#8217;s fee, finder&#8217;s fee,
or commission does not exceed five percent of the principal amount of the loan.

C. The premium for any insurance required or provided pursuant to &#xA7; 6.2-411
shall not be considered a charge imposed on or payable by the borrower in
connection with the loan.

D. No charge may be imposed or collected, except as permitted by &#xA7; 6.2-327,
if the loan is not made.

E. This section shall not apply to any loan made by (i) a bank, savings
institution, industrial loan association, or credit union or (ii) a seller in a
real estate sales transaction who takes a subordinate mortgage or deed of trust
on such real estate.

F. The borrower under any loan to which the provisions of this section apply may
assert any defense or claim he may have under &#xA7;&#xA7; 6.2-304 and 6.2-305
against any assignee or transferee of the contract of indebtedness.

HISTORY: 1987, c. 622, § 6.1-330.72; 1993, c. 774; 1995, c. 75; 1996, c. 243;
1998, cc. 69, 89; 2010, c. 794.