                                 CODE OF VIRGINIA

ADDITION OF UNPAID INTEREST TO PRINCIPAL BALANCE (§ 6.2-409)

A. For the purpose of this section:
			&#8220;First deed of trust&#8221; or &#8220;first mortgage&#8221; includes
all deeds of trust and mortgages, and amendments thereto, that are made by the
same grantor or mortgagor, secure notes held by the same holder, convey
substantially the same real estate, and are superior to all other deeds of trust
or mortgages on the real estate.
			&#8220;Grantor&#8221; or &#8220;mortgagor&#8221; includes an owner of real
estate, and spouse, who has assumed responsibility for the obligation secured by
such deed of trust or mortgage encumbering the real estate.
			&#8220;Real estate&#8221; includes a leasehold estate of not less than 25
years.

B. Notwithstanding any other statutory or case law relating to compounding of
interest, if regularly scheduled periodic payments on an obligation secured by a
first mortgage or first deed of trust on real estate are insufficient to pay
currently accruing interest on the then principal balance, an agreement in the
contract of indebtedness, or other agreement signed by the borrower, providing
for the addition of such unpaid interest to the principal balance and the future
accrual of interest on such balances, shall be enforceable as written.

C. Disclosure of charges in a disclosure given to the borrower pursuant to
federal disclosure laws or regulations and acceptance of the loan proceeds by
the borrower shall be deemed an agreement signed by the borrower within the
meaning of this section.

HISTORY: 1987, c. 622, § 6.1-330.69; 2010, c. 794.