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The Vermont Statutes Online



Title

08

:
Banking and Insurance






Chapter

073

:
LICENSED LENDERS











 

§

2216. Mortgage lending; specific requirements; exceptions

Every licensee

engaging in the making of loans secured by a lien against real estate located

in this state, whether conducting its affairs as an agent or principal and

whether operating from facilities within the state or by mail, telephone or by

electronic means, shall comply with the general provisions of this chapter

unless exempted herein. A licensee making such loans through a third person,

shall only make loans through a person licensed as a mortgage broker and as a

mortgage loan originator under this chapter, unless such third person is exempt

from such licensing provisions. Any lender who makes such loans through a third

person required to be licensed and not so licensed, in addition to being

subject to all applicable penalties under Vermont law, shall be responsible for

the acts or omissions of the third person as a principal is responsible for the

acts and omissions of its agent. Every licensee making loans secured by a lien

against real estate shall comply with sections 10403 and 10404, and subchapter

2 of chapter 200 of this title, and shall also be subject to the following

specific limitations:

(1) For loans

secured by a first lien, the term shall not exceed 480 months, and the licensees

may not exceed the interest rate permitted by subdivision 41a(b)(8) of Title 9.

All such lien documents shall include a power of sale pursuant to section 4531a

et seq. of Title 12. The limitations on permitted charges contained in sections

2231 and 2233 of this title and sections 42, 44, and 46 of Title 9 shall not

apply to any loan within the scope of 12 U.S.C. § 1735f-7a. Permitted charges

shall be as specified in sections 42, 44, and 46 of Title 9 for any loan

secured by a first lien on real estate that is not included within the scope of

12 U.S.C. § 1735f-7a, instead of sections 2231 and 2233 of this title.

(2) For loans

secured by a subordinate lien, the term shall not exceed 360 months, and the

licensees may not exceed the interest rate permitted by chapter 4 of Title 9.

All such lien documents shall include a power of sale pursuant to section 4531a

et seq. of Title 12. Permitted charges for loans secured by a subordinate lien

shall be as specified in sections 42, 44, and 46 of Title 9, instead of

sections 2231 and 2233 of this title.

(3) No licensee

shall take a lien upon real estate as security for any loan made under this

chapter, except such lien as is created by law upon the recording of a judgment

or such lien as secures a loan in principal amount in excess of $3,000.00 at

the time of making.

(4) Interest

shall be computed by the actuarial method in accordance with subsection 41a(d)

of Title 9.

(5) Any loan

secured by a lien on real estate, except a commercial loan, which does not

contain a fixed rate or substantially equal payments for full amortization

within the repayment period shall conform to federal regulations on alternative

mortgages where applicable by reason of federal law or action of the

commissioner.

(6) This section

shall not apply to commercial loans. (Added 1983, No. 35, § 1; amended 1989,

No. 244 (Adj. Sess.), § 1; 1995, No. 162 (Adj. Sess.), § 17, eff. Jan. 1, 1997;

1997, No. 23, § 12, eff. Jan. 1, 1997; 1997, No. 98 (Adj. Sess.), § 3, eff.

April 16, 1998; 1999, No. 153 (Adj. Sess.), § 15, eff. Jan. 1, 2001; 2009, No.

29, § 1.)