The Vermont Statutes Online
Banking and Insurance
2218. Segregated accounts
permitted charges paid by loan applicants or borrowers to a lender or a
mortgage broker subject to this chapter shall be deposited in one or more
accounts maintained at a bank approved by the commissioner, and with respect to
such funds the lender or mortgage broker shall act as a fiduciary. Such account
or accounts shall be segregated from all other accounts of the lender or
broker. No permitted charges shall be used in the conduct of a lender's or a
broker's personal affairs, nor in a lender's or a broker's business affairs not
specifically related to the applicant or borrower.
(b) Such lender
or mortgage broker may withdraw funds from the segregated account for payment
directly to third parties for authorized fees.
(c) Such lender
or mortgage broker may withdraw funds from the segregated account for
commissions to which it is entitled for services actually performed. Services
are deemed to have been performed when a loan has closed, the loan applicant
has withdrawn the loan application in writing, or such mortgage broker or
lender has provided to the loan applicant or borrower written notice that the
loan has been denied.
(d) Such lender
or mortgage broker may return funds from the segregated account to the borrower
if not prohibited by the application or contract.
(e) Such lender
or mortgage broker shall maintain complete and accurate account records,
including, at a minimum, the source of all deposits, the nature of all
disbursements, the date and amount of each transaction and the name of the loan
applicant or borrower. All documents pertaining to account activity shall be
produced upon request of the commissioner. (Added 1995, No. 162 (Adj. Sess.), §
19, eff. Jan. 1, 1997; amended 2009, No. 29, § 1.)