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The Vermont Statutes Online



Title

08

:
Banking and Insurance






Chapter

073

:
LICENSED LENDERS











 

§

2218. Segregated accounts

(a) All

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has withdrawn the loan application in writing, or such mortgage broker or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.)