Virginia Removes Prohibitions on Real Estate Brokers Acting as Mortgage Brokers and Requires New Disclosure

Virginia recently removed provisions prohibiting a real estate broker or real estate salesperson from acting as a mortgage broker in connection with the same transaction in which the broker or salesperson has, or will, receive compensation.  In addition, the new law provides that if a mortgage broker negotiates, places or finds a mortgage loan and acts as a real estate broker or salesperson in connection with the sale of the real estate securing such loan, the mortgage broker must conspicuously provide to the borrower at the time the mortgage broker’s services are first offered the following written disclosure:

YOU ARE HEREBY NOTIFIED THAT YOU ARE NOT REQUIRED TO ENTER INTO ANY ARRANGEMENT FOR REAL ESTATE BROKER OR REAL ESTATE SALESPERSON SERVICES WITH A REAL ESTATE BROKER OR REAL ESTATE SALESPERSON TO WHOM WE HAVE REFERRED YOU.

YOU ARE HEREBY NOTIFIED THAT [NAME OF MORTGAGE BROKER] WILL BE RECEIVING COMPENSATION FOR PROVIDING BOTH MORTGAGE BROKER SERVICES AND REAL ESTATE BROKER OR REAL ESTATE SALESPERSON SERVICES IN CONNECTION WITH THE SALE OF THE REAL ESTATE THAT SECURES THIS MORTGAGE LOAN.

YOU ARE HEREBY NOTIFIED THAT WE DO NOT REPRESENT ALL OF THE LENDERS IN THE MARKET AND THE LENDERS WE DO REPRESENT MAY NOT OFFER THE LOWEST INTEREST RATES OR BEST TERMS AVAILABLE TO YOU.

These new provisions become effective on July 1, 2022.