The Vermont Statutes Online

Title 8 : Banking and Insurance

Chapter 204 : Powers of Financial Institutions

Subchapter 003 : LOANS

• § 14302. Real estate loans

  (a) Clear title. All loans secured by mortgages on real estate shall be supported by written evidence satisfactory to the financial institution that title to the security is marketable and the lien is valid and enforceable. A mortgage on lands subject to lease under which rents are reserved to the owner, with all of the owner’s rights and options under the lease collaterally assigned to the financial institution as security or a mortgage upon lands impressed with a public use, sometimes known as lease, society, or glebe lands, but held under a durable lease, shall not be deemed to be subordinate to such lease or public use.

  (b) Appraised value. The appraisal of real estate securing a federally related transaction entered into by a financial institution shall comply with the regulations of the Federal Deposit Insurance Corporation, as amended and codified at 12 C.F.R. Part 323. The appraisal of real estate securing a nonfederally related transaction entered into by a financial institution shall comply with the federal supervisory agencies’ interagency guidelines, as amended.

  (c) Servicing of loans. A financial institution may contract with another financial institution, corporation, or association whose transactions are in whole or in part the handling and servicing of mortgage loans, to handle and service loans in its behalf. Whenever such a contract is made, the financial institution shall not lose or suffer any impairment of any right of deduction or offset it might have against any one liable for the mortgage debt.

  (d) Home loan escrow accounts. Any financial institution that requires a home loan escrow account to be established and maintained by a borrower shall follow the provisions of section 10404 of this title.

  (e) Loans insured or guaranteed by federal law. Any mortgage on real estate given to secure a loan insured or guaranteed by the federal housing commissioner, the administrator of Veterans Affair’s or the administrator of the Small Business Administration, under the National Housing Act, the Servicemen’s Readjustment Act of 1944 or the Small Business Act, respectively, as amended, shall not be subject to the provisions of any law of this State prescribing the nature, amount, or form of security, or manner of repayment, or requiring security upon which loans or advances of credit may be made, or prescribing or limiting the period or principal amount of which loans may be made, or prescribing or limiting the interest that may be charged or other charges that may be made or taken upon any loan or advance of credit. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)