Vermont § 14302 - Real estate 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.)