Va. Code Ann. § 55-519 (West 2013) requires a seller to deliver to a borrower a particular disclosure statement, promulgated by the Virginia Real Estate Board, with representations by the seller of the conditions of the property being sold. Under Ibid. § 55-520(A), this disclosure is required to be provided prior to the execution of the real estate purchase contract.
Should this disclosure not be provided prior to such time, the borrower may terminate the sales contract at or prior to the earliest of six different events. One of these events is when the borrower applies for a mortgage loan and the application contains “a disclosure that the right of termination shall end upon the application for the mortgage loan.”
In order to help our clients begin originating and processing their loans without wondering whether the sales contract will be canceled or not during such process, we will begin providing a new Virginia Addendum to Loan Application (Cx17208), which will disclose to borrowers that their right to terminate the sales contract will end once they submit their application. Cx17208 will print in Initial Disclosure packages for purchase loans, but not for construction loans (due to the exemption extended to such loans under Ibid. § 55-518[A]).
This document will begin printing on July 9, 2013. If you have any questions or concerns about this change, please contact Client Support at 1.800.497.3584.
July 2, 2013