A Virginia homeowner refinances her existing deed of trust with a new lender. The original deed of trust is being released and a new deed of trust is being recorded. Which of the following statements is correct regarding the recordation tax obligation on the new deed of trust in Virginia?
Correct Answer
C) The homeowner (trustor) pays the recordation tax on the new deed of trust being recorded
In Virginia, the recordation tax on a deed of trust is imposed whenever a deed of trust is recorded, regardless of whether a sale is occurring. Under Virginia Code § 58.1-803, the trustor (borrower/homeowner) is responsible for the recordation tax on the deed of trust. A refinance creates a new deed of trust that must be recorded, and the homeowner as trustor owes the applicable recordation tax on that new instrument.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Predatory lending refers to unfair, deceptive, or abusive lending practices that impose unjustified terms on borrowers, often targeting vulnerable populations. It includes practices like excessive fees, inflated appraisals, and unnecessary refinancing.
RESPA is a federal law that requires lenders to provide borrowers with information about settlement costs, prohibits kickbacks and referral fees, and limits escrow account deposits. It applies to federally related mortgage loans.
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
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