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Virginia Bans Split Closings

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The Virginia Bureau of Insurance today announced in an administrative letter that it has effectively banned split closings, which is an industry term for a practice where closing services are divided between two or more settlement agents.

In a letter to all licensed and registered settlement agents in the state, dated February 4, 2022 with the subject line “Split Settlements,” the Bureau said that applicable laws and regulations do not allow for the split settlement practice and goes into details, which we will bring you in a future post.

“[T]he Bureau’s position is that Virginia’s applicable laws and regulations provide for a single settlement agent, identified by the buyer, who is responsible for all of the escrow, closing or settlement services prescribed by the Code,” according to the letter. “As such the Bureau views participation in split settlement arrangements by title settlement agents as a violation of applicable Virginia laws and regulations.”

Federal Title & Escrow Company has long held the stance that split closings are overly expensive to consumers and complicate the closing process. We fully support this ruling, and going forward, in compliance with Virginia, Federal Title and Escrow Company will no longer allow split settlements to take place.

Read the entire administrative letter »

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