Purpose

• Before the Wet Settlement Act became law, oftentimes sellers signed over their homes without payment. Sometimes a seller waited up to 2 weeks to receive their payment from the lending institution. Therefore, the Wet Settlement Act was put into effect to protect the seller from payment delays and other potential breaches of contract.
  
  

Lender Assurance

• However, the lender has the assurance of the settlement agent, by law, that the funds won't be released to the seller until the property lien is recorded in the land records.
  
  

Violation

• In accordance with the Code of Virginia-Title 6.1 Banking And Finance-Section 6.1-2.15 Penalty, "Any persons suffering losses due to the failure of the lender or the settlement agent to cause disbursement as required by this chapter, shall be entitled to recover, in addition to other actual damages, double the amount of any interest collected in violation of § 6.1-2.12 of this chapter plus reasonable attorneys' fees incurred in the collection thereof."
  
  Penalty codes may vary from state to state from the particulars for Virginia violations. Consult your Realtor or settlement attorney if the Wet Settlement Act applies in your state and about the penalty code that applies to it.