Senate Bill No. 139
(By Senator Wooton)
____________
[Introduced January 19, 2000; referred to the Committee
on the Judiciary.]
____________
A BILL to amend article two, chapter forty-six-a of the code of
West Virginia, one thousand nine hundred thirty-one, as
amended, by adding thereto a new section, designated section
one hundred forty, relating to establishing limitations on
security interests in homestead property in connection with
nonrevolving consumer loans or consumer credit sales for
home improvements.
Be it enacted by the Legislature of West Virginia:
That article two, chapter forty-six-a of the code of West
Virginia, one thousand nine hundred thirty-one, as amended, be
amended by adding thereto a new section, designated section one
hundred forty, to read as follows:
ARTICLE 2. CONSUMER CREDIT PROTECTION.
§46A-2-140. Additional limitations on security interests in
homestead property in connection with a
nonrevolving consumer loan or a consumer credit
sale for home improvements.
(a) A nonrevolving consumer loan for labor and material to
improve or repair the consumer's homestead property, including a
factory-built home, creating a consensual security interest in
the homestead property that is solicited outside of a seller's
regular place of business is valid if:
(1) The contract for labor and material is executed by the
consumer twelve days after the consumer applies in writing for a
nonrevolving consumer loan for labor and material, unless the
consumer states in writing that the labor and material are
necessary to immediately repair material defects and conditions
on the homestead property affecting the health or safety of the
consumer or others residing on the homestead property; and
(2) The nonrevolving consumer loan creating a consensual
security interest in the consumer's homestead property is
executed and notarized by the consumer at the office of a
third-party lender, accountant or attorney at law who informs the
consumer that a default on the loan may result in a foreclosure action on the consumer's homestead property.
(b) A consumer credit sale for improvements or repairs on
a consumer's homestead property, including a factory-built home,
that creates a consensual security interest in the homestead
property and that is solicited outside the seller's regular place
of business is valid if:
(1) The consumer credit sale for labor and material is
executed by the consumer twelve days after the consumer applies
in writing for a consumer credit sale for labor and material,
unless the consumer states in writing that the labor and material
are necessary to immediately repair material defects or
conditions on the homestead property affecting the health or
safety of the consumer or others residing on the homestead
property;
(2) No substantial disparity exists between the selling
price of the labor and material and the value of the labor and
material in the community; and
(3) The consumer credit sale creating a consensual security
interest in the consumer's homestead property is executed and
notarized by the consumer at the office of an accountant or
attorney at law who informs the consumer that a default on the credit sale may result in a foreclosure action on the consumer's
homestead property.
(c) A nonrevolving consumer loan, consumer credit sale,
mortgage, trust deed or other lien in violation of this section
is per se unconscionable and subject to the provisions of section
one hundred twenty-one of this article.
NOTE: The purpose of this bill is to regulate the means
through which a seller can take a security interest in the
homestead property of a consumer for nonrevolving consumer loans
and consumer credit sales for repairs and improvements that are
solicited outside of the seller's regular place of business.
This section is new; therefore, strike-throughs and
underscoring have been omitted.