COMMITTEE SUBSTITUTE

FOR

H. B. 2948




(By Delegates H. White, R. M. Thompson,

Perry and Hrutkay )


(Originating in the Committee on the Judiciary)

[February 27, 2003]

A BILL to amend and reenact section one hundred fifteen, article two, chapter forty-six-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, relating to expenses of realizing on security interests; allowing recovery of certain expenses when a consumer requests discontinuation of efforts to realize on security interests, and providing notification to consumer of certain charges within a twelve- month period.

Be it enacted by the Legislature of West Virginia:
That section one hundred fifteen, article two, chapter forty-six-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted to read as follows:
ARTICLE 2.CONSUMER CREDIT PROTECTION.
§46A-2-115.Limitation on default charges.
(a)Except for reasonable expenses including costs and fees authorized by statute, incurred in realizing on a security interest, the agreement with respect to a consumer credit sale or a consumer loan may not provide for charges as a result of default by the consumer other than those authorized by this chapter.
(b) A consumer loan secured by real property: (1) originated by a bank or savings and loan association, or an affiliate, and not solicited by an unaffiliated broker; or (2) held by a federal home loan bank, the federal national mortgage association, the federal home loan mortgage corporation, the government national mortgage association, the West Virginia housing development fund, or (3) insured or guaranteed by the farmers home administration, the veteran's administration, department of housing and urban development, which includes in the loan agreement a reinstatement period beginning with the trustee notice of foreclosure and ending prior to foreclosure sale, may, in addition to those authorized by this chapter, permit the recovery of the following actual reasonable reinstatement period expenses paid or owed to third parties: (i) Publication costs paid to the publisher of the notice; (ii) appraisal fee when required by the circumstances or by a regulatory authority and only after the loan has been referred to a trustee for foreclosure; (iii) title check and lienholder notification fee not to exceed two hundred dollars, as adjusted from time to time by the increase in the consumer price index for all consumers published by the United States Department of Labor; and (iv) certified mailing costs.
(c) All amounts paid to a creditor arising out of any consumer credit sale or consumer loan shall be credited upon receipt against payments due: Provided, That amounts received and applied during a cure period will not result in a duty to provide a new notice of right to cure; and provided further that partial amounts received during the reinstatement period set forth in subsection (b) of this section do not create an automatic duty to reinstate and may be returned by the creditor. Default charges shall be accounted for separately; those set forth in subsection (b) arising during such a reinstatement period may be added to principal.
(d) At least once every twelve months, the holder or servicer of each consumer loan secured by real property against which the creditor assesses any default charge, and: (1) Not serviced by the originating lender or its affiliate or their successors by merger, (2) not held by a federal home loan bank, the federal national mortgage association, the federal home loan mortgage corporation, the government national mortgage association, the West Virginia housing development fund, or (3) not insured or guaranteed by the farmers home administration, the veteran's administration, department of housing and urban development, shall transmit to the consumer an accounting of every default charge assessed within the previous twelve months, including the date, amount and nature of the cost.
For purposes of this subsection, this notice requirement does not apply to delinquency charges permitted under sections one hundred twelve and one hundred thirteen, article three of this chapter; credit line over-the-limit fees; deferral charges permitted under section one hundred fourteen, article three of this chapter; collateral protection insurance permitted under section one hundred nine-a, article three of this chapter; and  advances to pay taxes.
(e) A provision in violation of this section is unenforceable. The amendments to this section by acts of the Legislature in the regular session of two thousand three are a clarification of existing law and shall be retroactively applied to all agreements in effect on the date of passage of the amendments, except where controversies arising under those agreements are pending prior to the date of passage of the amendments.