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Introduced Version House Bill 3097 History

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H. B. 3097

(By Delegates Guthrie, Moore and Webster)

[Introduced March 12, 2009; referred to the

Committee on Banking and Insurance then the Judiciary.]

A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §46A-2-140, relating to the prevention of predatory lending practices.

Be it enacted by the Legislature of West Virginia:

That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new section, designated §46A-2-140, to read as follows:


§46A-2-140. Prohibited conduct; restrictions on interests in land as security.

No interest in land shall be taken as security arising out of credit sale, consumer loan or rent-to-own agreement:

(1) In which the loan, agreement or sale is not underwritten to determine whether the borrower can afford to repay consistent with the terms of the loan or sale;

(2) Which does not include the obligation to engage in comprehensive loss mitigation;

(3) In which the consumer refinances an existing home-secured loan without achieving a net tangible benefit;

(4) In which income verification is not a part of the consumer loan underwriting;

(5) Which, notwithstanding section one hundred ten, article three of this chapter, has a prepayment penalty in connection therewith;

(6) In which a trust deed allows for the substitution of the trustee without the consent of both parties, absent the death, disability or other inability to serve of the original agreed upon trustee; or

(7) In which the consumer is charged a rate of finance charge higher than that for which the consumer qualifies.

As used in this section only, "consumer loan" does not include a "consumer loan" made onsite by a depository institution.

"Rent-to-own agreement" is to be given the same definition as the term is defined in subdivision (17), section five, article one, chapter forty-six-b of this code.

NOTE: The purpose of this bill is to address the causes of the current foreclosure crisis and generally protect consumers from losing their homes as a result of the subprime and other lenders' overreaching practices and contract provisions, the significance of which consumers cannot be expected to understand.
Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.
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