Senate Bill No. 429
(By Senator Wooton)
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[Introduced February 4, 1999;
referred to the Committee on the Judiciary.]
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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
certain loans or credit sales for home improvement.
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 certain loans or credit sales for home improvements.
(a) In connection with a nonrevolving purchase money
consumer loan for work and materials used in making improvements
or repairs on homestead property solicited outside of a regular
business establishment of the seller, a consensual security
interest in a consumer's real property homestead or factory-built
home used as a homestead is valid only if:
(1) The contract for the work and material is not executed
by the consumer or spouse before the twelfth day after the
consumer makes written application for any consumer loan for the
work and material, unless the work and material are necessary to
complete immediate repairs to conditions on the homestead
property that materially affect the health or safety of the
consumer or person residing in the homestead and the owner of the
homestead acknowledges such in writing; and
(2) All documents involved with the extension of credit,
including the consensual security interest, are executed by the
consumer only at the office of a third-party lender making an
extension of credit for the work and material or the offices of an attorney at law.
(b) In connection with a consumer credit sale for
improvements or repairs on homestead property solicited outside
of a regular business establishment of the seller, a consensual
security in a consumer's real property homestead or factory-built
home used as a homestead is valid only if:
(1) The contract for the work and material is not executed
by the consumer or spouse before the twelfth day after the
consumer makes written application for any consumer loan for the
work and material, unless the work and material are necessary to
complete immediate repairs to conditions on the homestead
property that materially affect the health or safety of the
consumer or person residing in the homestead and the owner of the
homestead acknowledges such in writing;
(2) There is no substantial disparity between the price of
the work and materials sold and the value of work and materials
measured by the price at which similar work and materials are
available in the community; and
(3) The consensual security interest is executed by the
consumer and consumer's spouse only at the office of an attorney
or the seller before a notary public who explains the ramifications of the security instrument.
(c) A mortgage, trust deed or other lien in violation of
this section shall be per se unconscionable and subject to the
provisions of section one hundred twenty-one of this article.
NOTE: The purpose of this bill is, with regard to certain
loans, establishing limitations on security interests in
homestead property.
This section is new; therefore, strike-throughs and
underscoring have been omitted.