Introduced Version
Senate Bill 361 History
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Key: Green = existing Code. Red = new code to be enacted
Senate Bill No. 361
(By Senators Unger and Nohe)
____________
[Introduced February 25, 2013; referred to the Committee on
Banking and Insurance; and then to the Committee on the
Judiciary.]
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A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new article, designated §31-17B-1, §31-17B-2,
§31-17B-3, §31-17B-4, §31-17B-5, §31-17B-6, §31-17B-7,
§31-17B-8, §31-17B-9, §31-17B-10, §31-17B-11, §31-17B-12,
§31-17B-13, §31-17B-14, §31-17B-15, §31-17B-16, §31-17B-17,
§31-17B-18, §31-17B-19, §31-17B-20 and §31-17B-21, all
relating to creating the West Virginia Homeowner Bill of
Rights; stating legislative findings and purpose in relation
to foreclosures in the state generally; requiring mortgage
servicers to contact the borrower prior to filing a notice of
default; requiring mortgage servicers to explore options for
the borrower to avoid foreclosure; requiring the borrower to
be provided with specified information in writing prior to
recordation of a notice of default; establishing additional procedures to be followed regarding a first lien loan
modification application and the denial of an application;
providing for a borrower's right to appeal a denial;
authorizing a borrower to seek an injunction and damages for
violations; authorizing the greater of treble actual damages
or $50,000 in statutory damages if a violation is found to be
intentional or reckless or resulted from willful misconduct;
providing that violations by licensees of certain state
agencies are also violations of those respective licensing
laws; requiring a mortgage servicer who conducts more than one
hundred seventy-five foreclosure sales per year or annual
reporting period to establish a single point of contact with
the borrower; requiring that, before recording or filing any
of certain documents, a mortgage servicer shall ensure that it
has reviewed competent and reliable evidence to substantiate
the borrower's default and the right to foreclose, including
the borrower's loan status and loan information; authorizing
administrative enforcement against licensees by certain state
agencies; defining terms; setting forth requirements;
establishing effective and termination dates; and authorizing
rulemaking.
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 article, designated §31-17B-1, §31-17B-2, §31-17B-3, §31-17B-4, §31-17B-5, §31-17B-6, §31-17B-7, §31-17B-8,
§31-17B-9, §31-17B-10, §31-17B-11, §31-17B-12, §31-17B-13,
§31-17B-14, §31-17B-15, §31-17B-16, §31-17B-17, §31-17B-18,
§31-17B-19, §31-17B-20 and §31-17B-21, all to read as follows:
ARTICLE 17B. THE WEST VIRGINIA HOMEOWNER BILL OF RIGHTS.
§31-17B-1. Legislative findings.
The Legislature finds the following:
(1) The country is still reeling from the economic impacts of
a wave of residential property foreclosures that began in 2007. All
of this foreclosure activity has adversely affected property values
and resulted in less money for schools, public safety, and other
public services.
(2) It is essential to the economic health of this state to
mitigate the negative effects on the state and local economies and
the housing market that are the result of continued foreclosures by
modifying the foreclosure process to ensure that borrowers who may
qualify for a foreclosure alternative are considered for, and have
a meaningful opportunity to obtain, available loss mitigation
options. These changes to the state's foreclosure process are
essential to ensure that the current crisis is not worsened by
unnecessarily adding foreclosed properties to the market when an
alternative to foreclosure may be available. Avoiding foreclosure,
where possible, will help stabilize the state's housing market and
avoid the substantial, corresponding negative effects of foreclosures on families, communities and the state and local
economy.
(3) This article is necessary to provide stability to West
Virginia's statewide and regional economies and housing market by
facilitating opportunities for borrowers to pursue loss mitigation
options.
§31-17B-2. Definitions.
For purposes of this article:
"Borrower" means, unless otherwise provided and for purposes
of sections three, four, five, six, eight, nine, eleven, twelve,
thirteen, fourteen, twenty and twenty-one of this article, any
natural person who is a mortgagor or trustor and who is potentially
eligible for any federal, state or proprietary foreclosure
prevention alternative program offered by, or through, his or her
mortgage servicer. "Borrower" does not include: An individual who
has surrendered the secured property as evidenced by either a
letter confirming the surrender or delivery of the keys to the
property to the mortgagee, trustee, beneficiary or authorized
agent; an individual who has contracted with an organization,
person, or entity whose primary business is advising people who
have decided to leave their homes on how to extend the foreclosure
process and avoid their contractual obligations to mortgagees or
beneficiaries; or an individual who has filed a case under Chapter
7, 11, 12, or 13 of Title 11 of the United States Code and the bankruptcy court has not entered an order closing or dismissing the
bankruptcy case, or granting relief from a stay of foreclosure.
"First lien" means the most senior mortgage or deed of trust
on the property that is the subject of the notice of default or
notice of sale.
"Foreclosure prevention alternative" means a first lien loan
modification or another available loss mitigation option.
"Mortgage servicer" means a person or entity who directly
services a loan, or who is responsible for interacting with the
borrower, managing the loan account on a daily basis including
collecting and crediting periodic loan payments, managing any
escrow account or enforcing the note and security instrument,
either as the current owner of the promissory note or as the
current owner's authorized agent. "Mortgage servicer" also means a
subservicing agent to a master servicer by contract. "Mortgage
servicer" does not include a trustee, or a trustee's authorized
agent, acting under a power of sale pursuant to a deed of trust.
§31-17B-3. Purpose.
(a) The purpose of this article is to ensure that, as part of
the nonjudicial foreclosure process, borrowers are considered for,
and have a meaningful opportunity to obtain, available loss
mitigation options, if any, offered by or through the borrower's
mortgage servicer, such as loan modifications or other alternatives
to foreclosure. This article does not require a particular result of that process.
(b) Nothing in this article obviates or supersedes the
obligations of the signatories to the consent judgment entered on
April 4, 2012 in United States of America, et al. v. Bank of
America Corporation, et al., filed in the United States District
Court for the District of Columbia, Case Number 1:12-cv-00361 RMC.
§31-17B-4. Notice of default; recording; contact with borrower;
conditions; due diligence; termination date.
(a) (1) A mortgage servicer, mortgagee, trustee, beneficiary
or authorized agent may not record a notice of default pursuant to
section ten of this article until:
(A) Either thirty days after initial contact is made as
required by subdivision (2) of this subsection or thirty days after
satisfying the due diligence requirements of subsection (e) of this
section; and
(B) The mortgage servicer complies with subdivision (1),
subsection (a), section twenty of this article, if the borrower has
provided a complete application as defined in subsection (d) of
that section.
(2) A mortgage servicer shall contact the borrower in person
or by telephone in order to assess the borrower's financial
situation and explore options for the borrower to avoid
foreclosure. During the initial contact, the mortgage servicer shall advise the borrower that he or she has the right to request
a subsequent meeting and, if requested, the mortgage servicer shall
schedule the meeting to occur within fourteen days. The assessment
of the borrower's financial situation and discussion of options may
occur during the first contact, or at the subsequent meeting
scheduled for that purpose. In either case, the borrower shall be
provided the toll-free telephone number made available by the
Department of Housing and Urban Development to find a Department of
Housing and Urban Development-certified housing counseling agency.
Any meeting may occur telephonically.
(b) A notice of default recorded pursuant to section ten of
this article shall include a declaration that the mortgage servicer
has contacted the borrower, has tried with due diligence to contact
the borrower as required by this section, or that no contact was
required because the individual did not meet the definition of
"borrower" pursuant to section two of this article.
(c) A mortgage servicer's loss mitigation personnel may
participate by telephone during any contact required by this
section.
(d) A borrower may designate, with consent given in writing,
a Housing and Urban Development-certified housing counseling
agency, attorney or other advisor to discuss with the mortgage
servicer, on the borrower's behalf, the borrower's financial
situation and options for the borrower to avoid foreclosure. That contact made at the direction of the borrower satisfies the contact
requirements of subdivision (2), subsection (a) of this section.
Any loan modification or workout plan offered at the meeting by the
mortgage servicer is subject to approval by the borrower.
(e) A notice of default may be recorded pursuant to section
ten of this article when a mortgage servicer has not contacted a
borrower as required by subdivision (2), subsection (a) of this
section: Provided, That the failure to contact the borrower
occurred despite the due diligence of the mortgage servicer. For
purposes of this section, "due diligence" requires and means all of
the following:
(1) A mortgage servicer shall first attempt to contact a
borrower by sending a first-class letter that includes the
toll-free telephone number made available by Housing and Urban
Development to find a Department of Housing and Urban
Development-certified housing counseling agency;
(2) (A) After the letter has been sent, the mortgage servicer
shall attempt to contact the borrower by telephone at least three
times at different hours and on different days. Telephone calls
shall be made to the primary telephone number on file;
(B) A mortgage servicer may attempt to contact a borrower
using an automated system to dial borrowers if, when the telephone
call is answered, the call is connected to a live representative of
the mortgage servicer;
(C) A mortgage servicer satisfies the telephone contact
requirements of this subdivision if it determines, after attempting
contact pursuant to this subdivision, that the borrower's primary
telephone number and secondary telephone number or numbers on file,
if any, have been disconnected;
(3) If the borrower does not respond within two weeks after
the telephone call requirements of subdivision (2) of this
subsection have been satisfied, the mortgage servicer shall then
send a certified letter, with return receipt requested;
(4) The mortgage servicer shall provide a means for the
borrower to contact it in a timely manner, including a toll-free
telephone number that will provide access to a live representative
during business hours; and
(5) The mortgage servicer has posted a prominent link on the
homepage of its Internet Web site, if any, to the following
information:
(A) Options that may be available to borrowers who are unable
to afford their mortgage payments and who wish to avoid
foreclosure, and instructions to borrowers advising them on steps
to take to explore those options;
(B) A list of financial documents borrowers should collect and
be prepared to present to the mortgage servicer when discussing
options for avoiding foreclosure;
(C) A toll-free telephone number for borrowers who wish to discuss options for avoiding foreclosure with their mortgage
servicer; and
(D) The toll-free telephone number made available by
Department of Housing and Urban Development to find a Department of
Housing and Urban Development-certified housing counseling agency.
(f) This section applies only to mortgages or deeds of trust
described in sections sixteen and seventeen of this article.
(g) This section applies only to entities described in
subsection (b), section twenty of this article.
(h) This section remains in effect only until January 1, 2018,
and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2018, deletes or extends that
date.
§31-17B-5. Notice of default; recording; contact with borrower;
conditions; due diligence; applicability; effective
date.
(a) (1) A mortgage servicer, mortgagee, trustee, beneficiary,
or authorized agent may not record a notice of default pursuant to
section ten of this article until:
(A) Either thirty days after initial contact is made as
required by subdivision (2) of this subsection or thirty days after
satisfying the due diligence requirements as described in
subsection (e) of this section; and
(B) The mortgage servicer complies with subsection (a), section thirteen of this article, if the borrower has provided a
complete application as defined in subsection (f), section fourteen
of this article; and
(2) A mortgage servicer shall contact the borrower in person
or by telephone in order to assess the borrower's financial
situation and explore options for the borrower to avoid
foreclosure. During the initial contact, the mortgage servicer
shall advise the borrower that he or she has the right to request
a subsequent meeting and, if requested, the mortgage servicer shall
schedule the meeting to occur within fourteen days. The assessment
of the borrower's financial situation and discussion of options may
occur during the first contact, or at the subsequent meeting
scheduled for that purpose. In either case, the borrower shall be
provided the toll-free telephone number made available by the
Department of Housing and Urban Development to find a Housing and
Urban Development-certified housing counseling agency. Any meeting
may occur telephonically.
(b) A notice of default recorded pursuant to section ten of
this article shall include a declaration that the mortgage servicer
has contacted the borrower, has tried with due diligence to contact
the borrower as required by this section, or that no contact was
required because the individual did not meet the definition of
"borrower" pursuant to section two of this article.
(c) A mortgage servicer's loss mitigation personnel may participate by telephone during any contact required by this
section.
(d) A borrower may designate, with consent given in writing,
a Housing and Urban Development-certified housing counseling
agency, attorney or other advisor to discuss with the mortgage
servicer, on the borrower's behalf, the borrower's financial
situation and options for the borrower to avoid foreclosure. That
contact made at the direction of the borrower shall satisfy the
contact requirements of subdivision (2), subsection (a) of this
section. Any loan modification or workout plan offered at the
meeting by the mortgage servicer is subject to approval by the
borrower.
(e) A notice of default may be recorded pursuant to section
ten of this article when a mortgage servicer has not contacted a
borrower as required by subdivision (2), subsection (a) of this
section: Provided, That the failure to contact the borrower
occurred despite the due diligence of the mortgage servicer. For
purposes of this section, "due diligence" requires and means all of
the following:
(1) A mortgage servicer shall first attempt to contact a
borrower by sending a first-class letter that includes the
toll-free telephone number made available by Housing and Urban
Development to find a Housing and Urban Development-certified
housing counseling agency;
(2) (A) After the letter has been sent, the mortgage servicer
shall attempt to contact the borrower by telephone at least three
times at different hours and on different days. Telephone calls
shall be made to the primary telephone number on file;
(B) A mortgage servicer may attempt to contact a borrower
using an automated system to dial borrowers if, when the telephone
call is answered, the call is connected to a live representative of
the mortgage servicer; and
(C) A mortgage servicer satisfies the telephone contact
requirements of this subdivision if it determines, after attempting
contact pursuant to this subdivision, that the borrower's primary
telephone number and secondary telephone number or numbers on file,
if any, have been disconnected;
(3) If the borrower does not respond within two weeks after
the telephone call requirements of subdivision (2) of this
subsection have been satisfied, the mortgage servicer shall then
send a certified letter, with return receipt requested;
(4) The mortgage servicer shall provide a means for the
borrower to contact it in a timely manner, including a toll-free
telephone number that will provide access to a live representative
during business hours; and
(5) The mortgage servicer has posted a prominent link on the
homepage of its Internet Web site, if any, to the following
information:
(A) Options that may be available to borrowers who are unable
to afford their mortgage payments and who wish to avoid
foreclosure, and instructions to borrowers advising them on steps
to take to explore those options;
(B) A list of financial documents borrowers should collect and
be prepared to present to the mortgage servicer when discussing
options for avoiding foreclosure;
(C) A toll-free telephone number for borrowers who wish to
discuss options for avoiding foreclosure with their mortgage
servicer; and
(D) The toll-free telephone number made available by Housing
and Urban Development to find a Housing and Urban
Development-certified housing counseling agency.
(f) This section applies only to mortgages or deeds of trust
described in sections seventeen and eighteen of this article.
(g) This section becomes operative on January 1, 2018.
§31-17B-6. Notice of default; recording; conditions; contact with
borrower; due diligence; applicability; termination
date.
(a) A mortgage servicer, mortgagee, trustee, beneficiary, or
authorized agent may not record a notice of default pursuant to
section ten of this article until all of the following have been
completed:
(1) The mortgage servicer has satisfied the requirements of subdivision (1), subsection (b) of this section;
(2) Either thirty days after initial contact is made as
required by subdivision (2), subsection (b) of this section or
thirty days after satisfying the due diligence requirements as
described in subsection (f) of this section;
(3) The mortgage servicer complies with subsection (c) of this
section and subsection (c), section seven of this article, if the
borrower has provided a complete application.
(b) (1) A mortgage servicer shall send the following
information in writing to the borrower:
(A) A statement that if the borrower is a service member or a
dependent of a service member, he or she may be entitled to certain
protections under the federal Service Members Civil Relief Act, 50
U.S.C. §501 et seq., regarding the service member's interest rate
and the risk of foreclosure, and counseling for covered Service
members that is available at agencies such as Military One Source
and Armed Forces Legal Assistance; and
(B) A statement that the borrower may request the following:
(i) A copy of the borrower's promissory note or other evidence
of indebtedness;
(ii) A copy of the borrower's deed of trust or mortgage;
(iii) A copy of any assignment, if applicable, of the
borrower's mortgage or deed of trust required to demonstrate the
right of the mortgage servicer to foreclose; and
(iv) A copy of the borrower's payment history since the
borrower was last less than sixty days past due; and
(2) A mortgage servicer shall contact the borrower in person
or by telephone in order to assess the borrower's financial
situation and explore options for the borrower to avoid
foreclosure. During the initial contact, the mortgage servicer
shall advise the borrower that he or she has the right to request
a subsequent meeting and, if requested, the mortgage servicer shall
schedule the meeting to occur within fourteen days. The assessment
of the borrower's financial situation and discussion of options may
occur during the first contact, or at the subsequent meeting
scheduled for that purpose. In either case, the borrower shall be
provided the toll-free telephone number made available by the
Housing and Urban Development to find a Housing and Urban
Development-certified housing counseling agency. Any meeting may
occur telephonically.
(c) A notice of default recorded pursuant to section ten of
this article shall include a declaration that the mortgage servicer
has contacted the borrower, has tried with due diligence to contact
the borrower as required by this section, or that no contact was
required because the individual did not meet the definition of
"borrower" pursuant to section two of this article.
(d) A mortgage servicer's loss mitigation personnel may
participate by telephone during any contact required by this section.
(e) A borrower may designate, with consent given in writing,
a Housing and Urban Development-certified housing counseling
agency, attorney, or other advisor to discuss with the mortgage
servicer, on the borrower's behalf, the borrower's financial
situation and options for the borrower to avoid foreclosure. That
contact made at the direction of the borrower shall satisfy the
contact requirements of subdivision (2), subsection (b) of this
section. Any foreclosure prevention alternative offered at the
meeting by the mortgage servicer is subject to approval by the
borrower.
(f) A notice of default may be recorded pursuant to section
ten when a mortgage servicer has not contacted a borrower as
required by this article, provided that the failure to contact the
borrower occurred despite the due diligence of the mortgage
servicer. For purposes of this section, "due diligence" requires
and means all of the following:
(1) A mortgage servicer shall first attempt to contact a
borrower by sending a first-class letter that includes the
toll-free telephone number made available by Department of Housing
and Urban Development to find a Department of Housing and Urban
Development-certified housing counseling agency;
(2) (A) After the letter has been sent, the mortgage servicer
shall attempt to contact the borrower by telephone at least three times at different hours and on different days. Telephone calls
shall be made to the primary telephone number on file.
(B) A mortgage servicer may attempt to contact a borrower
using an automated system to dial borrowers if, when the telephone
call is answered, the call is connected to a live representative of
the mortgage servicer.
(C) A mortgage servicer satisfies the telephone contact
requirements of this subdivision if it determines, after attempting
contact pursuant to this subdivision, that the borrower's primary
telephone number and secondary telephone number or numbers on file,
if any, have been disconnected;
(3) If the borrower does not respond within two weeks after
the telephone call requirements of subdivision (2) of this
subsection have been satisfied, the mortgage servicer shall then
send a certified letter, with return receipt requested, that
includes the toll-free telephone number made available by Housing
and Urban Development to find a Housing and Urban
Development-certified housing counseling agency;
(4) The mortgage servicer shall provide a means for the
borrower to contact it in a timely manner, including a toll-free
telephone number that will provide access to a live representative
during business hours; and
(5) The mortgage servicer has posted a prominent link on the
homepage of its Internet Web site, if any, to the following information:
(A) Options that may be available to borrowers who are unable
to afford their mortgage payments and who wish to avoid
foreclosure, and instructions to borrowers advising them on steps
to take to explore those options;
(B) A list of financial documents borrowers should collect and
be prepared to present to the mortgage servicer when discussing
options for avoiding foreclosure;
(C) A toll-free telephone number for borrowers who wish to
discuss options for avoiding foreclosure with their mortgage
servicer; and
(D) The toll-free telephone number made available by Housing
and Urban Development to find a Housing and Urban
Development-certified housing counseling agency.
(g) This section does not apply to entities described in
subsection (b), section twenty of this article.
(h) This section applies only to mortgages or deeds of trust
described in seventeen and eighteen of this article.
(i) This section remains in effect only until January 1, 2018,
and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2018, deletes or extends that
date.
§31-17B-7. Legislative declaration; loan modification; notice;
applicability; exceptions; requirements; termination date.
(a) The Legislature finds:
(1) That any duty that mortgage servicers may have to maximize
net present value under their pooling and servicing agreements is
owed to all parties in a loan pool, or to all investors under a
pooling and servicing agreement, not to any particular party in the
loan pool or investor under a pooling and servicing agreement; and
(2) That a mortgage servicer acts in the best interests of all
parties to the loan pool or investors in the pooling and servicing
agreement if it agrees to or implements a loan modification or
workout plan for which both of the following apply:
(A) The loan is in payment default, or payment default is
reasonably foreseeable; and
(B) Anticipated recovery under the loan modification or
workout plan exceeds the anticipated recovery through foreclosure
on a net present value basis.
(b) It is the intent of the Legislature that the mortgage
servicer offer the borrower a loan modification or workout plan if
the modification or plan is consistent with its contractual or
other authority.
(c) If a borrower submits a complete application for a first
lien loan modification offered by, or through, the borrower's
mortgage servicer, a mortgage servicer, mortgagee, trustee,
beneficiary, or authorized agent may not record a notice of default
or notice of sale, or conduct a trustee's sale, while the complete first lien loan modification application is pending. A mortgage
servicer, mortgagee, trustee, beneficiary, or authorized agent may
not record a notice of default or notice of sale or conduct a
trustee's sale until any of the following occurs:
(1) The mortgage servicer makes a written determination that
the borrower is not eligible for a first lien loan modification,
and any appeal period pursuant to subsection (d) of this section
has expired;
(2) The borrower does not accept an offered first lien loan
modification within fourteen days of the offer; or
(3) The borrower accepts a written first lien loan
modification, but defaults on, or otherwise breaches the borrower's
obligations under, the first lien loan modification.
(d) If the borrower's application for a first lien loan
modification is denied, the borrower has at least thirty days from
the date of the written denial to appeal the denial and to provide
evidence that the mortgage servicer's determination was in error.
(e) If the borrower's application for a first lien loan
modification is denied, the mortgage servicer, mortgagee, trustee,
beneficiary, or authorized agent may not record a notice of default
or, if a notice of default has already been recorded, record a
notice of sale or conduct a trustee's sale until the later of:
(1) Thirty-one days after the borrower is notified in writing
of the denial; or
(2) If the borrower appeals the denial pursuant to subsection
(d) of this section, the later of fifteen days after the denial of
the appeal or fourteen days after a first lien loan modification is
offered after appeal but declined by the borrower, or, if a first
lien loan modification is offered and accepted after appeal, the
date on which the borrower fails to timely submit the first payment
or otherwise breaches the terms of the offer.
(f) Following the denial of a first lien loan modification
application, the mortgage servicer shall send a written notice to
the borrower identifying the reasons for denial, including the
following:
(1) The amount of time from the date of the denial letter in
which the borrower may request an appeal of the denial of the first
lien loan modification and instructions regarding how to appeal the
denial;
(2) If the denial was based on investor disallowance, the
specific reasons for the investor disallowance;
(3) If the denial is the result of a net present value
calculation, the monthly gross income and property value used to
calculate the net present value and a statement that the borrower
may obtain all of the inputs used in the net present value
calculation upon written request to the mortgage servicer;
(4) If applicable, a finding that the borrower was previously
offered a first lien loan modification and failed to successfully make payments under the terms of the modified loan; and
(5) If applicable, a description of other foreclosure
prevention alternatives for which the borrower may be eligible, and
a list of the steps the borrower shall take in order to be
considered for those options. If the mortgage servicer has already
approved the borrower for another foreclosure prevention
alternative, information necessary to complete the foreclosure
prevention alternative.
(g) In order to minimize the risk of borrowers submitting
multiple applications for first lien loan modifications for the
purpose of delay, the mortgage servicer is not obligated to
evaluate applications from borrowers who have already been
evaluated or afforded a fair opportunity to be evaluated for a
first lien loan modification prior to January 1, 2013, or who have
been evaluated or afforded a fair opportunity to be evaluated
consistent with the requirements of this section, unless there has
been a material change in the borrower's financial circumstances
since the date of the borrower's previous application and that
change is documented by the borrower and submitted to the mortgage
servicer.
(h) For purposes of this section, an application is complete
when a borrower has supplied the mortgage servicer with all
documents required by the mortgage servicer within the reasonable
time frames specified by the mortgage servicer.
(i) Subsections (c) through (h) of this section, inclusive, do
not apply to entities described in subsection (b), section twenty
of this article.
(j) This section applies only to mortgages or deeds of trust
described in sections seventeen and eighteen of this article.
(k) This section remains in effect only until January 1, 2018,
and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2018, deletes or extends that
date.
§31-17B-8. Legislative declaration; intent; applicability; loan
modification; effective date.
(a) The Legislature finds:
(1) That any duty mortgage servicers may have to maximize net
present value under their pooling and servicing agreements is owed
to all parties in a loan pool, or to all investors under a pooling
and servicing agreement, not to any particular party in the loan
pool or investor under a pooling and servicing agreement; and
(2) That a mortgage servicer acts in the best interests of all
parties to the loan pool or investors in the pooling and servicing
agreement if it agrees to or implements a loan modification or
workout plan for which both of the following apply:
(A) The loan is in payment default, or payment default is
reasonably foreseeable; and
(B) Anticipated recovery under the loan modification or workout plan exceeds the anticipated recovery through foreclosure
on a net present value basis.
(b) It is the intent of the Legislature that the mortgage
servicer offer the borrower a loan modification or workout plan if
the modification or plan is consistent with its contractual or
other authority.
(c) This section becomes operative on January 1, 2018.
§31-17B-9. Foreclosure prevention; single point of contact;
requirements; limitation of liability
applicability; defaults; exceptions.
(a) Upon request from a borrower who requests a foreclosure
prevention alternative, the mortgage servicer shall promptly
establish a single point of contact and provide to the borrower one
or more direct means of communication with the single point of
contact.
(b) The single point of contact is responsible for doing all
of the following:
(1) Communicating the process by which a borrower may apply
for an available foreclosure prevention alternative and the
deadline for any required submissions to be considered for these
options;
(2) Coordinating receipt of all documents associated with
available foreclosure prevention alternatives and notifying the
borrower of any missing documents necessary to complete the application;
(3) Having access to current information and personnel
sufficient to timely, accurately, and adequately inform the
borrower of the current status of the foreclosure prevention
alternative;
(4) Ensuring that a borrower is considered for all foreclosure
prevention alternatives offered by, or through, the mortgage
servicer, if any; and
(5) Having access to individuals with the ability and
authority to stop foreclosure proceedings when necessary.
(c) The single point of contact remains assigned to the
borrower's account until the mortgage servicer determines that all
loss mitigation options offered by, or through, the mortgage
servicer have been exhausted or the borrower's account becomes
current.
(d) The mortgage servicer shall ensure that a single point of
contact refers and transfers a borrower to an appropriate
supervisor upon request of the borrower, if the single point of
contact has a supervisor.
(e) For purposes of this section, "single point of contact"
means an individual or team of personnel each of whom has the
ability and authority to perform the responsibilities described in
subsections (b) through (d) of this section, inclusive. The
mortgage servicer shall ensure that each member of the team is knowledgeable about the borrower's situation and current status in
the alternatives to foreclosure process.
(f) This section applies only to mortgages or deeds of trust
described in sections seventeen and eighteen of this article.
(g) (1) This section does not apply to a depository
institution chartered under state or federal law that foreclosed on
one hundred seventy-five or fewer residential real properties,
containing no more than four dwelling units, that are located in
West Virginia.
(2) Within three months after the close of any calendar year
or annual reporting period as established with its primary
regulator during which an entity or person described in subdivision
(1) of this subsection exceeds the threshold of one hundred
seventy-five specified in that subdivision, that entity shall
notify its primary regulator, in a manner acceptable to its primary
regulator, and any mortgagor or trustor who is delinquent on a
residential mortgage loan serviced by that entity of the date on
which that entity will be subject to this section, which date is
the first day of the first month that is six months after the close
of the calendar year or annual reporting period during which that
entity exceeded the threshold.
§31-17B-10. Property interest transfer; recording; requirements;
termination date; privileged communication.
(a) Every transfer of an interest in property, other than in trust, made only as a security for the performance of another act,
is a mortgage, except when in the case of personal property it is
accompanied by actual change of possession, in which case it is a
pledge. Where, by a mortgage created after July 27, 1917, of any
estate in real property, other than an estate at will or for years,
less than two, or in any transfer in trust made after July 27,
1917, of a like estate to secure the performance of an obligation,
a power of sale is conferred upon the mortgagee, trustee, or any
other person, to be exercised after a breach of the obligation for
which that mortgage or transfer is a security, the power may not be
exercised except where the mortgage or transfer is made pursuant to
an order, judgment, or decree of a court of record, or to secure
the payment of bonds or other evidences of indebtedness authorized
or permitted, until all of the following apply:
(1) The trustee, mortgagee, or beneficiary, or any of their
authorized agents first files for record, in the office of the
county clerk of each county where the mortgaged or trust property
or some part or parcel thereof is situated, a notice of default.
That notice of default shall include all of the following:
(A) A statement identifying the mortgage or deed of trust by
stating the name or names of the trustor or trustors and giving the
book and page, or instrument number, if applicable, where the
mortgage or deed of trust is recorded or a description of the
mortgaged or trust property;
(B) A statement that a breach of the obligation for which the
mortgage or transfer in trust in security has occurred; and
(C) A statement setting forth the nature of each breach
actually known to the beneficiary and of his or her election to
sell or cause to be sold the property to satisfy that obligation
and any other obligation secured by the deed of trust or mortgage
that is in default;
(2) Not less than three months must elapse from the filing of
the notice of default;
(3) After the lapse of the three months described in
subdivision (2) of this subsection, the mortgagee, trustee, or
other person authorized to take the sale shall give notice of sale,
stating the time and place of the sale;
(4) Notwithstanding subdivision (3) of this subsection, the
mortgagee, trustee, or other person authorized to take sale may
record a notice of sale up to five days before the lapse of the
three-month period described in subdivision (2) of this subsection:
Provided, That the date of sale is no earlier than three months and
twenty days after the recording of the notice of default;
(5) Until January 1, 2018, whenever a sale is postponed for a
period of at least ten business days a mortgagee, beneficiary, or
authorized agent shall provide written notice to a borrower
regarding the new sale date and time, within five business days
following the postponement. Failure to comply with this subdivision does not invalidate any sale that would otherwise be valid. This
subdivision becomes inoperative on January 1, 2018; and
(6) No entity may record or cause a notice of default to be
recorded or otherwise initiate the foreclosure process unless it is
the holder of the beneficial interest under the mortgage or deed of
trust, the original trustee or the substituted trustee under the
deed of trust, or the designated agent of the holder of the
beneficial interest. No agent of the holder of the beneficial
interest under the mortgage or deed of trust, original trustee or
substituted trustee under the deed of trust may record a notice of
default or otherwise commence the foreclosure process except when
acting within the scope of authority designated by the holder of
the beneficial interest.
(b) In performing acts required by this article, the trustee
does not incur any liability for any good faith error resulting
from reliance on information provided in good faith by the
beneficiary regarding the nature and the amount of the default
under the secured obligation, deed of trust, or mortgage.
(c) A recital in the deed executed pursuant to the power of
sale of compliance with all requirements of law regarding the
mailing of copies of notices or the publication of a copy of the
notice of default or the personal delivery of the copy of the
notice of default or the posting of copies of the notice of sale or
the publication of a copy is prima facie evidence of compliance with these requirements and conclusive evidence thereof in favor of
bona fide purchasers and encumbrancers for value and without
notice.
(d) All of the following are privileged communications:
(1) The mailing, publication, and delivery of notices as
required by this section; and
(2) Performance of the procedures set forth in this article.
(e) There is a rebuttable presumption that the beneficiary
actually knew of all unpaid loan payments on the obligation owed to
the beneficiary and secured by the deed of trust or mortgage
subject to the notice of default. However, the failure to include
an actually known default does not invalidate the notice of sale
and the beneficiary is not precluded from asserting a claim to this
omitted default or defaults in a separate notice of default.
§31-17B-11. Foreclosure prevention alternative; applicability;
termination date.
(a) Unless a borrower has previously exhausted the first lien
loan modification process offered by, or through, his or her
mortgage servicer described in section seven or eight of this
article, a mortgage servicer that offers one or more foreclosure
prevention alternatives shall, within five business days after
recording a notice of default pursuant to section ten of this
article, send a written communication to the borrower that includes
all of the following information:
(1) That the borrower may be evaluated for a foreclosure
prevention alternative or, if applicable, foreclosure prevention
alternatives;
(2) Whether an application is required to be submitted by the
borrower in order to be considered for a foreclosure prevention
alternative; and
(3) The means and process by which a borrower may obtain an
application for a foreclosure prevention alternative.
(b) This section does not apply to entities described in
subsection (b), section twenty of this article.
(c) This section applies only to mortgages or deeds of trust
described in sections seventeen and eighteen of this article.
(d) This section remains in effect only until January 1,
2018, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2018, deletes or extends
that date.
§31-17B-12. First lien modification; requirements; applicability;
termination date.
(a) When a borrower submits a complete first lien modification
application or any document in connection with a first lien
modification application, the mortgage servicer shall provide
written acknowledgment of the receipt of the documentation within
five business days of receipt. In its initial acknowledgment of
receipt of the loan modification application, the mortgage servicer shall include the following information:
(1) A description of the loan modification process, including
an estimate of when a decision on the loan modification will be
made after a complete application has been submitted by the
borrower and the length of time the borrower will have to consider
an offer of a loan modification or other foreclosure prevention
alternative;
(2) Any deadlines, including deadlines to submit missing
documentation, that would affect the processing of a first lien
loan modification application;
(3) Any expiration dates for submitted documents; and
(4) Any deficiency in the borrower's first lien loan
modification application.
(b) For purposes of this section, a borrower's first lien loan
modification application is complete when a borrower has supplied
the mortgage servicer with all documents required by the mortgage
servicer within the reasonable time frames specified by the
mortgage servicer.
(c) This section does not apply to entities described in
subsection (b), section twenty of this article.
(d) This section applies only to mortgages or deeds of trust
described in seventeen and eighteen of this article.
(e) This section remains in effect only until January 1,
2018, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2018, deletes or extends
that date.
§31-17B-13. Notice of default; requirements; foreclosure
prevention; applicability; termination date.
(a) If a foreclosure prevention alternative is approved in
writing prior to the recordation of a notice of default, a mortgage
servicer, mortgagee, trustee, beneficiary, or authorized agent may
not record a notice of default under either of the following
circumstances:
(1) The borrower is in compliance with the terms of a written
trial or permanent loan modification, forbearance or repayment
plan; or
(2) A foreclosure prevention alternative has been approved in
writing by all parties, including, for example, the first lien
investor, junior lienholder and mortgage insurer, as applicable,
and proof of funds or financing has been provided to the servicer.
(b) If a foreclosure prevention alternative is approved in
writing after the recordation of a notice of default, a mortgage
servicer, mortgagee, trustee, beneficiary or authorized agent may
not record a notice of sale or conduct a trustee's sale under
either of the following circumstances:
(1) The borrower is in compliance with the terms of a written
trial or permanent loan modification, forbearance or repayment
plan; or
(2) A foreclosure prevention alternative has been approved in
writing by all parties, including, for example, the first lien
investor, junior lienholder and mortgage insurer, as applicable,
and proof of funds or financing has been provided to the servicer.
(c) When a borrower accepts an offered first lien loan
modification or other foreclosure prevention alternative, the
mortgage servicer shall provide the borrower with a copy of the
fully executed loan modification agreement or agreement evidencing
the foreclosure prevention alternative following receipt of the
executed copy from the borrower.
(d) A mortgagee, beneficiary, or authorized agent shall record
a rescission of a notice of default or cancel a pending trustee's
sale, if applicable, upon the borrower executing a permanent
foreclosure prevention alternative. In the case of a short sale,
the rescission or cancellation of the pending trustee's sale shall
occur when the short sale has been approved by all parties and
proof of funds or financing has been provided to the mortgagee,
beneficiary, or authorized agent.
(e) The mortgage servicer may not charge any application,
processing, or other fee for a first lien loan modification or
other foreclosure prevention alternative.
(f) The mortgage servicer may not collect any late fees for
periods during which a complete first lien loan modification
application is under consideration or a denial is being appealed, the borrower is making timely modification payments, or a
foreclosure prevention alternative is being evaluated or exercised.
(g) If a borrower has been approved in writing for a first
lien loan modification or other foreclosure prevention alternative,
and the servicing of that borrower's loan is transferred or sold to
another mortgage servicer, the subsequent mortgage servicer shall
continue to honor any previously approved first lien loan
modification or other foreclosure prevention alternative, in
accordance with the provisions of this article.
(h) This section applies only to mortgages or deeds of trust
described in sections seventeen and eighteen of this article.
(i) This section does not apply to entities described in
subsection (b), section twenty of this article.
(j) This section remains in effect only until January 1, 2018,
and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2018, deletes or extends that
date.
§31-17B-14. Foreclosure prevention alternative; requirements;
effective date.
(a) If a borrower submits a complete application for a
foreclosure prevention alternative offered by, or through, the
borrower's mortgage servicer, a mortgage servicer, trustee,
mortgagee, beneficiary or authorized agent may not record a notice
of sale or conduct a trustee's sale while the complete foreclosure prevention alternative application is pending, and until the
borrower has been provided with a written determination by the
mortgage servicer regarding that borrower's eligibility for the
requested foreclosure prevention alternative.
(b) Following the denial of a first lien loan modification
application, the mortgage servicer shall send a written notice to
the borrower identifying with specificity the reasons for the
denial and shall include a statement that the borrower may obtain
additional documentation supporting the denial decision upon
written request to the mortgage servicer.
(c) If a foreclosure prevention alternative is approved in
writing prior to the recordation of a notice of default, a mortgage
servicer, mortgagee, trustee, beneficiary or authorized agent may
not record a notice of default under either of the following
circumstances:
(1) The borrower is in compliance with the terms of a written
trial or permanent loan modification, forbearance, or repayment
plan; or
(2) A foreclosure prevention alternative has been approved in
writing by all parties, including, for example, the first lien
investor, junior lienholder and mortgage insurer, as applicable,
and proof of funds or financing has been provided to the servicer.
(d) If a foreclosure prevention alternative is approved in
writing after the recordation of a notice of default, a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent may
not record a notice of sale or conduct a trustee's sale under
either of the following circumstances:
(1) The borrower is in compliance with the terms of a written
trial or permanent loan modification, forbearance, or repayment
plan; or
(2) A foreclosure prevention alternative has been approved in
writing by all parties, including, for example, the first lien
investor, junior lienholder and mortgage insurer, as applicable,
and proof of funds or financing has been provided to the servicer.
(e) This section applies only to mortgages or deeds of trust
as described in sections seventeen and eighteen of this article
(f) For purposes of this section, an application is complete
when a borrower has supplied the mortgage servicer with all
documents required by the mortgage servicer within the reasonable
time frames specified by the mortgage servicer.
(g) This section becomes operative on January 1, 2018.
§31-17B-15. Trustee's deed; recording; injunctions; violations;
exceptions; damages; attorney's fees; termination
date.
(a) (1) If a trustee's deed upon sale has not been recorded,
a borrower may bring an action for injunctive relief to enjoin a
material violation of section six, seven, eight, nine, eleven,
twelve, thirteen, fourteen or nineteen of this article.
(2) Any injunction remains in place and any trustee's sale
shall be enjoined until the court determines that the mortgage
servicer, mortgagee, trustee, beneficiary or authorized agent has
corrected and remedied the violation or violations giving rise to
the action for injunctive relief. An enjoined entity may move to
dissolve an injunction based on a showing that the material
violation has been corrected and remedied.
(b) After a trustee's deed upon sale has been recorded, a
mortgage servicer, mortgagee, trustee, beneficiary or authorized
agent is liable to a borrower for actual economic damages,
resulting from a material violation of section six, seven, eight,
nine, eleven, twelve, thirteen, fourteen or nineteen of this
article by that mortgage servicer, mortgagee, trustee, beneficiary
or authorized agent where the violation was not corrected and
remedied prior to the recordation of the trustee's deed upon sale.
If the court finds that the material violation was intentional or
reckless, or resulted from willful misconduct by a mortgage
servicer, mortgagee, trustee, beneficiary or authorized agent, the
court may award the borrower the greater of treble actual damages
or statutory damages of $50,000.
(c) A mortgage servicer, mortgagee, trustee, beneficiary or
authorized agent is not liable for any violation that it has
corrected and remedied prior to the recordation of a trustee's deed
upon sale, or that has been corrected and remedied by third parties working on its behalf prior to the recordation of a trustee's deed
upon sale.
(d) A violation of section six, seven, eight, nine, eleven,
twelve, thirteen, fourteen or nineteen of this article by a person
licensed by the Commissioner of Banking, the West Virginia Real
Estate Commission or subject to the jurisdiction of the West
Virginia Business Corporation Act is a violation of that person's
licensing requirements or other statutory requirements.
(e) A violation of this article does not affect the validity
of a sale in favor of a bona fide purchaser and any of its
encumbrancers for value without notice.
(f) A third-party encumbrancer is not relieved of liability
resulting from violations of section six, seven, eight, nine,
eleven, twelve, thirteen, fourteen or nineteen of this article
committed by that third-party encumbrancer, that occurred prior to
the sale of the subject property to the bona fide purchaser.
(g) A signatory to a consent judgment entered on April 4, 2012
in United States of America, et al. v. Bank of America Corporation,
et al., filed in the United States District Court for the District
of Columbia, Case Number 1:12-cv-00361 RMC., that is in compliance
with the relevant terms of the Settlement Term Sheet of that
consent judgment with respect to the borrower who brought an action
pursuant to this section while the consent judgment is in effect
has no liability for a violation of section six, seven, eight, nine, eleven, twelve, thirteen, fourteen or nineteen of this
article.
(h) The rights, remedies, and procedures provided by this
section are in addition to and independent of any other rights,
remedies or procedures under any other law. Nothing in this section
alters, limits or negates any other rights, remedies or procedures
provided by law.
(i) A court may award a prevailing borrower reasonable
attorney's fees and costs in an action brought pursuant to this
section. A borrower has prevailed for purposes of this subsection
if the borrower obtained injunctive relief or was awarded damages
pursuant to this section.
(j) This section does not apply to entities described in
subsection (b), section twenty of this article.
(k) This section remains in effect only until January 1, 2018,
and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2018, deletes or extends that
date.
§31-17B-16. Trustee's deed; recording; injunctive relief;
liability; violations; exception; damages;
attorney's fees; effective date.
(a) (1) If a trustee's deed upon sale has not been recorded,
a borrower may bring an action for injunctive relief to enjoin a
material violation of section four, five, nine, thirteen, fourteen or nineteen of this article.
(2) Any injunction remains in place and any trustee's sale
shall be enjoined until the court determines that the mortgage
servicer, mortgagee, trustee, beneficiary or authorized agent has
corrected and remedied the violation or violations giving rise to
the action for injunctive relief. An enjoined entity may move to
dissolve an injunction based on a showing that the material
violation has been corrected and remedied.
(b) After a trustee's deed upon sale has been recorded, a
mortgage servicer, mortgagee, trustee, beneficiary or authorized
agent is liable to a borrower for actual economic damages resulting
from a material violation of section four, five, nine, thirteen,
fourteen or nineteen of this article by that mortgage servicer,
mortgagee, trustee, beneficiary or authorized agent where the
violation was not corrected and remedied prior to the recordation
of the trustee's deed upon sale. If the court finds that the
material violation was intentional or reckless, or resulted from
willful misconduct by a mortgage servicer, mortgagee, trustee,
beneficiary or authorized agent, the court may award the borrower
the greater of treble actual damages or statutory damages of
$50,000.
(c) A mortgage servicer, mortgagee, trustee, beneficiary or
authorized agent is not liable for any violation that it has
corrected and remedied prior to the recordation of the trustee's deed upon sale, or that has been corrected and remedied by third
parties working on its behalf prior to the recordation of the
trustee's deed upon sale.
(d) A violation of section four, five, nine, thirteen,
fourteen or nineteen of this article by a person licensed by the
Commissioner of Banking, the West Virginia Real Estate Commission
or subject to the jurisdiction of the West Virginia Business
Corporation Act is a violation of that person's licensing
requirements or other statutory requirements.
(e) A violation of this article does not affect the validity
of a sale in favor of a bona fide purchaser and any of its
encumbrancers for value without notice.
(f) A third-party encumbrancer is not relieved of liability
resulting from violations of section four, five, nine, thirteen,
fourteen or nineteen of this article committed by that third-party
encumbrancer, that occurred prior to the sale of the subject
property to the bona fide purchaser.
(g) The rights, remedies, and procedures provided by this
section are in addition to and independent of any other rights,
remedies, or procedures under any other law. Nothing in this
section alters, limits or negates any other rights, remedies or
procedures provided by law.
(h) A court may award a prevailing borrower reasonable
attorney's fees and costs in an action brought pursuant to this section. A borrower has prevailed for purposes of this subsection
if the borrower obtained injunctive relief or was awarded damages
pursuant to this section.
(i) This section becomes operative on January 1, 2018.
§31-17B-17. First lien mortgages and deeds of trust; termination
date.
(a) Unless otherwise provided, subdivision (5), subsection (a)
section ten and sections four, five, six, seven, eight, nine,
eleven, twelve, thirteen, fourteen and twenty of this article apply
only to first lien mortgages or deeds of trust that are secured by
owner-occupied residential real property containing no more than
four dwelling units. For these purposes, "owner-occupied" means
that the property is the principal residence of the borrower and is
security for a loan made for personal, family or household
purposes.
(b) This section remains in effect only until January 1, 2018,
and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2018, deletes or extends that
date.
§31-17B-18. Owner-occupied residential real property; effective
date.
(a) Unless otherwise provided, sections four, five, nine
thirteen and fourteen apply only to first lien mortgages or deeds of trust that are secured by owner-occupied residential real
property containing no more than four dwelling units. For these
purposes, "owner-occupied" means that the property is the principal
residence of the borrower and is security for a loan made for
personal, family or household purposes.
(b) This section becomes operative on January 1, 2018.
§31-17B-19. Notice of default; notice of sale; assignment of a
deed of trust; civil penalty; termination date.
(a) A declaration recorded pursuant to section four or five of
this article or, until January 1, 2018, pursuant to section six of
this article, a notice of default, notice of sale, assignment of a
deed of trust or substitution of trustee recorded by or on behalf
of a mortgage servicer in connection with a foreclosure subject to
section ten of this article, or a declaration or affidavit filed in
any court relative to a foreclosure proceeding shall be accurate
and complete and supported by competent and reliable evidence.
(b) Before recording or filing any of the documents described
in subsection (a) of this section, a mortgage servicer shall ensure
that it has reviewed competent and reliable evidence to
substantiate the borrower's default and the right to foreclose,
including the borrower's loan status and loan information.
(c) Until January 1, 2018, any mortgage servicer that engages
in multiple and repeated uncorrected violations of subsection (b)
of this section in recording documents or filing documents in any court relative to a foreclosure proceeding is liable for a civil
penalty of up to $7,500 per mortgage or deed of trust in an action
brought by a government entity or in an administrative proceeding
brought against a respective licensee, in addition to any other
remedies available to these entities. This subsection becomes
inoperative on January 1, 2018.
§31-17B-20. First lien loan modification; foreclosure prevention
alternative; applicability; exceptions;
requirements; termination date.
(a) (1) If a borrower submits a complete application for a
first lien loan modification offered by, or through, the borrower's
mortgage servicer, a mortgage servicer, trustee, mortgagee,
beneficiary or authorized agent may not record a notice of default,
notice of sale or conduct a trustee's sale while the complete first
lien loan modification application is pending, and until the
borrower has been provided with a written determination by the
mortgage servicer regarding that borrower's eligibility for the
requested loan modification.
(2) If a foreclosure prevention alternative has been approved
in writing prior to the recordation of a notice of default, a
mortgage servicer, mortgagee, trustee, beneficiary or authorized
agent may not record a notice of default under either of the
following circumstances:
(A) The borrower is in compliance with the terms of a written trial or permanent loan modification, forbearance or repayment
plan; or
(B) A foreclosure prevention alternative has been approved in
writing by all parties, including, for example, the first lien
investor, junior lienholder and mortgage insurer, as applicable,
and proof of funds or financing has been provided to the servicers.
(3) If a foreclosure prevention alternative is approved in
writing after the recordation of a notice of default, a mortgage
servicer, mortgagee, trustee, beneficiary or authorized agent may
not record a notice of sale or conduct a trustee's sale under
either of the following circumstances:
(A) The borrower is in compliance with the terms of a written
trial or permanent loan modification, forbearance or repayment
plan; or
(B) A foreclosure prevention alternative has been approved in
writing by all parties, including, for example, the first lien
investor, junior lienholder and mortgage insurer, as applicable,
and proof of funds or financing has been provided to the servicers.
(b) This section applies only to a depository institution
chartered under state or federal law, that, during its immediately
preceding annual reporting period, as established with its primary
regulator, foreclosed on one hundred seventy-five or fewer
residential real properties, containing no more than four dwelling
units, that are located in West Virginia.
(c) Within three months after the close of any calendar year
or annual reporting period as established with its primary
regulator during which an entity or person described in subsection
(b) exceeds the threshold of one hundred seventy-five specified in
subsection (b) of this section, that entity shall notify its
primary regulator, in a manner acceptable to its primary regulator,
and any mortgagor or trustor who is delinquent on a residential
mortgage loan serviced by that entity of the date on which that
entity will be subject to sections six, seven, eight, nine, eleven,
twelve, thirteen, fourteen, fifteen and sixteen, which date is the
first day of the first month that is six months after the close of
the calendar year or annual reporting period during which that
entity exceeded the threshold.
(d) For purposes of this section, an application is complete
when a borrower has supplied the mortgage servicers with all
documents required by the mortgage servicers within the reasonable
time frames specified by the mortgage servicers.
(e) If a borrower has been approved in writing for a first
lien loan modification or other foreclosure prevention alternative,
and the servicing of the borrower's loan is transferred or sold to
another mortgage servicer, the subsequent mortgage servicer shall
continue to honor any previously approved first lien loan
modification or other foreclosure prevention alternative, in
accordance with this article.
(f) This section applies only to mortgages or deeds of trust
described in sections seventeen and eighteen of this article.
(g) This section remains in effect only until January 1, 2018,
and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2018, deletes or extends that
date.
§31-17B-21. Trustee's deed; recording; violations; injunctive
relief; damages; attorney's fees; applicability;
exception; termination date.
(a) (1) If a trustee's deed upon sale has not been recorded,
a borrower may bring an action for injunctive relief to enjoin a
material violation of section four, five, nineteen or twenty of
this article.
(2) Any injunction will remain in place and any trustee's sale
shall be enjoined until the court determines that the mortgage
servicer, mortgagee, beneficiary, or authorized agent has corrected
and remedied the violation or violations giving rise to the action
for injunctive relief. An enjoined entity may move to dissolve an
injunction based on a showing that the material violation has been
corrected and remedied.
(b) After a trustee's deed upon sale has been recorded, a
mortgage servicer, mortgagee, beneficiary or authorized agent is
liable to a borrower for actual economic damages resulting from a
material violation of section four, five, nineteen or twenty of this article by that mortgage servicer, mortgagee, beneficiary or
authorized agent where the violation was not corrected and remedied
prior to the recordation of the trustee's deed upon sale. If the
court finds that the material violation was intentional or reckless
or resulted from willful misconduct by a mortgage servicer,
mortgagee, beneficiary or authorized agent, the court may award the
borrower the greater of treble actual damages or statutory damages
of $50,000.
(c) A mortgage servicer, mortgagee, beneficiary, or authorized
agent is not liable for any violation that it has corrected and
remedied prior to the recordation of the trustee's deed upon sale,
or that has been corrected and remedied by third parties working on
its behalf prior to the recordation of the trustee's deed upon
sale.
(d) A violation of section four, five, nineteen or twenty of
this article by a person licensed by the Commissioner of Banking,
the West Virginia Real Estate Commission or subject to the
jurisdiction of the West Virginia Business Corporation Act is a
violation of that person's licensing requirements or other
statutory requirements.
(e) A violation of this article does not affect the validity
of a sale in favor of a bona fide purchaser and any of its
encumbrancers for value without notice.
(f) A third-party encumbrancer is not relieved of liability resulting from violations of section four, five, nineteen or twenty
of this article committed by that third-party encumbrancer, that
occurred prior to the sale of the subject property to the bona fide
purchaser.
(g) The rights, remedies and procedures provided by this
section are in addition to and independent of any other rights,
remedies, or procedures under any other law. Nothing in this
section may be construed to alter, limit, or negate any other
rights, remedies, or procedures provided by law.
(h) A court may award a prevailing borrower reasonable
attorney's fees and costs in an action brought pursuant to this
section. A borrower has prevailed for purposes of this subsection
if the borrower obtained injunctive relief or damages pursuant to
this section.
(i) This section applies only to entities described in
subsection (b), section twenty of this article.
(j) This section remains in effect only until January 1, 2018,
and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2018, deletes or extends that
date.
NOTE: The purpose of this bill is to create The West Virginia
Homeowner Bill of Rights. The bill states legislative findings and
its purpose in relation to foreclosures in the state generally. The
bill requires mortgage servicers to contact the borrower prior to
filing a notice of default. The bill requires mortgage servicers to explore options for the borrower to avoid foreclosure. The bill
requires the borrower to be provided with specified information in
writing prior to recordation of a notice of default. The bill
establishes additional procedures to be followed regarding a first
lien loan modification application and the denial of an
application. The bill provides for a borrower's right to appeal a
denial. The bill requires a written notice to the borrower after
the postponement of a foreclosure sale in order to advise the
borrower of any new sale date and time. The bill prohibits the
collection of application fees and the collection of late fees
while a foreclosure prevention alternative is being considered. The
bill authorizes the greater of treble actual damages or $50,000 in
statutory damages if a violation is found to be intentional or
reckless or resulted from willful misconduct. The bill provides
that violations by licensees of certain state agencies are also
violations of those respective licensing laws. The bill requires a
mortgage servicer who conducts more than one hundred seventy-five
foreclosure sales per year or annual reporting period to establish
a single point of contact and provide the borrower with one or more
direct means of communication with the single point of contact. The
bill requires that, before recording or filing any of those
documents, a mortgage servicer shall ensure that it has reviewed
competent and reliable evidence to substantiate the borrower's
default and the right to foreclose, including the borrower's loan
status and loan information. The bill authorizes administrative
enforcement against licensees by certain state agencies. The bill
defines terms. The bill sets forth requirements. The bill
establishes effective and termination dates. The bill authorizes
rule-making.
This article is new; therefore, strike-throughs and
underscoring have been omitted.
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