Senate Bill No. 749
(By Senators Wooton, Ball, Bowman, Dittmar, Hunter, Kessler,
Oliverio, Ross, Schoonover, Snyder, White, Buckalew, Deem, Kimble
and Scott)
____________
[Originating in the Committee on the Judiciary;
reported February 26, 1998.]
____________
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 to limit security
interests in homestead property in connection with credit sales or
loans for home improvement when the contract for the home
improvement has been solicited outside of a business establishment.
This section is new; therefore, strike-throughs and
underscoring have been omitted.)