Expenses Recoverable by Holders of Consumer Loans After Borrower Reinstatement and Cancellation of a Trustee’s Sale By Jordan C. Maddy, Esq. and Joshua A. Lanham, Esq., Bowles Rice LLP Foreclosure is an inherently expensive process, and the West Virginia Consumer Credit Protection Act (WVCCPA) limits the default charges that may be charged to consumer borrowers following the reinstatement of their loans. Nevertheless, West Virginia Code § 46A-2-115 provides an avenue through which holders of consumer loans may recover various foreclosurerelated expenses. This statute was amended by the West Virginia Legislature in 2016 to make it easier for consumer lenders to collect the fees identified by the amended statute. Before 2016, it was unclear whether the prior version of the statute authorized creditors to recover foreclosure-related expenses after consumers reinstated their loans prior to a trustees’ sale. Prudent creditors were faced with a dilemma: they could either allow defaulting borrowers to reinstate their loans after the foreclosure process had started and forego the recovery of foreclosure-related expenses; or they could reject borrowers’ requests to reinstate their loans, go forward with a trustees’ sale, and recover foreclosure-related expenses from the proceeds of the trustees’ sale. The 2016 amendments were intended to benefit consumer lenders and consumer borrowers by incentivizing lenders to allow borrowers to reinstate their loans and by allowing creditors to recover reasonably incurred foreclosure-related expenses following loan reinstatement and cancellation of a trustees’ sale. While the West Virginia Supreme Court of Appeals has yet to construe the WVCCPA’s limitations on default charges provision following the legislature’s 2016 amendments, the amended language supports the considerations that resulted in the current version of the statute. The statute expressly provides that creditors may recover: (A) Costs of publication; (B) an appraisal fee; (C) all costs incidental to a title examination, including professional fees, expenses incident to travel and copies of real estate tax records; (D) expenses incidental to notice made to lienholders and other parties and entities having an interest in the real property to be sold; (E) certified mailing costs; and (F) all fees and expenses incurred by a trustee incident to a pending trustee’s sale of the real property securing the consumer loan. W. VA. Code § 46A-2-115(b)(2) (emphasis added). The catchall provision in subsection (F) is particularly notable, given its scope. Moreover, subsection (F)’s scope is buttressed by subsection 13 West Virginia Banker
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