Discussion of the Mortgage Foreclosure Task Force 2012 Report

On January 19, 2012, the Mortgage Foreclosure Task Force presented its report to the Senate Committee on Commerce & Consumer Protection and the House Committee on Consumer Protection & Commerce during a joint informational briefing.

The task force was created by the Legislature in 2010 by Act 162 to conduct an extensive analysis of factors affecting mortgage foreclosures in the state and to provide recommendations to the Legislature. The result of their work assisted in the 2011 enactment of Act 48 (Senate Bill 651), a measure that  reforms the foreclosure process by implementing additional protections to individuals facing foreclosure or at-risk of foreclosure.

During the joint informational briefing, the legislative committees were able to hear from the task force about refining the requirements and procedures specified in Act 48. The task force also looked ways that the dispute resolution and the counseling provisions in the law can work better for consumers.

Senate Committee on Commerce & Consumer Protection Chair Roz Baker explained that the committee will be looking at pieces of legislation and will introduce measures to implement the Mortgage Foreclosure Task Force’s recommendations. In conjunction with the tasks force’s recommendations, the committee will also be looking at statutes and procedures relating to lien foreclosures by condominiums and homeowner associations.

Highlights from the report’s final recommendations included include:

  • Make permanent the process under Act 48 for converting nonjudicial foreclosures of residential property into judicial foreclosures;
  • Address practical challenges in the operation of the mortgage foreclosure dispute resolution program;
  • Establish an alternate power of sale foreclosure process specifically for condominium and other homeowner associations;
  • Provide planned community associations organized under chapter 421J, Hawaii Revised Statutes, with the same options as condominium associations with regard to association liens for assessments and the collection of unpaid assessments from tenants or rental agents;
  • Place time limits on condominium and other homeowner association liens for assessments, and prohibit such liens arising solely from fines, penalties, or late fees;
  • Provide specific language explaining the foreclosure process for the public information notice that must be distributed by persons intending to use the power of sale foreclosure process under part II of chapter 667, Hawaii Revised Statutes; and
  • Clarify, improve, and correct errors in the provisions of Act 48, Session Laws of Hawaii 2011.

The complete Mortgage Foreclosure Task Force report is available for download at: http://lrbhawaii.info/reports/legrpts/2012/mort.pdf.

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