Breaking News: Hawaii Passes Sb 651 Foreclosure Bill

Hopeful In Hawaii

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Apr 10, 2010
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Yeah! You gotta love the way Martin write!

"I think we can safely file the outcome under “DRUBBING,” or “SHELLACKING,” and for those in the media trying to come up with appropriate headlines to describe what happened, might I suggest:
The Total Massacre of the Banking Lobby "

Roz Baker is going to get the Gov. to sign as soon as possible so no more foreclosures can happen and so the banks don't start going nuts and messing with it!
 

Hopeful In Hawaii

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Apr 10, 2010
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And this is from Rep Rida, who also really " get's it!

This floor speech was submitted by Hawaii House Representative, Rida T.R. Cabanilla, (D) Waipahu, Honolulu, West Loch, Ewa on May 3, 2011.

HAWAII SB651 SD2 HD2 CD1

Mr. Speaker, colleagues, I appreciate the intent of SB651. While it may not be the instantaneous answer to our foreclosure crisis, it has furthered the conversation. This measure will lead to a foundation of effective reforms, from both the judicial and the administrative branch. This bill acknowledges that there are serious problems with how foreclosures have been handled in Hawaii. Our non-judicial foreclosure process, one of the most draconian in the country, was originally designed to make it easy to take land from Native Hawaiians. Repealing the non-judicial foreclosure law is a step in the right direction.

It is important to remember that banks from the mainland do not own most of these properties or even the mortgages. They are only servicers. The loans were sold to investors or paid for by TARP and/or insurance funds in some cases thirty times the value.

In a complex Wall Street Ponzi screen, together with Mortgage Electronic Registration System (MERS) and large insurance companies, the homeowner is doomed to fail from the first instance while the top New York Wall Street investment bank CEOs and big banks financially benefited from this crisis; all while knowing that the overall economy was in a steep decline, causing massive unemployment and ultimately borrowers to default on loans.

In a delusional “too big to fail” state of mind, hoping to stave off a complete collapse, Wall Street developed the defective financial products known as subprime loans (also known as ARMs, HIBORs, LIBORs, HELOCs). They bundled millions of mortgages into thousands of trusts, insured them and falsely rated these securitized mortgages triple A; which enabled Wall Street to attract TRILLIONS of dollars in investor funds and peel off their risks – in just a little over 5 years.

By Friday, September 12, 2008 Wall Street knew that the game of intentionally inflating appraisals, lowering lending standards, and overrating trust bonds was over. These were wrongdoings in which the Hawaii borrower had no control. From that point forward the foreclosure devastation in Hawaii began to get ugly.

Mr. Speaker, this Ponzi scheme induced many mortgage brokers to fabricate information for their borrowers; it seduced some borrowers to agree to lie about income. They were all told from the top, “don’t worry about the loan now, they don’t care how much money you make, just maintain your credit and you can always refinance later”. Others were coerced into wrapping their unsecured credit card debt in to their secured mortgage loan, essentially eating up whatever equity they may have had – and paying a lot more in the long run. The borrowers maintained their payments and their credit scores until they lost their jobs and wages as the economy collapsed.

This is not only a financial crisis, but also a moral one, in which deceit was encouraged from the top of our financial system all the way down to the homeowner. Borrowers were offered candy and then, by the very mechanisms purposely set in place, lost their investments and their homes.

Although the intent of SB 651 is beneficial to Hawaii, in order to save our economy and our precious land from being taken over by mainland banks we must take further and more dramatic steps. I am committed to taking whatever steps are necessary next session, to bring accountability to the banking industry and to retain Hawaiian land in the hands of our locals.

My concern, as explained to me by a local foreclosure defense attorney, is that with SB651 there will be a rush to file thousands of Part I non-judicial power of sale action notices immediately before its effective date if it passes, and after the Bill becomes effective the bill's dispute resolution procedures will look like a ghost town as intelligent lenders will just bypass it entirely, rendering the moratorium useless, by filing judicial foreclosures instead, which could further harm the homeowner in that the bill then allows the taking of deficiency judgments.

I am also concerned that come October 1, 2011 if the DCCA has not been able to put its dispute resolution program into operation it appears the entire Bill evaporates.

Mr. Speaker, the mortgage foreclosure task force included numerous banking industry representatives, including a representative of the Hawaii Financial Services Association, of which Bank of America, one of the most egregious players in this mess, is a member. This is basically allowing the fox to guard the henhouse.

Mr. Speaker, again, while I support the intent of this measure, and will vote yes, since it is the only serious foreclosure bill that we have at this time, I am concerned that it won’t stop foreclosures to a large enough degree, and I urge my colleagues to work on a stronger legislation in the immediate future.
 

Hopeful In Hawaii

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Apr 10, 2010
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Thanks! We are just waiting for the Gov. to sign it, hopefully soon.

It will be interesting to see if there will suddenly be a lot of new Judicial foreclosure being filed, or if things really slow down, and more work-outs get now that the banks have to show the notes, transfers, assignments, etc.

They were not doing a lot of deficiency judgments prior to this bill, but now they can not do them for non-judicial foreclosures, even if Dispute Resolution still winds up with a foreclosure for owner-occupants, unless they have other homes.
 

Hopeful In Hawaii

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Governor Abercrombie Signed The Foreclosure Bill Today!


Thank you Governor Abercrombie, Senator Roz Baker, and Representative Bob Herkes for all of your hard work. Congratulations FACE leaders for creating the best foreclosure mediation law in the land!

Thanks to the MANY People who showed up to actions and gave testimony for the bills!

THanks to this forum and the members who have helped educate me, To Moe, Evan, Charlie Peter, Mike Angela and the REST
REPORT Crew and to Martin Andelman for giving us so much help and promotion, and a great education!
 

Hopeful In Hawaii

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SB 651, SD 2, HD 2, CD1Relating to Mortgage Foreclosures

Summary

Hawaii, like many other states, has seen a tremendous rise in foreclosures. While some of these are unavoidable and are related to the current economic downturn, others appear to be direct result of lenders and borrowers failing to come together to resolve their differences and come up with an arrangement that would allow owners to remain in their homes. Hawaii’s citizens have spoken loudly and clearly, that they would like a process which would at least give them opportunity to meet with their lenders face‐to‐face to try and save their homes from foreclosure, instead of the existing process which leaves them feeling ignored, neglected and even deceived.

SB 651, first and foremost, provides a way to bring lenders and owners to the table to give them an opportunity to come up with a mutually acceptable solution. It creates a mortgage foreclosure dispute resolution program, involving a trained neutral to facilitate communication between the parties to maximize the likelihood of a successful outcome. The program will be administered by the State’s Department of Commerce and Consumer Affairs with assistance from the State Judiciary’s Center for Alternative Dispute Resolution.

The key components of SB 651 are ‐‐

Mortgage Foreclosure Dispute Resolution (MFDR) Program:

The Mortgage Foreclosure Dispute Resolution Program provides an opportunity for owner‐occupants of residential property in foreclosure to meet face‐to‐face with the lenders to modify their loans or to work out a payment plan within three months.

The program is established and administered by the Department of Commerce and Consumer Affairs – Office of Administrative Hearings (DCCA‐OAH) for non‐judicial foreclosures with assistance from the Judiciary.

The program is limited to owner‐occupants of residential property who have resided at the property for minimum 200 consecutive days.

Mortgagees and owner‐occupants are required to participate in MFDR if the mortgagee chooses to pursue non‐judicial foreclosure.

The foreclosure process is suspended until the dispute resolution is completed.

The Mortgage Foreclosure Dispute Resolution Special Fund is established and funded by fees collected by the parties who choose to participate in the program, and by filing fees from notices of non‐judicial foreclosures which are filed in the Bureau of Conveyances and the Land Court.

The program will begin no later than October 1, 2011 and will continue until September 30, 2014.
How the Mortgage Foreclosure Dispute Resolution (MFDR) Program will work:

Mortgagees may begin filing notices of non‐judicial foreclosure with DCCA on October 1, 2011. Dispute resolution proceedings for these notices will commence on January 1, 2012.

Mortgagees must file a notice of non‐judicial foreclosure with DCCA with a filing fee of $250 which will go to the MFDR special fund.

Upon receiving the notice, DCCA will send a notice to the owner‐occupant regarding the opportunity to engage in dispute resolution, information about the program, an election form, and instructions and contact information for the program and DCCA.

The foreclosure process is suspended from the time the DCCA receives notice of the non‐judicial foreclosure.

The owner‐occupant has 30 days after receiving DCCA’s notice to elect dispute resolution and pay a $300 program fee. If the owner elects dispute resolution, the Mortgagee must also pay a $300 program fee.

If the owner does not elect dispute resolution, then the foreclosure process is resumed.

Upon receiving the owner‐occupant’s election form, DCCA must open a dispute resolution case and notify the parties within 14 days of the date, time, and location of the dispute resolution session. The session must be scheduled between 30 and 60 days from this notification date – unless the parties and neutral agree to an alternative date. In addition, the notice will include information about the dispute resolution process (i.e., rules, requirements, consequences, and penalties for noncompliance).

If the parties are able to reach an agreement during the dispute resolution session, the foreclosure is terminated

If the parties are unable to reach an agreement during the dispute resolution session, the foreclosure is resumed.

A Mortgagee who fails to comply with the program may not proceed with non‐judicial foreclosure. Additional penalties for noncompliance include fines of up to $1,500.
Other Provisions in SB 651:

An owner‐occupant subject to non‐judicial foreclosure may convert to judicial foreclosure by filing a petition with the Circuit Court within 30 days after receiving a foreclosure notice.

There is a 45‐day phase‐in period after filing the petition where all owner‐occupants, mortgagors, and signers of the promissory note with interest in the residential property being subject to foreclosure action must file a statement with the Circuit Court that they agree to submit themselves to the judicial process.

This section will not apply to owner‐occupants who have elected to participate in the MFDR program.

Condominium associations are authorized to collect past‐due association assessments of up to $7,200.

Mortgagees are prohibited to pursue deficiency judgments against owner‐occupants after a non‐judicial foreclosure when they do not have fee simple or leasehold ownership interest in any other real property.

Mortgage servicers with a 20% market share in the State must maintain a local office and give notice of voluntary surrender of a license at least 30 days before surrender. ‐2‐


SECTION 40. There shall be a moratorium on all new nonjudicial foreclosure actions under part I of chapter 667, Hawaii Revised Statutes, for property located in this State to begin on the effective date of this Act and to end on July 1, 2012. No foreclosure by power of sale pursuant to section 667‑5, Hawaii Revised Statutes, shall be initiated and the registrar of the bureau of conveyances shall not record an affidavit or notice of sale pursuant to section 667-5, Hawaii Revised Statutes, for a power of sale foreclosure under section 667-5, Hawaii Revised Statutes, initiated during the moratorium period established by this Act.
( The Bill was made Law on May 5th , so no NJ foreclosures can be filed until Oct 1st, and the actual mediation begins Jan 2012 )

SEE


The Bill
SB651 CD1.DOC
Steps revisions, Testimony etc

Measure History
5/6/2011 H Act 048, on 5/5/2011 (Gov. Msg. No. 1150).
 

Hopeful In Hawaii

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§667-AB Actions and communications with the mortgagor in connection with a foreclosure. A foreclosing mortgagee shall be bound by all agreements, obligations, representations, or inducements made on its behalf by its agents including but not limited to its employees, representatives, mortgage servicers, or persons authorized by a foreclosing mortgagee or lender pursuant to an affiliate statement recorded in the bureau of conveyances pursuant to section 667-AA.
For purposes of this section, "foreclosing mortgagee" has the same meaning as in section 667-21.
§667-AC Unfair or deceptive act or practice. Any foreclosing mortgagee who violates this chapter shall have committed an unfair or deceptive act or practice under section 480-2."


Note From me: Hawaii unfair or deceptive act or practice under section 480-2."[/B] allows for 3 times the damages plus attorney's fees.
 

skhandy

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Jul 21, 2010
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It is amazing to me that the people in Hawaii think that by legislating changes that the Hawaii homeowner will benefit! I think it is the Aloha spirit run amuck. The locals go cry to their representatives and the end result will be JUDICIAL foreclosures and banks that will refuse to lend to local families who want to purchase a home. Hawaii will be too risky and contracts will be percieved to not be worth the paper that they are written on.

If I seem a tad bit passsionate about this it is because our home in Hawaii was supposed to be foreclosed on last month. All this has done is prolonged our situation. Seriously, it will only take longer now for the free market to coreect itsself and the Hawaiian people will be the ones to suffer because of their short sitedness.
Fannie Mae, who owns our loan has announced that they will go straight for the Judical foreclosure. They are taking their ball and going home!
 

Hopeful In Hawaii

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Apr 10, 2010
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It is amazing to me that the people in Hawaii think that by legislating changes that the Hawaii homeowner will benefit! I think it is the Aloha spirit run amuck. The locals go cry to their representatives and the end result will be JUDICIAL foreclosures and banks that will refuse to lend to local families who want to purchase a home. Hawaii will be too risky and contracts will be percieved to not be worth the paper that they are written on.

If I seem a tad bit passsionate about this it is because our home in Hawaii was supposed to be foreclosed on last month. All this has done is prolonged our situation. Seriously, it will only take longer now for the free market to coreect itsself and the Hawaiian people will be the ones to suffer because of their short sitedness.
Fannie Mae, who owns our loan has announced that they will go straight for the Judical foreclosure. They are taking their ball and going home!
Actually, the only way I would tweak this bill now is to allow foreclosures when both sides agree.

Which actually this new law DOES include! It's just that it can not happen till after Oct 1st.

Also, they need to require full proof of ownership for Judicial foreclosures and the same penalties for coming to court with out them or " creating" them.

I have a good feeling Hawaii will correct this.

It is NOT Hawaii that is creating the problem it is the banks trying to get away with stealing and illegal behavior.

BTW, " banks that will refuse to lend to local families who want to purchase a home. Hawaii will be too risky and contracts will be percieved to not be worth the paper that they are written on." , sorry but those are " Talking Points" taken right of the Bankers PR Propoganda Book, and simply not true.

Not only that, what is it exactly that would have banks find Hawaii "too risky" and contracts not worth anything" ?????

Because they would require a bank to show proper paperwork, and do a simple and fair mediation?
That makes no sense at all.!
 

Hopeful In Hawaii

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Apr 10, 2010
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skhandy,

Also just because the foreclosure is judicial does NOT mean that you will have to pay deficiency.
Only that you "might". That was also true for non-judicial as well, but now, all non judicial foreclosures do not have to pay
UNLESS you have another home or the home is not owner occupied.

You might actually make out better in Judicial because you can explain your situation to the judge, why you HAD to move to get a job , etc
 

nalagirl

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Jan 19, 2012
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Hi there I've been trying to get a loan modification for three years. Within the three years I've been scammed and now I'm in foreclosure that is on 5/1 what r my option now I'm in Hawaii... But now my income has increase what should I do...
 

Hopeful In Hawaii

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Apr 10, 2010
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Hi there I've been trying to get a loan modification for three years. Within the three years I've been scammed and now I'm in foreclosure that is on 5/1 what r my option now I'm in Hawaii... But now my income has increase what should I do...
Is it a judicial foreclosure? If so you must hire an attorney right away.
If not, they have to try mediation first, but I would still get an attorney to help you.
What island?
 

nalagirl

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Jan 19, 2012
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Hi Hopeful In Hawaii, I'm on Oahu r u on the island? How do I check if it's judicial? I've been trying to look for a home defense attorney? Any recommendations? I have a court date 5/1. I was summoned 6/11 hired an attorney my attorney answered back within in 20 days. This attorneys approach was to get a loan modification I got denied in 11-2012 due to NPV. This attorney didn't understand what NPV means I was disappointed because I knew more loan modification lingual because I've been researching this for three years. I then discharge them and hired another lawyer from the mainland not knowing that he will not help me with my foreclosure only with my loan mod. More I'm in depression because I had paid him already. He didn't do anything yet he just sent an appeal to them but BOA statednI needed to call to appeal it. Being that I withdrew counsel with my previous attorney BOA is moving forward with my foreclosure. There s a change in circumstances my husband and I are working more now. Was told my file is close because I didn't respond to the appeal but I can send in updated paystubs and refer to the NPV denial chart and look over it. I called an organization that will open a loan modification again for me for free. Are u on the islands? Do you have the editor number? None of the court papers I receive did not say any edition. That was a surprise when I read your comment about mediation. Do you have their number. My home is not underwater but being that I haven't paid for 18 months I think it weighed off. Our 3rd party scammer informed Us to not pay for our mortgage because this will show hard ship. As months past we tried to pay half but the check was return to us boa wanted the full amount hardship. As months past by it was too hard to catch up. Can someone advise me. I got my reinstatement can I pay half of it? Also if I will be able to get a mediator I was told my chances are thin because it not owned by frannie Mae. I have Bank of New York who holds the trust. What can I? Pls help.. I wish the streamline refinance wa available 3 years ago. If you do live in Hawaii will you be able to call me...thank u
 

Hopeful In Hawaii

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Apr 10, 2010
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I am not on Oahu , but I have a friend that works with Attorney Gary Dubin and he seems to really know his stuff, and is doing good with these cases
and he certainly knows what NPV means!!!

I understand, it took me a long time to find an attorney that really understands. I am not in foreclosure, I am actually the plaintiff in my case, I had enough and decided to go after them first.

I really feel for you and understand what you are going through if I were you I would contact Dubin right now, you can at least get a free consultation.
Also try contacting Ginny ( Virginia ) via her blog Deadly Clear, she works with him and you can see she knows her stuff! http://deadlyclear.wordpress.com

I would not give them a dime until you talk to Dubin, Please contact him or ginny right away!

Info on mediation is here

http://hawaii.gov/dcca/hfic

But I do even know if anyone has used it yet, since they changed the law, the forclosures seem to be all Judicial and you really need an attorney for that. I am so sorry you had those issues, it was my biggest concern when looking for an attorney also.
 
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nalagirl

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Jan 19, 2012
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I am not on Oahu , but I have a friend that works with Attorney Gary Dubin and he seems to really know his stuff, and is doing good with these cases
and he certainly knows what NPV means!!!

I understand, it took me a long time to find an attorney that really understands. I am not in foreclosure, I am actually the plaintiff in my case, I had enough and decided to go after them first.

I really feel for you and understand what you are going through if I were you I would contact Dubin right now, you can at least get a free consultation.
Also try contacting Ginny ( Virginia ) via her blog Deadly Clear, she works with him and you can see she knows her stuff! http://deadlyclear.wordpress.com

I would not give them a dime until you talk to Dubin, Please contact him or ginny right away!

Info on mediation is here

Hawaii Foreclosure Information Center — Department of Commerce & Consumer Affairs

But I dont even know if anyone has used it yet, since they changed the law, the forclosures seem to be all Judicial and you really need an attorney for that. I am so sorry you had those issues, it was my biggest concern when looking for an attorney also.
Hi Hopeful In Hawaii attny Gary Dubin was my first attorney i went to . he said I had a good case. His approach was to investigate my loan, he charges a whole lot which I can'tcome up with the money and was told he lost a lot of cases. I'm so confuse... Spoke to a lot of people I wanted to have my mortgage audited what do I look for? I was with countrywide then was transferred to Bank of America. When I first defaulted BONY then bought my loan I believe. Should I file bankruptcy? I spoke with a foreclosure counselor she said I'm late in the game I need tohave a mediation. But she said i might have a hard time because I'm neither Fannie Mae or Freddie Mac. She never saw any good outcome. She i will need to send in a new modification because change in circumstances.. What to do.
 

Hopeful In Hawaii

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Apr 10, 2010
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So Dubin was the one you hired? I KNOW he knows what NPV is. Or did you consult with him and not hire him?

I do not know his fees, but it is not cheap to hire an attorney. You should just ask him about his success rate, or talk to ginny.

NOBODY has a lot of success's at this thing. and it is just starting to happen now.
But BOA is required to give out settlement money, things have changed in just the last few months.

I do not know much about bankrupcy except that that type of court seems to do better with these things.

I wish I could help you, you might try FACE Hawaii, they helped get the laws passed.

But if you have equity, and if you think you can afford a mod I would ask an attorney for a way to
pay a set amount a month. Many do this, whatever they bill, they still limit the amount you have to pay each month.