Report Title:

Foreclosure

 

Description:

Provides a vehicle to allow more time to a defaulting mortgagor facing foreclosure.

 


HOUSE OF REPRESENTATIVES

H.B. NO.

304

TWENTY-FIFTH LEGISLATURE, 2009

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT


 

 

RELATING TO FORECLOSURES.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


SECTION 1. Section 667-1, Hawaii Revised Statutes, is amended to read as follows:

"667-1 Foreclosure by action. The circuit court may assess the amount due upon a mortgage, whether of real or personal property, without the intervention of a jury, and shall render judgment for the amount awarded, and the foreclosure of the mortgage[.]; provided that, in the case of a real property foreclosure, the court shall allow at least            days between the assessment and judgment. Execution may be issued on the judgment, as ordered by the court."

SECTION 2. Section 667-5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) When a power of sale is contained in a mortgage, and where the mortgagee, the mortgagee's successor in interest, or any person authorized by the power to act in the premises, desires to foreclose under power of sale upon breach of a condition of the mortgage, the mortgagee, successor, or person shall allow at least            days after contact is made with the mortgagor before filing a notice of default.

The mortgagee, successor, or person authorized by the power of sale to act in the premises shall be represented by an attorney who is licensed to practice law in the State and is physically located in the State. The attorney shall[:], at the appropriate time:

(1) Give notice of the mortgagee's, successor's, or person's intention to foreclose the mortgage and of the sale of the mortgaged property, by publication of the notice once in each of three successive weeks (three publications), the last publication to be not less than fourteen days before the day of sale, in a newspaper having a general circulation in the county in which the mortgaged property lies; and

(2) Give any notices and do all acts as are authorized or required by the power contained in the mortgage."

SECTION 3. Section 667-22, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) When the mortgagor or the borrower has breached the mortgage agreement, and when the foreclosing mortgagee intends to conduct a power of sale foreclosure under this part, the foreclosing mortgagee shall prepare a written notice of default addressed to the mortgagor, the borrower, and any guarantor. The notice of default shall state:

(1) The name and address of the current mortgagee;

(2) The name and last known address of the mortgagor, the borrower, and any guarantor;

(3) The address or a description of the location of the mortgaged property, and the tax map key number of the mortgaged property;

(4) The description of the default, and if the default is a monetary default, an itemization of the delinquent amount shall be given;

(5) The action that must be taken to cure the default, including the amount to cure the default, together with the estimated amount of the foreclosing mortgagee's attorney's fees and costs, and all other fees and costs estimated to be incurred by the foreclosing mortgagee related to the default by the deadline date;

(6) The date by which the default must be cured, which deadline date shall be at least [sixty]            days after the date of the notice of default;

(7) That if the default is not cured by the deadline date stated in the notice of default, the entire unpaid balance of the moneys owed to the mortgagee under the mortgage agreement will be due, that the mortgagee intends to conduct a power of sale foreclosure to sell the mortgaged property at a public sale without any court action and without going to court, and that the mortgagee or any other person may acquire the mortgaged property at the public sale; and

(8) The name, address, including electronic address, and telephone number of the attorney who is representing the foreclosing mortgagee; provided that the attorney shall be licensed to practice law in the State and physically located in the State."

SECTION 4. Section 667-25, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The public sale of the mortgaged property shall take place on the later of the following:

(1) At least [sixty]            days after the public notice of the public sale is distributed under section 667-27; or

(2) At least [fourteen]            days after the date of the publication of the third public notice advertisement under section 667-27."

SECTION 5. Section 667-27, Hawaii Revised Statutes, is amended as follows:

1. By amending subsection (b) to read:

"(b) The public notice shall also contain wording substantially similar to the following in all capital letters:

"THE DEFAULT UNDER THE MORTGAGE AGREEMENT MAY BE CURED NO LATER THAN [THREE]            BUSINESS DAYS BEFORE THE DATE OF THE PUBLIC SALE OF THE MORTGAGED PROPERTY BY PAYING THE ENTIRE AMOUNT WHICH WOULD BE OWED TO THE FORECLOSING MORTGAGEE IF THE PAYMENTS UNDER THE MORTGAGE AGREEMENT HAD NOT BEEN ACCELERATED, PLUS THE FORECLOSING MORTGAGEE'S ATTORNEY'S FEES AND COSTS, AND ALL OTHER FEES AND COSTS INCURRED BY THE FORECLOSING MORTGAGEE RELATED TO THE DEFAULT, UNLESS OTHERWISE AGREED TO BETWEEN THE FORECLOSING MORTGAGEE AND THE BORROWER. THERE IS NO RIGHT TO CURE THE DEFAULT OR ANY RIGHT OF REDEMPTION AFTER THAT TIME. IF THE DEFAULT IS SO CURED, THE PUBLIC SALE SHALL BE CANCELED.""

2. By amending subsection (d) to read:

"(d) The foreclosing mortgagee shall have the public notice of the public sale published in the classified section of a daily newspaper of general circulation in the county where the mortgaged property is located. The public notice shall be published once each week for three consecutive weeks (three publications). The public sale shall take place no sooner than [fourteen]            days after the date of the publication of the third public notice advertisement."

SECTION 6. Section 667-28, Hawaii Revised Statutes, is amended by amending subsections (b) and (c) to read as follows:

"(b) If there is a postponement of the public sale of the mortgaged property, a new public notice of the public sale shall be published once in the format described in section 667-27. The new public notice shall state that it is a notice of a postponed sale. The public sale shall take place no sooner than [fourteen]            days after the date of the publication of the new public notice. No sooner than [fourteen]            days before the date of the public sale, a copy of the new public notice shall be posted on the mortgaged property or on such other real property of which the mortgaged property is a part, and it shall be mailed or delivered to the mortgagor, to the borrower, and to any other person entitled to receive notice under section 667-27.

(c) The default under the mortgage agreement may be cured no later than [three] ________ business days before the date of the public sale of the mortgaged property by paying the entire amount which would be owed to the foreclosing mortgagee if the payments under the mortgage agreement had not been accelerated, plus the foreclosing mortgagee's attorney's fees and costs, and all other fees and costs incurred by the foreclosing mortgagee related to the default, unless otherwise agreed to between the foreclosing mortgagee and the borrower. There is no right to cure the default or any right of redemption after that time. If the default is so cured, the public sale shall be canceled."

SECTION 7. Section 667-32, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The recitals in the affidavit required under subsection (a) may, but need not, be substantially in the following form:

"(1) I am duly authorized to represent or act on behalf of                      (name of mortgagee) ("foreclosing mortgagee") regarding the following power of sale foreclosure. I am signing this affidavit in accordance with the alternate power of sale foreclosure law (Chapter 667, Part II, Hawaii Revised Statutes);

(2) The foreclosing mortgagee is a "foreclosing mortgagee" as defined in the power of sale foreclosure law;

(3) The power of sale foreclosure is of a mortgage made by                      (name of mortgagor) ("mortgagor"), dated           , and recorded in the                 (bureau of conveyances or office of the assistant registrar of the land court) as                 (recordation information). The mortgaged property is located at:                      (address or description of location) and is identified by tax map key number:           . The legal description of the mortgaged property is attached as Exhibit "A". The name of the borrower, if different from the mortgagor, is                      ("borrower");

(4) Pursuant to the power of sale provision of the mortgage, the power of sale foreclosure was conducted as required by the power of sale foreclosure law. The following is a summary of what was done:

(A) A notice of default was served on the mortgagor, the borrower, and the following person:                     . The notice of default was served on the following date and in the following manner:                     ;

(B) The date of the notice of default was            (date). The deadline in the notice for curing the default was            (date), which deadline date was at least [sixty]            days after the date of the notice;

(C) The notice of default was recorded before the deadline date in the                 (bureau of conveyances or office of the assistant registrar of the land court). The notice was recorded on            (date) as document no.           . A copy of the recorded notice is attached as Exhibit "1";

(D) The default was not cured by the deadline date in the notice of default;

(E) A public notice of the public sale was initially published in the classified section of the                     , a daily newspaper of general circulation in the county where the mortgaged property is located, once each week for three consecutive weeks on the following dates:                . A copy of the affidavit of publication for the last public notice of the public sale is attached as Exhibit "2". The date of the public sale was            (date). The last publication was not less than [fourteen]            days before the date of the public sale;

(F) The public notice of the public sale was sent to the mortgagor, to the borrower, to the state director of taxation, to the director of finance of the county where the mortgaged property is located, and to the following:                  . The public notice was sent on the following dates and in the following manner:                     . Those dates were after the deadline date in the notice of default, and those dates were at least [sixty]            days before the date of the public sale;

(G) The public notice of the public sale was posted on the mortgaged property or on such other real property of which the mortgaged property is a part on            (date). That date was at least [sixty]            days before the date of the public sale;

(H) Two public showings (open houses) of the mortgaged property were held (or were not held because the mortgagor did not cooperate);

(I) A public sale of the mortgaged property was held on a business day during business hours on:            (date), at            (time), at the following location:                     . The highest successful bidder was                                           (name) with the highest successful bid price of $(          ; and

(J) At the time the public sale was held, the default was not cured and there was no circuit court foreclosure action pending in the circuit where the mortgaged property is located; and

(5) This affidavit is signed under penalty of perjury.""

SECTION 8. Section 667-62, Hawaii Revised Statutes, is amended by amending subsections (a), (b), and (c) to read as follows:

"(a) When a power of sale is contained in a mortgage of a time share interest, the mortgagee or the mortgagee's successor in interest or any person authorized by the power to act in the premises, upon a breach of the condition, [may foreclose] shall allow at least            days after contact is made with the mortgagor before foreclosing upon the mortgage by:

(1) Giving notice of the intention to foreclose the mortgage, and of the sale of the mortgaged time share interest by:

(A) Certified mail, return receipt requested, to the mortgagor at the mortgagor's last known address, for mortgagors whose address is within the United States; or

(B) Mail to the mortgagor at the mortgagor's last known address, for mortgagors whose address is outside the United States; and

(C) Publication once in each of three successive weeks (three publications), the last publication to be not less than [fourteen]            days before the day of sale, in a newspaper of general circulation in the county in which the mortgaged time share interest lies; and

(2) Giving such notices and do all such acts as are authorized or required by the power contained in the mortgage.

Copies of the notice shall be filed with the state director of taxation and shall be posted on the premises of the time share interest not less than [twenty-one]            days before the day of sale.

(b) The day of sale may be at any time after [four]            weeks from the date of publication of the first notice pursuant to subsection (a)(1). Any sale of which notice has been given pursuant to subsection (a) may be postponed from time to time by public announcement made by the mortgagee or by some person acting on the mortgagee's behalf.

(c) Within [thirty]            days after selling the time share interest pursuant to the power of sale, the mortgagee shall file a copy of the notice of sale and the mortgagee's affidavit in the bureau of conveyances. The affidavit may lawfully be made by any person duly authorized to act for the mortgagee and in such capacity conducting the foreclosure, and shall set forth the mortgagee's acts in the time share interest fully and with particularity. The notice may contain a description of the mortgaged time share interest and the time and place proposed for its sale."

SECTION 9. Section 667-63, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The mortgagee receiving the request shall thereafter give notice to all mortgage creditors who have timely submitted their request. The notice shall be sent by mail or otherwise communicated to the mortgage creditors not less than [seven]            calendar days prior to the day of sale."

SECTION 10. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 11. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored, except that the underscoring in the form in section 667-32, Hawaii Revised Statutes, as set forth in section 7 of this Act, is not indicating new statutory material and shall be set forth as part of the form.

SECTION 12. This Act shall take effect upon its approval.

 

INTRODUCED BY:

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