HOUSE OF REPRESENTATIVES

H.B. NO.

2824

TWENTY-FIFTH LEGISLATURE, 2010

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO DISTRESSED PROPERTY.

 

 

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

 


SECTION 1. Chapter 480E, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"480E- Registration. (a) Beginning on January 1, 2011, no person shall act, represent, or hold oneself out in this State as a distressed property consultant or a distressed property purchaser unless the person registers with the business registration division of the department of commerce and consumer affairs prior to doing business in the State as a distressed property consultant or a distressed property purchaser, respectively.

(b) The department of commerce and consumer affairs shall adopt rules under chapter 91 to implement this section. The department may request, as part of the registration process, copies of any distressed property consultant contracts and distressed property conveyance contracts."

SECTION 2. Section 480E-2, Hawaii Revised Statutes, is amended by amending the definition of "distressed property consultant" to read as follows:

""Distressed property consultant" [means]:

(1) Means any person who performs or makes any solicitation, representation, or offer to perform any of the following relating to a distressed property:

[(1)] (A) Stop or postpone the foreclosure sale or loss of any distressed property due to the nonpayment of any loan that is secured by the distressed property;

[(2)] (B) Stop or postpone the charging of any lien or encumbrance against any distressed property or eliminate any lien or encumbrance charged against any distressed property for the nonpayment of any taxes, lease assessments, association fees, or maintenance fees;

[(3)] (C) Obtain any forbearance from any beneficiary or mortgagee, or relief with respect to a tax sale of the property;

[(4)] (D) Assist the owner to exercise any cure of default arising under Hawaii law;

[(5)] (E) Obtain any extension of the period within which the owner may reinstate the owner's rights with respect to the property;

[(6)] (F) Obtain any waiver of an acceleration clause contained in any promissory note or contract secured by a mortgage on a distressed property or contained in the mortgage;

[(7)] (G) Assist the owner in foreclosure, loan default, or post-tax sale redemption period to obtain a loan or advance of funds;

[(8)] (H) Avoid or ameliorate the impairment of the owner's credit resulting from the recording or filing of a notice of default or the conduct of a foreclosure sale or tax sale; or

[(9)] (I) Save the owner's residence from foreclosure or loss of home due to nonpayment of taxes[.];

["Distressed property consultant" shall]

(2) Shall not include any of the following:

[(1)] (A) A person or the person's authorized agent acting under the express authority or written approval of the federal Department of Housing and Urban Development;

[(2)] (B) A person who holds or is owed an obligation secured by a lien on any distressed property, or a person acting under the express authorization or written approval of such person, when the person performs services in connection with the obligation or lien, if the obligation or lien did not arise as the result of or as part of a proposed distressed property conveyance;

[(3)] (C) Banks, savings banks, savings and loan associations, credit unions, trust companies, depository and nondepository financial service loan companies, and insurance companies organized, chartered, or holding a certificate of authority to do business under the laws of this State or any other state, or under the laws of the United States;

[(4)] (D) Licensed attorneys engaged in the practice of law[;] in the State of Hawaii;

[(5)] (E) Certified public accountants licensed under chapter 466, persons holding a permit to practice public accountancy in the State of Hawaii, and persons holding a valid certified public accountant license issued under the laws of another state or territory who are lawfully practicing in the State of Hawaii with a temporary permit to practice pursuant to rules established by the board of public accountancy and who are subject to regulation by the board of public accountancy while engaged in the practice of public accountancy;

[(6)] (F) A federal Department of Housing and Urban Development approved mortgagee and any subsidiary or affiliate of these persons or entities, and any agent or employee of these persons or entities, while engaged in the business of these persons or entities;

[(7)] (G) A nonprofit organization that, pursuant to chapter 446, offers counseling or advice to an owner of a distressed property, if the nonprofit organization has no contract or agreement for services with lenders, distressed property purchasers, or any person who effects loans or distressed property purchases; or

[(8)] (H) A person currently licensed as an active real estate broker or real estate salesperson in Hawaii pursuant to chapter 467, when acting in the capacity of a real estate broker or real estate salesperson in accordance with customary industry standards."

SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

Distressed Property; Registration

 

Description:

Requires distressed property consultants and distressed property purchasers to register with the department of commerce and consumer affairs prior to doing business in the State. Clarifies that attorneys licensed in the State are not distressed property consultants.

 

 

 

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