H.B. NO.



H.D. 1


S.D. 1














     SECTION 1.  Chapter 667, Hawaii Revised Statutes, is amended by adding a new section to part I to be appropriately designated and to read as follows:

     "§667-    Credit counseling.  (a)  No later than thirty days prior to initiating any power of sale foreclosure under section 667-5, a foreclosing mortgagee shall provide a consumer who is an owner-occupant of a mortgaged property that is subject to foreclosure written notice of the availability of credit counseling.  The notice shall be sent by first class mail to the address of the mortgaged property or to the address designated by the mortgagor by written notice to the mortgagee as the mortgagor's address for receipt of notice.

     (b)  Written notice required under this section shall advise the mortgagor of the availability of counseling through credit counseling agencies approved by the United States Department of Housing and Urban Development or its successor and of the toll-free telephone number maintained by the United States Department of Housing and Urban Development or its successor to provide information regarding approved credit counseling services provided in the State."

     SECTION 2.  Section 667-5, Hawaii Revised Statutes, is amended to read as follows:

     "§667-5  Foreclosure under power of sale; notice; affidavit after sale.  (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 be represented by an attorney who is licensed to practice law in the State and is physically located in the State.  The attorney shall:

     (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.

     (b)  Copies of the notice required under subsection (a) shall be:

     (1)  Filed with the state director of taxation; and

     (2)  Posted on the premises not less than twenty-one days before the day of sale.

     (c)  Upon the request of any person entitled to notice pursuant to this section and sections 667-5.5 and 667-6, the attorney, the mortgagee, successor, or person represented by the attorney shall disclose to the [requestor] requester the following information:

     (1)  The amount to cure the default, together with the estimated amount of the foreclosing mortgagee's attorneys' fees and costs, and all other fees and costs estimated to be incurred by the foreclosing mortgagee related to the default prior to the auction within five business days of the request; and

     (2)  The sale price of the mortgaged property once auctioned.

     (d)  If the mortgagor, who is a consumer and an owner-occupant of a mortgaged property, requests in writing a copy of the promissory note and mortgage document, the mortgagee shall not initiate foreclosure proceedings under this section until the mortgagee has sent those copies to the mortgagor by certified, registered, or express mail, postage prepaid and return receipt requested.  The request by the mortgagor shall be sent by certified, registered, or express mail, postage prepaid and return receipt requested, to the address of the mortgagee or its agent as stated in the credit counseling notice referred to in section 667-  (a) within fifteen days after the date of notice.

     [(d)] (e)  Any sale, of which notice has been given as aforesaid, may be postponed from time to time by public announcement made by the mortgagee or by some person acting on the mortgagee's behalf.  Upon request made by any person who is entitled to notice pursuant to section 667-5.5 or 667-6, or this section, the mortgagee or person acting on the mortgagee's behalf shall provide the date and time of a postponed auction, or if the auction is canceled, information that the auction was canceled.  The mortgagee, within thirty days after selling the property in pursuance of the power, shall file a copy of the notice of sale and the mortgagee's affidavit, setting forth the mortgagee's acts in the premises fully and particularly, in the bureau of conveyances.

     [(e)] (f)  The affidavit and copy of the notice shall be recorded and indexed by the registrar, in the manner provided in chapter 501 or 502, as the case may be.

     [(f)] (g)  This section is inapplicable if the mortgagee is foreclosing as to personal property only."

     SECTION 3.  Section 667-5.7, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§667-5.7[]]  Public sale.  At any public sale pursuant to section 667-5, the successful bidder at the public sale, as the purchaser, shall not be required to make a downpayment to the foreclosing mortgagee of more than ten per cent of the highest successful bid price.  If a mortgaged property is owned and occupied by the mortgagor who is a consumer, a public sale price of seventy per cent of the fair market value of the mortgaged property, as established by an appraisal or broker's price opinion, shall be fair and reasonable.  Solely for the purpose of determining the public sale price under this section, if the sale is subject to senior liens or encumbrances, the dollar amount of the senior liens or encumbrances shall be included in the public sale price."

     SECTION 4.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect on July 1, 2050.



Report Title:

Mortgages; Foreclosure; Mediation



Requires foreclosing lenders to notify their mortgagors about credit counseling no later than thirty days prior to foreclosure; if promissory note and mortgage document are requested foreclosure is prohibited until they are provided; sets seventy per cent of fair market value of the property plus any senior liens or encumbrances as the fair and reasonable price for public auction of foreclosed property.  Effective January 1, 2050.  (SD1)




The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.