H.B. NO.



















     SECTION 1.  Section 480E-2, Hawaii Revised Statutes, is amended by amending the definition of "distressed property consultant" to read as follows:

     ""Distressed property consultant" means any person who performs or provides, or attempts to perform or provide, or who arranges for others to perform or provide, or who assists others to perform or provide, or who makes any solicitation, representation, or offer to perform or provide, any of the following relating to a distressed property:

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

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

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

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

     (8)  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)  Save the owner's residence from foreclosure or loss of home due to nonpayment of taxes.

     "Distressed property consultant" shall not include any of the following:

     (1)  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)  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)  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)  [Licensed attorneys] Attorneys licensed in the State of Hawaii engaged in the practice of law;

     (5)  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)  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)  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)[]]    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 2.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 3.  This Act shall take effect upon its approval.








Report Title:

Mortgage Rescue Fraud Prevention; Distressed Property Consultant; Attorney Exception



Clarifies definition of "distressed property consultant" and specifies that attorneys must be licensed by, and engaged in the practice of law in, the State of Hawaii in order to fall within the class of exceptions to the definition of "distressed property consultant".




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