HOUSE OF REPRESENTATIVES

H.B. NO.

218

TWENTY-NINTH LEGISLATURE, 2017

H.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO FORECLOSURES.

 

 

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

 


SECTION 1. The legislature finds that the Hawaii Revised Statutes require a foreclosing mortgagee or association to publish a public notice of a public sale of a mortgaged property. The law grants the mortgagee or association the option of publishing the notice either:

(1) Three times in a newspaper; or

(2) On a state website and once in a newspaper.

However, the State also finds that while an increasing number of individuals have access to the Internet, not everyone has immediate access. These individuals sometimes miss the publication of a notice when it is posted on a state website and published only once in a newspaper.

The legislature also finds that while publication in a newspaper is helpful, many people neither read the newspaper nor the legal notice section of the newspaper regarding nonjudicial foreclosure actions, and this kind of notice may be insufficient to provide adequate consumer protections. The legislature finds that revising posting requirements for nonjudicial foreclosures to include posting of a notice of foreclosure action in a conspicuous place at the property in question will help to bolster consumer protections in these instances.

The purpose of this Act is to enhance the transparency of the foreclosure process by requiring every public notice of a public sale to be published three times in a newspaper or posted on a state website and in a conspicuous location on the mortgaged property, even if notice was posted in the newspaper or on a state website.

SECTION 2. 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 and intention to foreclose addressed to the mortgagor, the borrower, and any guarantor. The notice of default and intention to foreclose shall state:

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

(2) The name and last known address of the mortgagors, the borrowers, and any guarantors;

(3) With respect to the mortgaged property, the address or a description of its location, tax map key number, and certificate of title or transfer certificate of title number if registered in the land court;

(4) The description of the default or, if the default is a monetary default, an itemization of the delinquent amount;

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

(6) The date by which the default must be cured, which shall be at least sixty days after the date of the notice of default and intention to foreclose;

(7) A statement that if the default is not cured by the deadline date stated in the notice of default and intention to foreclose, the entire unpaid balance of the moneys owed to the mortgagee under the mortgage agreement will become 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;

(8) A statement that if the default is not cured by the deadline date stated in the notice of default and intention to foreclose, the mortgagee [may] shall publish the public notice of the public sale in a newspaper of general circulation or on a state website, pursuant to section 667-27(d), and in a conspicuous location on the mortgaged property;

(9) The name, address, 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; and

(10) Notice of the right of the owner-occupant to elect to participate in any other process as established by law."

SECTION 3. Section 667-27, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) The foreclosing mortgagee shall have the public notice of the public sale:

(1) Printed in not less than seven-point font and published in the classified section of a newspaper that is published at least weekly and having a general circulation in the county in which the mortgaged property is located. The public notice shall be published once each week for three consecutive weeks, constituting 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; or

(2) Not less than twenty-eight days before the date of the public sale, published on a state website at the discretion of the agency that maintains the website; provided that:

(A) If the mortgaged property is owned by an owner-occupant, the public notice shall be published on a website maintained by the department. The department shall publish the public notice pursuant to this subparagraph upon satisfaction of the filing requirements of section 667-76(b); and

(B) The public notice shall be published at least once in the format described in paragraph (1) at least fourteen days prior to the public sale.

In addition to paragraphs (1) or (2), the public notice of the public sale shall be posted in a conspicuous location on the mortgaged property no less than twenty-eight days before the date of the public sale."

SECTION 4. Section 667-76, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) A mortgagee who elects to publish a public notice of public sale electronically pursuant to section [667-27(d)(2)(A)] 667-27(d)(2) shall publish the notice by filing the same with the department and paying a filing fee of $300, which shall be deposited into the mortgage foreclosure dispute resolution special fund established under section 667-86."

SECTION 5. Section 667-92, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) When a unit owner has failed to pay an assessment, and when the association intends to conduct a power of sale foreclosure under this part, the association shall prepare a written notice of default and intention to foreclose addressed to the unit owner. The notice of default and intention to foreclose shall state:

(1) The name and address of the association;

(2) The name and last known address of the unit owners;

(3) With respect to the unit, the address or a description of its location, tax map key number, and certificate of title or transfer certificate of title number if registered in the land court;

(4) The description of the default or, if the default is a monetary default, an itemization of the delinquent amount;

(5) The action required to cure the default, including the delinquent amount and the estimated amount of the association's attorney's fees and costs, and all other fees and costs related to the default estimated to be incurred by the association by the deadline date;

(6) The date by which the default must be cured, which shall be within sixty days after service of the notice of default and intention to foreclose;

(7) A statement that if the default is not cured by the deadline date stated in the notice of default and intention to foreclose, the entire unpaid balance of the moneys owed to the association will become due, that the association intends to conduct a power of sale foreclosure to sell the unit at a public sale without any court action and without going to court, and that the association or any other person may acquire the unit at the public sale;

(8) A statement that if the default is not cured by the deadline date stated in the notice of default and intention to foreclose, the association [may] shall publish the public notice of the public sale in a newspaper of general circulation or on a state website, pursuant to section 667-96(d) and in a conspicuous location on the unit;

(9) The name, address, electronic address, and telephone number of the attorney who is representing the association; provided that the attorney shall be licensed to practice law in the State and physically located in the State; and

(10) Notice of the right of the unit owner to submit a payment plan within thirty days pursuant to subsection (c)."

SECTION 6. Section 667-96, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) The association shall have the public notice of the public sale:

(1) Printed in not less than seven-point font and published in the classified section of a newspaper that is published at least weekly and having a general circulation in the county in which the unit is located. The public notice shall be published once each week for three consecutive weeks, constituting 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; or

(2) Not less than twenty-eight days before the date of the public sale, published on a state website at the discretion of the agency that maintains the website; provided that the public notice shall be published at least once in the format described in paragraph (1) at least fourteen days prior to the public sale.

In addition to paragraphs (1) or (2), the public notice of the public sale shall be posted in a conspicuous location on the mortgaged property no less than twenty-eight days before the date of the public sale."

SECTION 7. Section 667-97, Hawaii Revised Statutes, is amended to read as follows:

"[[]667-97[]] Postponement, cancellation of sale. (a) The public sale may be either postponed or canceled by the association. Notice of the postponement or the cancellation of the public sale shall be:

(1) Announced by the association at the date, time, and place of the last scheduled public sale; and

(2) Provided to any other person who is entitled to receive the notice of default under section 667-92.

(b) If there is a postponement of the public sale of the unit, the association shall have a new public notice of the public sale [shall be] published [once in the format] and follow all of the public notice of public sale publication requirements described in section [667-96.] 667-96(d). 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. Not less than fourteen days before the date of the public sale, a copy of the new public notice shall be posted on the unit or on another real property of which the unit is a part, and it shall be mailed or delivered to the unit owner and to any other person entitled to receive notice under section 667-92(e).

(c) Upon the fourth postponement of every series of four consecutive postponements, the association shall follow all of the public notice of public sale requirements of section 667-96, including the requirements of mailing and posting under section 667-96(c) and of publication under section 667-96(d).

(d) The default under the association documents may be cured no later than three business days before the date of the public sale of the unit by paying the entire amount that would be owed to the association if the payments under the association documents had not been accelerated, plus the association's attorney's fees and costs, and all other fees and costs incurred by the association related to the default, unless otherwise agreed to between the association and the unit owner. 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 8. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 10. This Act shall take effect on July 1, 2112.


 


 

Report Title:

Foreclosure; Public Notice; Public Sale; Newspapers; Internet

 

Description:

Requires every public notice of a public sale of mortgaged property to be published three times in a newspaper, on a state website, and in a conspicuous location on the mortgaged property or unit. (HB218 HD1)

 

 

 

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