STAND. COM. REP. NO.  1003


Honolulu, Hawaii

                , 2015


RE:   S.B. No. 1093

      S.D. 2





Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Eighth State Legislature

Regular Session of 2015

State of Hawaii




     Your Committees on Consumer Protection & Commerce and Judiciary, to which was referred S.B. No. 1093, S.D. 2, entitled:




beg leave to report as follows:


     The purpose of this measure is to increase protections for individuals making payments on a residential mortgage.


     Specifically, this measure enhances consumer protections of the mortgage servicers law by establishing or increasing mortgage servicer requirements regarding:


     (1)  Loss mitigation options, including loan modifications, to avoid consumer foreclosure;


     (2)  Contact information;


     (3)  Licensing;


     (4)  Surety bonds;


     (5)  Duty of good faith and fair dealing;


     (6)  Handling and processing of mortgage payments;


     (7)  Escrows for the payment of taxes and insurance;


     (8)  Statements of accounts;


     (9)  Payment reminders and statements sent to consumers;


    (10)  Handling of consumer complaints and inquiries;


    (11)  Fees;


    (12)  Record keeping;


    (13)  Disclosures to the borrower upon assignment of servicing rights; and


    (14)  Prohibited activities.


     Your Committees received testimony in support of this measure from the Department of Commerce and Consumer Affairs.


     Your Committees find that the majority of consumer complaints in Hawaii involving mortgages relate to mortgage servicing issues.  For the twenty-five month period ending January 31, 2015, nearly all of the five hundred sixteen mortgage complaints lodged with the Consumer Financial Protection Bureau complaint database by Hawaii consumers concerned loan servicing issues.  Your Committees believe that this measure provides specific enhanced standards for mortgage servicer businesses that will not only increase consumer protection, but will also require non-bank mortgage servicers to meet the same servicing standards required of the more heavily regulated bank mortgage servicers.


     As affirmed by the records of votes of the members of your Committees on Consumer Protection & Commerce and Judiciary that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1093, S.D. 2, and recommend that it pass Second Reading and be referred to the Committee on Finance.



Respectfully submitted on behalf of the members of the Committees on Consumer Protection & Commerce and Judiciary,