Bill Text: HI HB1410 | 2011 | Regular Session | Introduced

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Bill Title: Mortgage Foreclosures

Spectrum: Partisan Bill (Democrat 13-0)

Status: (Introduced - Dead) 2011-02-09 - (H) The committee(s) recommends that the measure be deferred. [HB1410 Detail]

Download: Hawaii-2011-HB1410-Introduced.html

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HOUSE OF REPRESENTATIVES	H.B. NO.	1410
TWENTY-SIXTH LEGISLATURE, 2011
STATE OF HAWAII

A BILL FOR AN ACT

 

 

relating to mortgage foreclosures.

 

 

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

 

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

"Part   

2011 non-judicial foreclosure process

     §667-A  Exercise of a power of sale.  (a)  Every transfer of an interest in property, other than in trust, made only as a security for the performance of another act, is to be deemed a mortgage.  Where, by a mortgage created of any estate in real property, a power of sale is conferred upon the mortgagee to be exercised after a breach of the obligation for which that mortgage is a security, the power shall not be exercised until all of the following apply:

     (1)  The mortgagee shall first file in the bureau of conveyances a notice of default. That notice of default shall include all of the following:

         (A)  A statement identifying the mortgage;

         (B)  A statement that a breach of the obligation for which the mortgage is security has occurred; and

         (C)  A statement setting forth the nature of each breach;

     (2)  Not less than three months shall elapse from the filing of the notice of default; and

     (3)  After the lapse of the three months described in paragraph (2), the mortgagee shall give notice of sale, stating the time and place thereof.

     (b)  A recital in the deed executed pursuant to the power of sale of compliance with all requirements of law regarding the mailing of copies of notices or the publication of a copy of the notice of default or the personal delivery of the copy of the notice of default or the posting of copies of the notice of sale or the publication of a copy thereof shall constitute prima facie evidence of compliance with these requirements and conclusive evidence thereof in favor of bona fide purchasers and encumbrancers for value and without notice.

     §667-B  Acceleration; residential real property; declaration.  No clause in any mortgage on residential real property that provides for the acceleration of the due date of the obligation upon the sale or other transfer of the property subject to the mortgage shall be valid unless the clause is set forth in its entirety in the body of the mortgage and the promissory note or other document evidencing the secured obligation.

     §667-C  Acceleration; residential real property; transfers in title.  (a)  A mortgagee may not accelerate the maturity date of the principal and accrued interest on any loan secured by a mortgage on residential real property solely by reason of any one or more of the following transfers in the title to the real property:

     (1)  A transfer resulting from the death of a mortgagor where the transfer is to the spouse who is also a mortgagor;

     (2)  A transfer by a mortgagor where the spouse becomes a co-owner of the property;

     (3)  A transfer resulting from a decree of dissolution of the marriage or legal separation or from a property settlement agreement incidental to a decree that requires the mortgagor to continue to make the loan payments by which a spouse who is a mortgagor becomes the sole owner of the property;

     (4)  A transfer by a mortgagor or mortgagors into an inter vivos trust in which the mortgagor or mortgagors are beneficiaries; or

     (5)  The real property is made subject to a junior encumbrance or lien.

     (b)  Any waiver of this section by a mortgagor is void and unenforceable and is contrary to public policy.

     §667-D  Acceleration; failure to pay taxes, rents, assessments, insurance premiums.  The provisions of any mortgage on real property that authorize any mortgagee to accelerate the maturity date of the principal and interest on any loan secured thereby or to exercise any power of sale or other remedy contained therein upon the failure of the mortgagor to pay, at the times provided for under the terms of the mortgage, any taxes, rents, assessments, or insurance premiums with respect to the property or the loan, or any advances made by the mortgagee shall be enforceable whether or not impairment of the security interest in the property has resulted from the failure of the mortgagor to pay the taxes, rents, assessments, insurance premiums, or advances.

     §667-E  Persons desiring notice of default and notice of sale.  (a)  Any person desiring a copy of any notice of default and of any notice of sale under any mortgage with power of sale upon real property, as to which mortgage the power of sale cannot be exercised until these notices are given for the time and in the manner provided in section 667-A, at any time subsequent to recordation of the mortgage and prior to recordation of notice of default thereunder, may cause to be filed for record in the bureau of conveyances, a duly acknowledged request for a copy of the notice of default and of sale.

     (b)  The mortgagee shall do each of the following:

     (1)  Within ten business days following recordation of the notice of default, mail a copy of the notice of default with the recording date shown thereon, addressed to each person whose name and address are set forth in a duly recorded request therefor, directed to the address designated in the request and to each mortgagor at the mortgagor's last known address if different than the address specified in the mortgage with power of sale;

     (2)  At least twenty days before the date of sale, mail a copy of the notice of sale, addressed to each person whose name and address are set forth in a duly recorded request therefor, directed to the address designated in the request and to each mortgagor at the mortgagor's last known address if different than the address specified in the mortgage with power of sale;

     (3)  Within one month following recordation of the notice of default, mail a copy of the notice of default with the recording date shown thereon, addressed to each person set forth as follows:

         (A)  The successor in interest, as of the recording date of the notice of default, of the interest or any portion thereof of the mortgagor of the mortgage being foreclosed;

         (B)  The mortgagee of any mortgage recorded subsequent to the mortgage being foreclosed, or recorded prior to or concurrently with the mortgage being foreclosed but subject to a recorded agreement or a recorded statement of subordination to the mortgage being foreclosed;

         (C)  The assignee of any interest of the mortgagee described in subparagraph (B), as of the recording date of the notice of default; and

         (D)  The state director of taxation; and

     (4)  At least twenty days before the date of sale, mail a copy of the notice of sale addressed to each person to whom a copy of the notice of default is to be mailed as provided above, and addressed to the state director of taxation.

     (c)  Any mortgage with power of sale hereafter executed upon real property may contain a request that a copy of any notice of default and a copy of any notice of sale thereunder shall be mailed to any person or party thereto at the address of the person given therein, and a copy of any notice of default and of any notice of sale shall be mailed to each of these at the same time and in the same manner required as though a separate request therefor had been filed by each of these persons as herein authorized.  If any mortgage with power of sale does not contain a mailing address of the mortgagor therein named, and if no request for special notice by the mortgagor in substantially the form set forth in this section has subsequently been recorded, a copy of the notice of default shall be published once a week for at least four weeks in a newspaper of general circulation in the county in which the property is situated, the publication to commence within ten business days after the filing of the notice of default. In lieu of publication, a copy of the notice of default may be delivered personally to the mortgagor within the ten business days or at any time before publication is completed, or by posting the notice of default in a conspicuous place on the property and mailing the notice to the last known address of the mortgagor.

     §667-F  Default; cure; reinstatement.  (a)  Whenever all or a portion of the principal sum of any obligation secured by mortgage on real property hereafter executed has, prior to the maturity date fixed in that obligation, become due in payment of interest or of any installment of principal, or by reason of failure of mortgagor to pay, in accordance with the terms of that obligation or of the mortgage, taxes, assessments, premiums for insurance, or advances made by mortgagee in accordance with the terms of that obligation or of the mortgage, the mortgagor in the mortgaged property or any other person having a subordinate lien or encumbrance of record thereon, at any time within the period specified in subsection (b), if the power of sale therein is to be exercised, or, otherwise at any time prior to entry of the decree of foreclosure, may pay to the mortgagee the entire amount due, at the time payment is tendered, with respect to:

         (A)  All amounts of principal, interest, taxes, assessments, insurance premiums, or advances actually known to be in default;

         (B)  All amounts in default on recurring obligations not shown in the notice of default; and

         (C)  All reasonable costs and expenses, which are actually incurred in enforcing the terms of the mortgage, and attorney's fees, other than the portion of principal as would not then be due had no default occurred; and

thereby cure the default theretofore existing, and thereupon, all proceedings theretofore had or instituted shall be dismissed or discontinued and the obligation and mortgage shall be reinstated and shall be and remain in force and effect, the same as if the acceleration had not occurred.

     (b)  Reinstatement of a monetary default under the terms of an obligation secured by a mortgage may be made at any time within the period commencing with the date of recordation of the notice of default until five business days prior to the date of sale set forth in the initial recorded notice of sale.

     If the sale does not take place on the date set forth in the initial recorded notice of sale or a subsequent recorded notice of sale is required to be given, the right of reinstatement shall be revived as of the date of recordation of the subsequent notice of sale, and shall continue from that date until five business days prior to the date of sale set forth in the subsequently recorded notice of sale.

     If the date of sale is postponed on the date of sale set forth in either an initial or any subsequent notice of sale, or is postponed on the date declared for sale at an immediately preceding postponement of sale, and, the postponement is for a period which exceeds five business days from the date set forth in the notice of sale, or declared at the time of postponement, then the right of reinstatement is revived as of the date of postponement and shall continue from that date until five business days prior to the date of sale declared at the time of the postponement.  Nothing contained herein shall give rise to a right of reinstatement during the period of five business days prior to the date of sale, whether the date of sale is noticed in a notice of sale or declared at a postponement of sale.

     (c)  Pursuant to the terms of this section, no mortgagee shall be liable in any manner to a mortgagor or any other person having a subordinate lien or encumbrance of record thereon for the failure to allow a reinstatement of the obligation secured by a mortgage during the period of five business days prior to the sale of the security property, and no such right of reinstatement during this period is created by this section.  Any right of reinstatement created by this section is terminated five business days prior to the date of sale set forth in the initial date of sale, and is revived only as prescribed herein and only as of the date set forth herein.

     §667-G  Mortgagee's recoupment of costs and expenses prior to foreclosure sale.  Commencing with the date that the notice of sale is deposited in the mail and until the property is sold pursuant to the power of sale contained in the mortgage, a mortgagee may demand and receive from a mortgagor or any other person having a subordinate lien or encumbrance of record those reasonable costs and expenses, which are actually incurred in enforcing the terms of the obligation.

     §667-H  Junior mortgagee's right to information from senior mortgagee; residential real property.  (a)  The mortgagee of any mortgage on residential real property may, with the written consent of the mortgagor submit a written request to the mortgagee of any lien which is senior to the lien of the requesting mortgagee, for written notice of any or all delinquencies of four months or more, in payments of principal or interest on any obligation secured by that senior lien notwithstanding that the loan secured by the lien of the requester is not then in default as to payments of principal or interest.  The request shall be sent to the mortgagee at the address specified for the receipt of these payments, if known, or, if not known, at the address shown on the recorded mortgage.

     (b)  The request for notice shall identify:

     (1)  The ownership or security interest of the requester;

     (2)  The date on which the interest of the requester will terminate as evidenced by the maturity date of the note of the mortgagor in favor of the requester;

     (3)  The name of the mortgagor and the name of the current owner of the security property if different from the mortgagor;

     (4)  The street address or other description of the security property, the loan number of the loan secured by the senior lien; and

     (5)  The name and address to which notice is to be sent.

     The request shall remain valid until withdrawn in writing and shall be applicable to all delinquencies as provided in this section that occur prior to the date on which the interest of the requester will terminate as specified in the request or the expiration date, as appropriate.  A request for notice shall be effective for five years from the mailing of the request or the recording of that request, whichever occurs later, and may be renewed within six months prior to its expiration date by sending the beneficiary or mortgagee, or agent, as the case may be, at the address to which original requests for notice are to be sent, and a copy of the earlier request for notice together with a signed statement that the request is renewed.  Upon timely submittal of a renewal request for notice, the effectiveness of the original request shall be continued for five years from the time when it would otherwise have lapsed. Succeeding renewal requests may be submitted in the same manner.

     (c)  Unless the delinquency has been cured, within fifteen days following the end of four months from any delinquency in payments of principal or interest on any obligation secured by the senior lien which delinquency exists or occurs on or after ten days from the mailing of the request for notice or the recording of that request, whichever occurs later, the mortgagee shall give written notice to the requester of the fact of any delinquency and the amount thereof.  Following the recording of any notice of default pursuant to section 667-A with respect to the same delinquency, no notice or further notice shall be required pursuant to this section.

     (d)  If the mortgagee of any such senior lien fails to give notice to the requester as required in subsection (c), and a subsequent foreclosure occurs, the mortgagee shall be liable to the requester for any monetary damage due to the failure to provide notice within the time period specified in subsection (c) which the requester has sustained from the date on which notice should have been given to the earlier of the date on which the notice is given or the date of the recording of the notice of default under section 667-A.

     (e)  Any failure to comply with this section shall not affect the validity of a sale in favor of a bona fide purchaser or the rights of an encumbrancer for value and without notice.

     (f)  Upon satisfaction of an obligation secured by a junior lien with respect to which a notice request was made pursuant to this section, the mortgagee that made the request shall communicate that fact in writing to the senior lienholder to whom the request was made.  The communication shall specify that provision of notice pursuant to the prior request under this section is no longer required.

     §667-I  Posting and publication of notice of sale; highest offer.  (a)  Before any sale of property can be made under the power of sale contained in any mortgage, notice of the sale thereof shall accurately describe the location and whereabouts of the property and shall be given by:

     (1)  Posting a written notice of the time of sale, the street address, and the specific place at the street address where the sale will be held, and describing the property to be sold, at least twenty days before the date of sale in one public place in the county where the property is to be sold;

     (2)  Publishing a copy once a week for three consecutive calendar weeks, the first publication to be at least twenty days before the date of sale, in a newspaper of general circulation published in the county in which the property is situated;

     (3)  Posting a copy of the notice of sale in a conspicuous place on the property to be sold at least twenty days before the date of sale; and

     (4)  Recording the notice of sale with the bureau of conveyances at least fourteen days prior to the date of sale.

     (b)  All sales of real property pursuant to a power of sale contained in any mortgage shall be held in the county where the residence is located and shall be made to the person making the highest offer.  The mortgagee may receive offers during the ten-day period immediately prior to the date of sale and if any offer is accepted in writing by both the mortgagor and mortgagee prior to the time set for sale, the sale shall be postponed to a date certain and prior to which the property may be conveyed to the person making the offer according to its terms.  The offer shall be revocable until accepted.  The performance of the offer, following acceptance, according to its terms, by a conveyance of the property to the offeror, shall operate to terminate any further proceeding under the notice of sale and it shall be deemed revoked.

     §667-J  Time and location for sale; postponements.  (a)  All sales of real property under the power of sale contained in any mortgage shall be held in the county where the real property is situated, and shall be made at auction, to the highest bidder, between the hours of 9 a.m. and 5 p.m. on any business day, Monday through Friday.

     The sale shall commence at the time and location specified in the notice of sale.  Any postponement shall be announced at the time and location specified in the notice of sale for commencement of the sale or pursuant to subsection (c).

     (b)  When the real property consists of several known lots or parcels, they shall be sold separately unless the mortgage provides otherwise.  When a portion of the real property is claimed by a third person, who requires it to be sold separately, the portion subject to the claim may be thus sold.  After sufficient real property has been sold to satisfy the indebtedness, no more can be sold.  If the real property under power of sale is in two or more counties, the public auction sale of all of the real property under the power of sale may take place in any one of the counties where the real property is located.

     (c)  There may be a postponement or postponements of the sale proceedings at any time prior to the completion of the sale for any period of time not to exceed a total of three hundred sixty-five days from the date set forth in the notice of sale. The mortgagee shall postpone the sale in accordance with any of the following:

     (1)  Upon the order of any court of competent jurisdiction;

     (2)  If stayed by operation of law;

     (3)  By mutual agreement between the mortgagor and the mortgagee.

     (d)  The notice of each postponement and the reason therefor shall be given by public declaration by the mortgagee at the time and place last appointed for sale.  A public declaration of postponement shall also set forth the new date, time, and place of sale and the place of sale shall be the same place as originally fixed by the mortgagee for the sale.  No other notice of postponement need be given; provided that the sale shall be conducted no sooner than on the seventh day after the earlier of:

     (1)  Dismissal of the action; or

     (2)  Expiration or termination of the injunction, restraining order, or stay that required postponement of the sale, whether by entry of an order by a court of competent jurisdiction, operation of law, or otherwise, unless the injunction, restraining order, or subsequent order expressly directs the conduct of the sale within that seven-day period.

     (e)  Notwithstanding the time periods established under subsection (d), if postponement of a sale is based on a stay imposed by title 11 of the United States Code, the sale shall be conducted no sooner than the expiration of the stay imposed by that title and the seven-day provision of subsection (d) shall not apply.

     §667-K  Irrevocable bids.  (a)  Each and every bid made by a bidder at a foreclosure sale under a power of sale contained in a mortgage shall be deemed to be an irrevocable offer by that bidder to purchase the property being sold under the power of sale for the amount of the bid.  Any second or subsequent bid by the same bidder or any other bidder for a higher amount shall be a cancellation of the prior bid.

     (b)  At the foreclosure sale the mortgagee shall have the right:

     (1)  To require every bidder to show evidence of the bidder's ability to pay the full amount of the bidder's final bid in cash or check prior to, and as a condition to, the recognizing of the bid, and to conditionally accept and hold these amounts for the duration of the sale; and

     (2)  To require the last and highest bidder to deposit, if not deposited previously, the full amount of the bidder's final bid in cash or check immediately prior to the completion of the sale, the completion of the sale being so announced by the fall of the hammer or in another customary manner.

     (c)  If the mortgagee has not required the last and highest bidder to deposit the cash or check in the manner set forth in subsection (b)(2), the mortgagee shall complete the sale.  If the last and highest bidder then fails to deliver to the mortgagee, when demanded, the amount of the final bid in cash or check, that bidder shall be liable to the mortgagee for all damages that the mortgagee may sustain by the refusal to deliver to the mortgagee the amount of the final bid, including any court costs and reasonable attorney's fees. If the last and highest bidder wilfully fails to deliver to the mortgagee the amount of the final bid in cash or check, that bidder shall be guilty of a misdemeanor punishable by a fine of not more than $2,500.

     (d)  Any postponement or discontinuance of the sale proceedings shall be a cancellation of the last bid.

     (e)  If this section conflicts with any other statute, then this section shall prevail.

     (f)  It shall be unlawful for any person, acting alone or in concert with others:

     (1)  To offer to accept or accept from another, any consideration of any type not to bid; or

     (2)  To fix or restrain bidding in any manner, at a sale of property conducted pursuant to a power of sale in a mortgage; provided that it shall not be unlawful for any person to state that a property subject to a recorded notice of default or subject to a sale conducted pursuant to this chapter is being sold in an "as-is" condition.

In addition to any other remedies, any person committing any act declared unlawful by this subsection or any act that would operate as a fraud or deceit upon any mortgagor or junior lienor shall, upon conviction, be fined not more than $10,000 or imprisoned for not more than one year, or both.

     §667-L  Residential property; balloon payment loan.  (a)  This section applies to loans secured by a mortgage on real property containing one to four residential units, at least one of which at the time the loan is made is or is to be occupied by the borrower if the loan is for a period in excess of one year and is a balloon payment loan.

     (b)  At least ninety days but not more than one hundred and fifty days prior to the due date of the final payment on a loan that is subject to this section, the mortgagee shall mail to the mortgagor, at the last known address of that person, a written notice that shall include all of the following:

     (1)  A statement of the name and address of the person to whom the final payment is required to be paid;

     (2)  The date on or before which the final payment is required to be paid;

     (3)  The amount of the final payment, or if the exact amount is unknown, a good faith estimate of the amount thereof, including unpaid principal, interest and any other charges, such amount to be determined assuming timely payment in full of all scheduled installments coming due between the date the notice is prepared and the date when the final payment is due;

     (4)  If the borrower has a contractual right to refinance the final payment, a statement to that effect.

If the due date of the final payment of a loan subject to this section is extended prior to the time notice is otherwise required under this subsection, this notice requirement shall apply only to the due date as extended.

     (c)  Failure to provide notice as required by subsection (b) does not extinguish any obligation of payment by the borrower, except that the due date for any balloon payment shall be the date specified in the balloon payment note, or ninety days from the date of delivery or mailing of the notice required by subsection (b), or the due date specified in the notice required by subsection (b), whichever date is later.  If the operation of this section acts to extend the term of any note, interest shall continue to accrue for the extended term at the contract rate and payments shall continue to be due at any periodic interval and on any payment schedule specified in the note and shall be credited to principal or interest under the terms of the note.  Default in any extended periodic payment shall be considered a default under terms of the note or security instrument.

     (d)  The validity of any credit document or of any security document subject to this section shall not be invalidated solely because of the failure of any person to comply with this section; provided that any person who wilfully violates this section shall be liable in the amount of actual damages suffered by the debtor as the proximate result of the violation, and, if the debtor prevails in any suit to recover that amount, for reasonable attorney's fees.

     (e)  No person may be held liable in any action under this section if it is shown by a preponderance of the evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid any such error.

     (f)  For purposes of this section:

     A "balloon payment loan" is a loan that provides for a final payment as originally scheduled that is more than twice the amount of any of the immediately preceding six regularly scheduled payments or that contains a call provision; provided, however, that if the call provision is not exercised by the holder of the loan, the existence of the unexercised call provision shall not cause the loan to be deemed to be a balloon payment loan.

     "Call provision" means a loan contract term that provides the holder of the loan with the right to call the loan due and payable either after a specified period has elapsed following closing or after a specified date.

     §667-M  Notice of proceed upon the sale.  (a)  Within thirty days of the execution of the deed resulting from a foreclosure sale in which there are proceeds remaining after payment of the amounts required by section 667-N, the mortgagee shall send written notice to all persons with recorded interests in the real property as of the date immediately prior to the foreclosure sale who would be entitled to notice pursuant to section 667-E.  The notice shall be sent mail in the manner provided in section 667-E and inform each entitled person of each of the following:

     (1)  That there has been a foreclosure sale of the described real property;

     (2)  That the noticed person may have a claim to all or a portion of the sale proceeds remaining after payment of the amounts required by section 667-N;

     (3)  The noticed person may contact the mortgagee at the address provided in the notice to pursue any potential claim; and

     (4)  That before the mortgagee can act, the noticed person may be required to present proof that the person a claim to all or a portion of the sale proceeds remaining after payment of the amounts required by section 667-N.

     (b)  The mortgagee shall exercise due diligence to determine the priority of the written claims received by the mortgagee to the foreclosure sale surplus proceeds from those persons to whom notice was sent pursuant to subsection (a).  Proceeds shall be paid within thirty days after the conclusion of the notice period.

     §667-N  Priority of distribution of proceeds.  (a)  The mortgagee shall distribute the proceeds, or a portion of the proceeds, as the case may be, of the foreclosure sale in the following order of priority:

     (1)  To the costs and expenses of exercising the power of sale and of sale, including the payment of the mortgagee's fees and attorney's fees;

     (2)  To the payment of the obligations secured by the mortgage which is the subject of the foreclosure sale;

     (3)  To satisfy the outstanding balance of obligations secured by any junior liens or encumbrances in the order of their priority; and

     (4)  To the mortgagor.

     (b)  A mortgagee may charge costs and expenses incurred for items such as mailing and a reasonable fee for services rendered in connection with the distribution of the proceeds from a foreclosure sale, including, but not limited to, the investigation of priority and validity of claims and the disbursement of funds."

     SECTION 2.  Section 667-5, Hawaii Revised Statutes, is repealed.

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

     SECTION 3.  Section 667-5.5, Hawaii Revised Statutes, is repealed.

     ["§667-5.5  Foreclosure notice.  Notwithstanding any law or agreement to the contrary, any person who forecloses on a property within a planned community, a condominium apartment or unit, or an apartment in a cooperative housing project shall notify, by way of registered or certified mail, the board of directors of the planned community association, the association of owners of the condominium project, or the cooperative housing project in which the property to be foreclosed is located, of the foreclosure at the time foreclosure proceedings are begun.  The notice, at a minimum, shall identify the property, condominium apartment or unit, or cooperative apartment which is the subject of the foreclosure and identify the name or names of the person or persons bringing foreclosure proceedings.  This section shall not apply when the planned community association, condominium association of owners, or cooperative housing corporation is a party in a foreclosure action.  This section shall not affect civil proceedings against parties other than the planned community association, association of owners, or cooperative housing corporation."]

     SECTION 4.  Section 667-5.7, Hawaii Revised Statutes, is repealed.

     ["[§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."]

     SECTION 5.  Section 667-6, Hawaii Revised Statutes, is repealed.

     ["§667-6  Notice to mortgage creditors.  Whenever a mortgage creditor having a mortgage lien on certain premises desires notice that another mortgage creditor having a mortgage lien on the same premises intends to foreclose the mortgage and sell the mortgaged property pursuant to a power of sale under section 667-5, the mortgage creditor may submit a written request to the mortgagee foreclosing or who may foreclose the mortgage by power of sale, to receive notice of the mortgagee's intention to foreclose the mortgage under power of sale.  This request for notice may be submitted any time after the recordation or filing of the subject mortgage at the bureau of conveyances or the land court, but must be submitted prior to the completion of the publication of the mortgagee's notice of intention to foreclose the mortgage and of the sale of the mortgaged property.  This request shall be signed by the mortgage creditor, or its authorized representative, desiring to receive notice, specifying the name and address of the person to whom the notice is to be mailed.  The mortgagee receiving the request shall thereafter give notice to all mortgage creditors who have timely submitted their request.  The notice shall be sent by mail or otherwise communicated to the mortgage creditors, not less than seven calendar days prior to the date of sale.

     No request for copy of any notice pursuant to this section nor any statement or allegation in any such request nor any record thereof shall affect the title to real property or be deemed notice to any person that any party requesting copy of the notice has or claims any right, title, or interest in, or lien or charge upon the property described in the mortgage referred to therein."]

     SECTION 6.  Section 667-7, Hawaii Revised Statutes, is repealed.

     ["§667-7  Notice, contents; affidavit.  (a)  The notice of intention of foreclosure shall contain:

     (1)  A description of the mortgaged property; and

     (2)  A statement of the time and place proposed for the sale thereof at any time after the expiration of four weeks from the date when first advertised.

     (b)  The affidavit described under section 667-5 may lawfully be made by any person duly authorized to act for the mortgagee, and in such capacity conducting the foreclosure."]

     SECTION 7.  Section 667-8, Hawaii Revised Statutes, is repealed.

     ["§667-8  Affidavit as evidence, when.  If it appears by the affidavit that the affiant has in all respects complied with the requirements of the power of sale and the statute, in relation to all things to be done by the affiant before selling the property, and has sold the same in the manner required by the power, the affidavit, or a duly certified copy of the record thereof, shall be admitted as evidence that the power of sale was duly executed."]

     SECTION 8.  Section 667-9, Hawaii Revised Statutes, is repealed.

     ["§667-9  Dower barred, when.  If the mortgage was executed by a man having at the time no lawful wife, or if the mortgagor being married, his wife joined in the deed in token of her release of dower, the sale of the property in the mode aforesaid shall be effectual to bar all claim and possibility of dower in the property."]

     SECTION 9.  Section 667-10, Hawaii Revised Statutes, is repealed.

     ["§667-10  Power unaffected by transfer; surplus after sale.  No sale or transfer by the mortgagor shall impair or annul any right or power of attorney given in the mortgage to the mortgagee to sell or transfer the mortgaged property, as attorney or agent of the mortgagor, except as otherwise provided by chapters 501 and 502.  When public sale is made of the mortgaged property under this chapter, the remainder of the proceeds, if any, shall be paid over to the owner of the mortgaged property, after deducting the amount of claim and all expenses attending the same."]

     SECTION 10.  Chapter 667, part II, Hawaii Revised Statutes, is repealed.

     SECTION 11.  This Act shall apply to new mortgages, loans, agreements, and contracts containing power of sale foreclosure language executed by the borrowers or mortgagors after July 1, 2012.

     SECTION 12.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 13.  In codifying the new sections added by section 1 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

     SECTION 14.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 15.  This Act shall take effect upon its approval.

 

INTRODUCED BY:	_____________________________

 

 

Report Title:

Mortgage Foreclosures

 

Description:

Repeals the regular and alternate non-judicial foreclosure processes.  Implements a new non-judicial foreclosure process based upon the California deed of trust system.

 

 

 

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