Hawaii legislators pass new protections for homeowners facing foreclosure

Legislators in Hawaii have passes a new bill that would provide added protections for homeowners facing foreclosure.

In the last legislative session, Governor Neil Abercrombie signed Senate Bill 651 as Act 48, to protect owner-occupants from the predatory tactics of lenders. A legislatively creative body of consumer advocates, professionals in the mortgage industry and those affected by the industry reviewed Act 48 to make changes.

One important change requires that lenders’ legal counsel must sign an affirmation stating that the foreclosure documents are accurate and they have affirmed the bank’s legal standing. This is similar to the way New York State addresses any issues of fraudulent foreclosures.

Numerous homeowners across the states have lost their homes because of default notices that contain inaccuracies. Many of these wrongful foreclosures go unnoticed unless the homeowner has retained a foreclosure attorney to contest the bank.

The task force also suggested that Act 48 allow owner-occupants to convert their non-judicial foreclosure to a judicial foreclosure.

Homeowner and community associations are allowed to establish a separate non-judicial foreclosure and lien collection process.

Foreclosures have hit many communities in Hawaii and around the country hard, affecting home prices and turning homeowners into renters. But not allow people who have fallen behind on their mortgages have to lose their homes. A foreclosure lawyer will suggest other measures to prevent foreclosure such as a short sale, mortgage modification or even a personal bankruptcy.

A troubled homeowner can relief from their debts and possibly keep their home when they get the counsel of a highly-skilled foreclosure attorney to work with the mortgage lender and find an alternative to mortgage loan default.