Homeowners in Hawaii Facing Foreclosure
Homeowners in Hawaii facing foreclosure would now be able to directly meet lenders as a result of wide revamping of the foreclosure laws of the state; the bill is nearing the stage of final approval.
The bill running into 102 pages will set in motion a process that will help modification of loans from next October. The owners who are also occupants would have the alternative to change the non-judicial status of the foreclosure to a court monitored one. The step has been shaped on a similar framework that has been used in Nevada – one of the worst foreclosure ridden states in the country.
Kealii Lopez of Department of Commerce and Consumer Affairs (director) said, “More people will be able to enter into loan modifications and will be allowed to stay in their homes”.
The bill includes clauses for protection of consumers. The target is to stop the servicing firms from forcing foreclosures without giving the borrowers a chance to contest it observed Senator Roz Baker, chairperson of the Commerce and Consumer Protection Committee.
The owners would be allowed to stay on in their houses and lenders will get paid following a successful resolving of the dispute. Baker (Democrat/Honokohau-Makena) said, “It gives them an opportunity for a face-to-face discussion on either modifying their loan or working out some other payment plan. Even if this process only helps a few hundred or a few thousand people, it’s worth it”.
In last year 12,425 estates in Hawaii were in foreclosure but till now the current year has seen a decline according to RealtyTrac. Hawaii ranked 16th in foreclosure numbers in the country.
Those opposing the bill said that the it would cause new purchasers of homes to pay bigger down payments and face stricter conditions for taking loans if the lenders have to wait for longer periods to recover the money they have advanced for house loans.
Gary Fujitani of Hawaii Bankers Association (executive director) said, “The intent is to help a few people, but unfortunately it’s going to be at the expense of future borrowers. It just adds unnecessary time for us to collect loans”. He also cautioned that those who were defaulting will find it difficult to become current once the foreclosure process starts.
But housing advocates are arguing that as per the bill the borrowers would first sit down with a counselor and without showing their income they would not be able to proceed with mediation talks.
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