Representative Gil Riviere addresses H.B. No. 1875 – Mortgage Foreclosures


Despite the attempts at reform, the recommendations still give defaulting homeowners 6 months to avoid a judicial sale; this is too long. The provisions regarding AOAOs unfairly penalize them. The AOAO should not be treated as a lender; rather, they are innocent victims. AOAOs were not involved in the original mortgage loan terms. Because the bill would allow defaulting homeowners to stay in their homes for 6 months before foreclosure, the AOAO has to wait a long time to get any financial relief. AOAOs are among the most patient and forgiving creditors, yet they need a way to get the property immediately rented out to “stop the bleeding” caused by delinquent payment of association fees. The bill poses a constitutional challenge because it impairs the performance of contracts. AOAOs and planned community associations have many responsibilities, including maintenance of common roads, sewers, etc. This bill would take away their ability to collect fines and late fees. The bill’s foreclosure notice provisions (“daily” publication in print media) may have unintended consequences: the cost of giving notice in print publications has become sky-high — as much as $3,500 to $4,000.

Contact: repriviere@capitol.hawaii.gov

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