HB 1411 - Mortgage Foreclosures Summary

• Allows owner-occupants of residential properties to convert nonjudicial (power of sale) foreclosures to judicial foreclosures within 20 days of receiving notice, subject to court approval and all obligors agreeing to submit to judicial process within 90 days.

• Establishes mandatory dispute resolution process through the center for alternative dispute resolution, allowing mortgagors of primary residences to negotiate with lenders to avoid foreclosure or mitigate damages before sale proceeds, with foreclosure proceedings stayed during the process.

• Prohibits foreclosing mortgagees from pursuing deficiency judgments after nonjudicial foreclosure against owner-occupants who do not own other real property; requires all foreclosure sales to be held only at designated state facilities by county.

• Imposes new requirements on mortgage servicers including maintaining a physical office in Hawaii (for servicers with 20% or greater market share), licensing compliance, and filing detailed affiliate statements identifying authority to conduct foreclosure activities.

• Establishes a foreclosure dispute resolution special fund financed by fees on foreclosure filings and dispute resolution services to support the dispute resolution program, with effective date of July 1, 2050.