S.B. 2428 Summary

• Repeals Part I of Chapter 667, HRS, eliminating the judicial foreclosure by action and the original power of sale foreclosure process.

• Establishes Part II as the sole nonjudicial power of sale foreclosure process, requiring foreclosing mortgagees to be federally insured banks, credit unions, or other qualifying institutional lenders.

• Allows owner-occupants of residential property to convert nonjudicial foreclosures to judicial foreclosures within 30 days of receiving notice, with automatic stay of the nonjudicial process upon filing.

• Requires foreclosing mortgagees to participate in mandatory mortgage foreclosure dispute resolution at the election of owner-occupants to attempt avoiding foreclosure or mitigating damages.

• Prohibits deficiency judgments in nonjudicial foreclosures of residential property unless the debt is secured by other collateral, though deficiency judgments remain available if the case is converted to judicial foreclosure.