Bill Calling for Moratorium on Mortgage Foreclosures AdvancesFebruary 3, 2011, 3:45 PM HST · Updated February 3, 3:45 PM 0 Comments
By Wendy Osher
State lawmakers today advanced a bill that calls for a moratorium on foreclosures pending a national investigation on securitization.
Representative Mele Carroll of Maui who joined in introducing the bill, said it will provide some “breathing room” for homeowners facing foreclosure to stay in their homes and work out a viable solution with their mortgage company. Options, she said, could include mediation, loan modifications, negotiations, or a forgiveness process.
House Bill 894 (HD1) passed out of the Joint House Committees on Consumer Protection and Commerce and the Judiciary on Wednesday. The amended version of the bill calls for an immediate 5 month moratorium on both pending and new non-judicial foreclosures.
“There have been too many questionable foreclosures undertaken by the mortgage lending industry and until the legalities of these actions on their behalf can be qualified, the hardworking people of Hawaii need protection from these predatory actions,” said Rep. Carroll.
Not all in the community are in agreement. In testimony yesterday, the Executive Director of the Office of Consumer Protection, Stephen Levins said, “The Department does not believe the present circumstances warrant such a moratorium.” He further stated that, calls for a nation wide moratorium on housing foreclosures has been repeatedly rejected, “amid fears that such a move could cripple an already slow recovery of the U.S. housing market.”
Those speaking in support of the measure included representatives with the ILWU Local 142. The union voiced support for the measure via written testimony, saying that foreclosures create more problems than they solve. “While lenders may be grateful to cut their losses, even they will have a difficult time disposing of foreclosed homes.”
Maui Attorney Lance D. Collins agreed saying, “the Governor and or leadership of the house should not be forced into a position whereby a special session must be called to avoid a catastrophic flood of foreclosure actions.”
The bill now advances to the House Floor for a vote.