Nonprofits, state partner to help Lahaina homeowners fight foreclosure

Maui nonprofits, Hawaiʻi Community Lending (HCL) and Lahaina Community Land Trust (LCLT), joined with the Hawaiʻi Department of Commerce and Consumer Affairs’ Division Financial Institutions (DFI) to announce a partnership to help Lahaina owner-occupant homeowners prevent foreclosure and support rebuilding efforts.

“Whatʻs happening right now is the reason why LCLT was formed,” said Mikey Burke, LCLT board president.  “To be in a position to help our community from losing our land, and our neighbors from losing their homes. We are committed to using every tool available to stop the continued displacement of our people. That includes pushing back on the predatory practice of prematurely initiating foreclosure proceedings on folks while they are under an approved disaster forebearance plan.”

Through the partnership, HCL, LCLT, and DFI will work side-by-side to fight foreclosures and displacement of Lahaina homeowners. HCL will assess homeowners, negotiate with mortgage servicers to secure forbearance and loan modifications, and help find funding and financing to rebuild. LCLT will refer all homeowners interested in putting their land in trust to enroll in the free Lahaina Homeowner Recovery Program administered by HCL so they can access education and resources to stop foreclosures and rebuild. Foreclosure notices from servicers received by homeowners should be reported to the Division of Financial Institutions for review to determine if any notices were issued in violation of federal law. DFI will also provide guidance to recoup any costs incurred by homeowners for unlawful foreclosures.

“We are honored to link arms with the Lahaina Community Land Trust and the Division of Financial Institutions to prevent foreclosure and displacement of Lahaina families from their land,” said HCL Executive Director, Jeff Gilbreath. “This partnership will ensure Lahaina homeowners are provided access to education and tools so they can sustain homeownership, now and for future generations.”

The partnership comes at a time when Lahaina homeowners have been receiving foreclosure notices from their mortgage servicers while on forbearance plans. 

“At a recent mortgage assistance event in Lahaina, we learned that homeowners in forbearance were receiving notices of foreclosure due to nonpayment of their mortgage. Owner-occupant borrowers who have been granted a forbearance, by law, cannot be in foreclosure status for nonpayment,” said Iris Ikeda, Hawaiʻi Commissioner of Financial Institutions.

Federal regulatory agencies issued guidance immediately following the fire that encourages mortgage servicers “to adjust or alter terms on existing loans in [Lahaina]…[and] individually evaluate modifications of existing loans to determine whether they represent troubled debt restructurings or modifications to borrowers experiencing financial difficulty, as applicable.” According to Gilbreath, the Lahaina Homeowner Recovery Program was created to assist mortgage servicers in meeting the requirements of this regulatory guidance and ultimately, to help homeowners prevent foreclosure and displacement.

“If there’s one thing Lahaina homeowners should know right now, is that nothing is worse than doing nothing. Call us, we can help prevent foreclosure,” said Gilbreath.

Owner-occupant Lahaina homeowners who are at-risk of foreclosure, are invited to complete the Program Interest Form or contact HCL at 808-587-7656 or kokua@hawaiiancommunity.net.