Community coalition files amicus brief urging Hawaiʻi Supreme Court to reconsider 20-year foreclosure ruling

A coalition of community groups — joined by State Rep. Tina Nakada Grandinetti — today filed an amicus brief asking the Hawaiʻi Supreme Court to reconsider its recent decision, Bank of New York Melon v. White, that changed the statute of limitations for mortgage foreclosures from six years to 20 years. The coalition notes this is years after the underlying loan note is no longer enforceable.

“Giving lenders 20 years to act invites delay and uncertainty,” said Lance D. Collins, counsel for the amici. “Families shouldn’t live under a cloud for two decades. Hawaiʻi’s Legislature made mortgages security for a debt in 1939 — if the debt can’t be enforced after six years, the foreclosure shouldn’t be able to go forward.”

Collins shared what the coalition believes the ruling means for everyday people:

• Old mortgages could come back to life. Loans that went into default many years ago could see renewed foreclosure attempts.
• Condo owners could be squeezed. When an owner walks away and a lender waits, other owners must cover the building’s expenses and cannot foreclose while a senior mortgage is outstanding. Nearly 300,000 Hawaiʻi residents live in condominium units statewide, so the exposure is broad.
• Communities still recovering are at risk. Areas hit hard by the Great Recession and subprime lending could face new waves of instability.

“We’re asking the Court to hear full arguments and consider the real-world impact on Hawaiʻi families,” said Bianca Isaki, co-counsel for the amici.

The filing asks the Court to reconsider the decision or, alternatively, to depublish it so it does not “set a broad precedent.” If the Court sets oral argument, the coalition requests an opportunity to participate to share community impacts and statewide data.

The amicus brief explains the legislative history behind Hawaiʻi’s rule that a mortgage is a security interest, not a transfer of ownership;  presents a 50-state snapshot showing that most states like Hawaiʻi do not allow foreclosure when the underlying debt is no longer enforceable; and offers on-the-ground evidence of how a 20-year window would  burden homeowners, condo associations and neighborhoods.

Amici include: Lahaina Community Land Trust; Nā Aikane o Maui; Molokaʻi Community Service Council; De-Occupy Hawaiʻi; Honolulu Tenants Union;  Hawaiʻi Filipinos for Truth, Justice and Democracy; Kōkua Council for  Senior Citizens of Hawaiʻi; Maui Housing Hui; Maui Medic Healers Hui; Hawaiʻi Alliance for Progressive Action; Share Your Mana; Mutual Aid Lāhui; Maui Tomorrow Foundation; Food Not Bombs Hawaiʻi; Hoʻopae Pono Peace Project; West Maui Preservation Association; and Rep. Tina Nakada Grandinetti.