My Blog

9th Circuit Rules "Lenders" Who Seek to Foreclose in Hawaii Must Strictly Comply With Statutory Foreclosure Procedures.

Posted by Jeffrey Foster | Dec 22, 2012 | 0 Comments

The Hawaii case of In re:  Kekauoha-Alisa arises from a Chapter 13 bankruptcy case in which the (alleged) mortgage lender failed to properly announce the postponement of a nonjudicial foreclosure sale after the automatic stay went into effect.  The Appellant/Debtor Margery Kanamu-Kalehuanani Kekauoha-Alisa owned property on the Big Island.  The property was secured by a deed of trust allegedly owned by an entity called JPMC Mortgage.

HRS 667-5 requires a foreclosure sale to be "postponed from time to time by public announcement made by the mortgagee or by a person acting on the mortgagee's behalf".  In this case, the law firm representing JPMC sent a legal secretary to the auction to postpone the sale of the Debtor's home.  However, the legal secretary had not previously postponed a foreclosure sale.  Rather than making a public announcement that the auction would be postponed the legal secretary privately spoke to auction attendees but did not advise the attendees that the auction of the Debtor's home would be postponed.

The bankruptcy trial court and Bankruptcy Appellate Panel (BAP) differed over the interpretation of the term "public announcement".  The trial court ruled that the secretary's actions failed to comply with Hawaii law.  BAP disagreed.

The 9th Circuit agreed with the trial court and ruled that the lender failed to comply with HRS 667-5.  The 9th Circuit ruled:  "Hawaii law requires strict compliance with statutory foreclosure procedures".

Although the strict compliance ruling is fantastic for Hawaii homeowners, the Court's ruling on damages may be the most compelling for homeowners fighting foreclosure.  In addition to ruling the lender's failure to strictly comply with Hawaii law constitutes a breach of the mortgage contract, the Court upheld the trial court's ruling that the lender's improper postponement constitutes a "deceptive practice" under HRS 480-2.  The amount of Debtor's damages will be determined by the trial court.

A big win for Hawaii homeowners.  Here's a link to the case: http://scholar.google.com/scholar_case?case=1183023605998392901.

About the Author

Jeffrey Foster

Attorney Jeffrey Foster is the founding partner of Foster Law Offices. An accomplished litigation and transaction attorney, Jeff proudly represents Washington individuals and businesses in legal matters Personal Injury, Bankruptcy, Real Estate and Civil Litigation.

Comments

There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

Foster Law Offices

Flo trans logo

With offices on the Big Island of Hawaii and Washington State, Foster Law Offices represents clients in personal injury and real estate matters. We are also available for representation in a wide range of civil litigation cases.

Strategic Advocacy, Friendly Service.

Attorney Jeffrey Foster proudly represents individuals and business who are looking for representation and strategic legal advice. From Kailua-Kona to Honolulu to Seattle, Tacoma and Everett, Mr. Foster takes great pride in his cases and the results obtained for his clients. Thank you for visiting the online home for Mr. Foster's Hawaii practice, Foster Law Offices LLLC and his Washington practice, The Law Offices of Jeffrey E. Foster, PLLC. We look forward to the opportunity to assist you in resolving your case, claim, transaction or litigation matter. Thank you and Mahalo.