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.