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In re: MARGERY KANAMU KALEHUANANI KEKAUOHA-ALISA, 9th Cir. BAP – “Court voided the sale and awarded her treble damages, Atty’s Fees”

In re: MARGERY KANAMU KALEHUANANI KEKAUOHA-ALISA, 9th Cir. BAP – “Court voided the sale and awarded her treble damages, Atty’s Fees”


FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

In re: MARGERY KANAMU-
KALEHUANANI KEKAUOHA-ALISA,
Debtor,

MARGERY KANAMU-KALEHUANANI
KEKAUOHA-ALISA,
Appellant,

v.

AMERIQUEST MORTGAGE COMPANY;
JPMC SPECIALTY MORTGAGE, LLC,
FKA WM Specialty Mortgage,
LLC,
Appellees.

Appeal from the Ninth Circuit
Bankruptcy Appellate Panel
Pappas, Dunn, and Jury, Bankruptcy Judges, Presiding

Argued and Submitted
February 15, 2012—Honolulu, Hawaii

Filed March 26, 2012

Before: Alfred T. Goodwin, Stephen S. Trott, and
Mary H. Murguia, Circuit Judges.

Opinion by Judge Trott

COUNSEL

Lissa D. Shults and Bradley R. Tamm, Shults & Tamm, ALC,
Honolulu, Hawaii, for the appellant.

Paul Alston and Tina L. Colman, Alston Hunt Floyd & Ing,
Honolulu, Hawaii, for the appellees.

OPINION

TROTT, Senior Circuit Judge:

This case requires us to determine whether a mortgage
company violated Hawaii state law when it did not publicly
announce the postponement of a foreclosure sale of property
owned by Appellant Margery Kanamu-Kalehuanani
Kekauoha-Alisa, and if so, to ascertain the proper remedy for
that violation. A federal bankruptcy court held that Appellees’
failure publicly to announce the foreclosure violated the
requirements of Hawaii’s nonjudicial foreclosure procedure
under Hawaii Revised Statute (HRS) § 667-5, as well as its
consumer protection law, HRS § 480-2. The court voided the
sale of the Appellant’s property and awarded her treble dam-
ages of $417,761.66 under HRS § 480-13 for violation of the
consumer protection statute. The Bankruptcy Appellate Panel
reversed, ruling that the mortgagee’s actions did not violate
state law.

We hold that (1) the lack of public announcement did vio-
late Hawaii’s nonjudicial foreclosure statute, and (2) this
defect was a deceptive practice under state law. Accordingly,
we affirm the bankruptcy court’s avoidance of the foreclosure
sale. However, we remand to the bankruptcy court for a
proper calculation of attorneys’ fees and damages under HRS
§ 480-13.

I BACKGROUND

In 2002, Margery Kanamu-Kalehuanani Kekauoha-Alisa
(Debtor) refinanced a mortgage on her property on Hawaii
Island and executed a promissory note to Ameriquest Mort-
gage Company in the amount of $127,500. Debtor defaulted
on her loan eight times, causing Ameriquest to initiate fore-
closure proceedings in early 2005. On April 6, 2005 Ameri-
quest assigned its interest in the mortgage to WM Speciality
Mortgage LLC, which later became JPMC Mortgage, the
named party in this action. The assignment notwithstanding,
Ameriquest continued to service Debtor’s mortgage (hereaf-
ter, Ameriquest and JPMC Mortgage are referred to collec-
tively as “Lenders”). A foreclosure sale was scheduled for
May 13, 2005.

On May 10, 2005, three days before the scheduled foreclo-
sure sale, Debtor filed for Chapter 13 bankruptcy, triggering
an automatic stay of the sale. To comply with the stay, a law
firm employed by Lenders postponed the scheduled foreclo-
sure sale. HRS § 667-51 authorizes 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.” The law firm properly announced the postponement
of the sale three times from May 13, 2005 until September 23,
2005.

On September 23, 2005, the law firm attempted to postpone
the sale yet again, a fourth and final time. The auction was
scheduled to occur at noon at a flagpole located in front of
Hale Halewai, a local community center. The firm delegated
the task to a legal secretary who had never before postponed
a foreclosure sale. The secretary arrived ten or fifteen minutes
before noon. Rather than shouting out the postponement to all
those present, the secretary asked several of the people pres-
ent if they were interested in Debtor’s property. Everyone she
spoke to said they were not. She did not attempt to speak to
those individuals who appeared to be there for another auction
that was occurring at the same time, and she did not speak to
everyone in the area. She did not tell those she spoke with that
the auction was postponed to December 2, 2005. The secre-
tary stayed at the flagpole until approximately 12:25 PM, after
the other auction had finished and the area was deserted. She
left without ever announcing or posting the information that
the sale of Debtor’s property had been postponed.

On November 1, 2005, Lenders moved for relief from the
stay to allow them to proceed on the foreclosure sale. On
November 21, after Debtor failed to respond, the bankruptcy
court granted Lenders’ motion. The foreclosure sale took
place on December 2. The successful — and only bid — was
a credit bid made by the auctioneer on behalf of Lenders. A
quitclaim deed to the property was recorded on December 27,
2005. Lenders initiated an ejectment action in state court in
January, 2006. Lenders obtained a judgment in their favor on
April 11, 2006, which Debtor appealed. That appeal is still
pending in state court — apparently waiting for our decision.

On April 26, 2006, Debtor filed a complaint in the bank-
ruptcy court, alleging, inter alia, that the sale had violated the
automatic stay, breached the terms of the mortgage contract,
constituted an unfair and deceptive trade practice under HRS
§ 480-2, violated various requirements of nonjudicial foreclo-
sure procedure under HRS § 667-5, and constituted a fraudu-
lent transfer under HRS § 651C-7. The bankruptcy court
dismissed on summary judgment Debtor’s claims alleging a
violation of the stay and fraudulent transfer.

After a five-day bench trial on the remaining claims, the
bankruptcy court issued amended findings of fact and conclu-
sions of law. The court concluded that Lenders’ failure to
publicly pronounce the postponement of the foreclosure sale
on September 23, 2005, violated the “public announcement”
requirement of HRS § 667-5 as well as the terms of the mort-
gage contract. Contrary to Debtor’s assertion on appeal, the
court found only a single violation of HRS § 667-5. As a rem-
edy, the court voided the foreclosure sale. The court held that
the improper postponement was also a breach of the mortgage
contract, because the contract required that Lenders comply
with state law in any foreclosure proceeding.

In addition, the court ruled that the improper postponement
was an unfair and deceptive trade practice under HRS § 480-
2. It awarded Debtor treble damages, under HRS § 480-13,
for damages sustained as a result of the violation of § 480-2,
calculating the damages sustained as (1) Debtor’s lost equity
in her house, (2) the rental value of the house for the time dur-
ing which she lost possession of it, and (3) the attorneys’ fees

Debtor expended defending against the state court ejectment
action. The total money judgment was $417,761.66.

Finally, the court awarded Debtor additional attorneys’ fees
under two Hawaii statutes: HRS § 607-14, allowing fees for
the prevailing party in contract claims, and HRS § 480-
13(b)(1), allowing fees for the party establishing a violation
of HRS § 480-2. The court allocated attorneys’ fees equally
between the contract claim and the HRS § 480-2 claim.
Because HRS § 607-14 limits attorneys fees to twenty-five
percent of the judgment on a contract claim, the court allowed
recovery of only $38,945.01 for that portion of the attorneys’
fees claim, a sum which it arrived at by calculating twenty-
five percent of the value of Debtor’s equity in the mortgaged
property.

Lenders appealed the bankruptcy court’s decision to the
Bankruptcy Appellate Panel (“BAP”), challenging both the
bankruptcy court’s findings of liability and its calculation of
damages and attorneys’ fees. Debtor cross-appealed, challeng-
ing only the bankruptcy court’s ruling that attorneys’ fees
under HRS § 607-14 should be limited to twenty-five percent
of the value of Debtor’s equity in the foreclosed property.

The BAP reversed the bankruptcy court on its findings of
liability, holding that Lenders’ actions (1) met the public
announcement requirement of HRS § 667-5, (2) did not
breach the mortgage contract, and (3) did not constitute an
unfair or deceptive practice under HRS § 480-2. Because it
found in favor of Lenders on the liability issues, the BAP did
not reach the parties’ challenges to damages and attorneys’
fees. Debtor now appeals the decision of the BAP.

II STANDARD OF REVIEW

We review the decisions of the BAP de novo. Wood v.
Stratos Prod. Dev., LLC (In re Ahaza Sys., Inc.), 482 F.3d
1118, 1123 (9th Cir. 2007). We apply the same standard of
review that the BAP applied to the bankruptcy court’s ruling.
Id. We review the bankruptcy court’s legal conclusions de
novo and its factual findings for clear error. Stevens v. Nw.
Nat’l Ins. Co. (In re Siriani), 967 F.2d 302, 303-04 (9th Cir.
1992).

III ANALYSIS

A. Hawaii Revised Statute § 667-5

[1] HRS § 667-5 authorizes a foreclosure sale to be “post-
poned from time to time by public announcement made by the
mortgagee or by a person acting on the mortgagee’s behalf.”
In this case, we must first address whether the secretary’s
actions on September 23rd constituted a “public announce-
ment” under the meaning of Hawaii law. When interpreting
state law, we are bound by the decision of the highest state
court. Sec. Pac. Nat’l Bank v. Kirkland (In re Kirkland), 915
F.2d 1236, 1238 (9th Cir. 1990). Absent a controlling state
court decision, our duty is to predict how the highest state
court would decide the issue. Id. at 1239.

[2] Neither HRS § 667-5 nor Hawaii case law defines the
term “public announcement.” Therefore, we apply Hawaii’s
rules of statutory construction to interpret the term. Hawaii
courts follow “certain well-established principles of statutory
construction.” Haw. Gov’t Emps. Ass’n, AFSCME Local 152,
AFL–CIO v. Lingle, 239 P.3d 1, 6 (Haw. 2010). Under those
principles, “ ‘where the statutory language is plain and unam-
biguous, our sole duty is to give effect to its plain and obvious
meaning.’ ” Id. (quoting Awakuni v. Awana, 165 P.3d 1027,
1034 (Haw. 2007)). If there is ambiguity, we may consider
context and legislative purpose to determine the meaning of
the word or phrase. Id. at 6, 11 n.16.

[3] Applying these principles, it is clear that any reason-
able meaning of “public announcement” does not encompass
Lenders’ actions in this instance. The bankruptcy court turned
to the dictionary, noting that Merriam-Websters defines “an-
nounce” as “to make known publicly: PROCLAIM” and “an-
nouncement” as “public notification or declaration.” No party
suggests a different definition, and this interpretation captures
the essence of what the statute requires: Mortgagees shall
publicly announce the postponement of a foreclosure sale to
a subsequent date.

[4] In this case, the secretary engaged in several conversa-
tions with individuals whom, based on the secretary’s judg-
ment, appeared as if they might have been present because
they were interested in the foreclosure of Debtor’s property.
Even in these conversations, the secretary did not communi-
cate that the sale had been postponed. The secretary did not,
in private conversation or otherwise, announce that the Debt-
or’s property would be sold on December 2, 2005. The bank-
ruptcy court’s conclusion, based on these facts, was that the
secretary “never made an open, oral announcement to all
those present of the date and time to which the auction was
being postponed and she did not post or display such an
announcement in written form.” Lenders do not dispute this
finding of fact, and it suffices to establish under the plain
meaning of HRS § 667-5 that there was no public announce-
ment of a postponement.

The BAP acknowledged that “[i]t is undisputed that the
secretary did not make a ‘public announcement’ within its
commonly understood or dictionary meaning.” Nonetheless, it
reasoned that the phrase must be given a “fair and reasonable
construction” and interpreted in light of the purpose of the
statute. The BAP concluded that the requirements of the stat-
ute could be met by “any mode of communication that reason-
ably achieves the spirit and purpose of the ‘public
announcement’ requirement,” which they reasoned was to
“inform those who appeared at a foreclosure sale that it has
been postponed.”

[5] The BAP erred in relying on statutory context and pur-
pose to introduce ambiguity into the meaning of “public
announcement” because, as it acknowledged, the meaning of
the phrase is plain on its face. See Ross v. Stouffer Hotel Co.
Ltd., 879 P.2d 1037, 1044 (Haw. 1994) (“[W]here the terms
of a statute are plain, unambiguous and explicit, we are not at
liberty to look beyond that language for a different mean-
ing.”). However, even if use of these tools of statutory inter-
pretation were appropriate, we would not find the BAP’s
conclusion persuasive. Hawaii’s nonjudicial foreclosure stat-
ute affords mortgagees a quick and inexpensive alternative to
judicial foreclosure but balances that accommodation by man-
dating compliance with minimal procedural requirements to
protect mortgagors’ interest in their property. Lee v. HSBC
Bank USA, 218 P.3d 775, 779-80 (Haw. 2009). That statutory
balance would be upset if mortgagees could dispense with
those procedures they perceive as futile, or substitute proce-
dures they believe achieve the “spirit and purpose” of the law.
A reviewing court would frequently have no evidence of the
adequacy of those substitute procedures other than the testi-
mony of the mortgagee’s agent. In this case, for instance, the
bankruptcy court would be required to rely on the rough
assessment of a legal secretary undertaking her first foreclo-
sure postponement that none of the individuals present was
interested in Debtor’s property. Moreover, the secretary
admitted she had signed a declaration stating that she had
publicly announced the postponement when she knew she had
not made a public announcement. We reject an approach that
would force a trial court to rely upon evidence of this sort,
and hold that Lenders’ actions violated the plain meaning of
“public announcement” in HRS § 667-5.

[6] We turn to the question of the proper remedy for Lend-
ers’ violation of HRS § 667-5. Hawaii law does not specify a
remedy. The bankruptcy court, based on its reading of Silva
v. Lopez, 5 Haw. 262, 1884 WL 6695 (1884), ruled that
improper postponement required voiding the subsequent fore-
closure sale. The BAP, on the other hand, believed that Silva
does not provide controlling precedent, and reasoned that the
Hawaii Supreme Court would have to look to other jurisdic-
tions to decide the issue. Relying on the trend in the majority
of states, the BAP concluded that the Hawaii Supreme Court
would draw a distinction between technical violations of fore-
closure procedures which do not prejudice a mortgagor and
substantive violations which do. The BAP held that a foreclo-
sure sale should be voided only when a procedural violation
is “significant, material, causes prejudice or otherwise con-
tributes to the inadequacy of the price or other injury.” The
BAP concluded in this instance that Debtor had shown no
prejudice from the foreclosure and was not entitled to any
relief.

[7] With all respect to the BAP, we agree with the bank-
ruptcy court that Hawaii precedent is clear and controlling.
Mortgagee violation of the nonjudicial foreclosure require-
ments of HRS § 667-5, whether those violations are griev-
ously prejudicial or merely technical, voids a subsequent
foreclosure sale. Id. at *7. In Silva, the Hawaii Supreme Court
voided a mortgage sale of real estate and livestock because
the mortgagee did not comply with the conditions of the
power of sale set out in the mortgage contract. Id. The Silva
mortgagee erred by scheduling the foreclosure sale one day
too early: under the mortgage contract, the power of sale
could be exercised only after three weeks of notice and the
Silva mortgagee had scheduled the sale after only twenty days
of notice. Id. at *3, *5. The Silva court affirmed the trial
court’s ruling that “if the notice is insufficient, the sale under
it is void and not merely voidable.” Id. at *7. Silva establishes
that under Hawaii law, even technical violations of foreclo-
sure procedures void a subsequent foreclosure sale.

The BAP attempted to distinguish Silva on two grounds.
First, the BAP noted that the Silva court did not explain why
strict, rather than substantial compliance, with foreclosure
procedure is required. However, this undercuts, rather than
supports, the BAP’s conclusion. The fact that the Silva court
did not discuss prejudice or substantial compliance demon-
strates that this factor is irrelevant to the mortgagor’s remedy
under Hawaii law.

The BAP also distinguished Silva on the ground that there
“the defect in the notice requirement was coupled with
another irregularity — the livestock was not available for
inspection at the auction sale.” This assertion misreads Silva.
In fact, the Silva court voided the sale of real estate solely on
the basis of inadequate notice, and not because of the failure
to display the auctioned cattle. The decision makes this clear:
“[T]he third objection to the sale [that the mortgagee failed to
display the cattle to bidders] . . . applies only to the sale of the
chattels.” Silva, 1884 WL 6695, at *3 (emphasis added).

That Hawaii law requires strict compliance with statutory
foreclosure procedures is confirmed by the Hawaii Supreme
Court’s recent decision in Lee, a decision that was not avail-
able at the time the BAP issued its decision. The Lee court,
answering a question certified to it by a federal district court,
held that a foreclosure sale conducted after the mortgagors
had cured their default was not valid. The court cited Silva for
the proposition that the “foreclosure sale did not comply with
the requirements of HRS section 667-5 and was, thus, inval-
id.” Lee, 218 P.3d at 779. As in Silva, there was no discussion
in Lee of the degree to which the violation of HRS § 667-5
prejudiced the mortgagor that would suggest that prejudicial
impact is relevant under Hawaii’s law. While Lee involved
the violation of a different requirement of HRS § 667-5 than
is at issue here, the court’s reasoning encompasses the facts
of this case.

Finally, we note that a strict compliance requirement is not
so out of step with the law of other jurisdictions that we have
reason to second-guess our interpretation of Hawaii law. The
BAP is accurate in noting that the majority of states draw a
distinction between procedural defects that are insignificant
and those that are prejudicial enough to render a foreclosure
sale void or voidable. See, e.g., Gilroy v. Ryberg, 667 N.W.2d
544, 553-54 (Neb. 2003) (describing the majority approach
and collecting cases). However, this trend is far from unani-
mous. Several states have long required strict compliance
with nonjudicial foreclosure statutes. See Univ. Sav. Ass’n v.
Springwoods Shopping Ctr., 644 S.W.2d 705, 706 (Tex.
1982) (mortgagee’s failure to perform “ministerial act” of
recording appointment of successor trustee grounds for void-
ing sale); Bottomly v. Kabachnick, 434 N.E.2d 667, 669-70
(Mass. App. Ct. 1982) (failure in notice of sale to identify the
holder of mortgage voids sale). Other states have begun to
strictly construe the terms of recently enacted statutes
designed to protect mortgagors. See Aurora Loan Servs., LLC
v. Weisblum, 923 N.Y.S.2d 609, 614 (N.Y. App. Div. 2011)
(strict compliance with statutorily mandated notice require-
ments is condition precedent to foreclosure, without consider-
ation of prejudice to mortgagor); EMC Mortg. Corp. v.
Chaudhri, 946 A.2d 578, 586 (N.J. Super. Ct. App. Div.
2008) (“[A] lender’s substantial compliance with the contents
of a notice of intent, sent by a lender prior to initiation of fore-
closure, . . . was not authorized by the statute’s terms.” (inter-
nal quotation marks omitted)). Hawaii’s approach, therefore,
might place it in the minority, but does not place it out of the
mainstream.

[8] We conclude that Lenders’ failure to postpone properly
the foreclosure sale did violate HRS § 667-5 and that the
proper remedy was avoidance of the sale.

B. Breach of Contract

[9] The bankruptcy court ruled that the terms of the par-
ties’ mortgage agreement specified that Lenders could fore-
close only in compliance with the procedural requirements of
HRS § 667-5. Lenders do not dispute the court’s interpreta-
tion of the contractual language. Therefore, because Lenders’
improper postponement of the foreclosure sale violated HRS
§ 667-5, it also constituted a breach of contract.

[10] Lenders’ contractual breach is an alternative ground
upon which the bankruptcy court properly voided the foreclo-
sure sale. Lenders argue, however, that damages for the
breach of contract should be subject to standard causation
requirements, and that the breach was not the cause of the
foreclosure. Lenders’ discussion of general contract principles
of causation is not persuasive in the context of the mortgage
at issue. The bankruptcy court read the mortgage contract as
requiring compliance with the nonjudicial foreclosure statute
as a condition precedent to Lenders’ right to exercise the
power of sale in the contract. We agree. In the context of this
interpretation of the mortgage, the avoidance of the sale is
consistent both with case law particular to mortgage agree-
ments and with general contract principles. See Silva, 1884
WL 6695, at *7; Stevens v. Cliffs at Princeville Assocs., 684
P.2d 965, 969 (Haw. 1984) (“If the condition is not fulfilled,
the right to enforce the contract does not come into exis-
tence.” (internal quotation marks omitted)).

C. Hawaii Revised Statute § 480-2 and § 480-13

[11] HRS § 480-2(a) prohibits “unfair or deceptive acts or
practices in the conduct of any trade or commerce.” Consum-
ers who establish a violation of § 480-2 are entitled to three-
fold damages under HRS § 480-13 for those “damages
sustained” as a result of the defendant’s deceptive actions.
HRS § 480-13(a)(1). Whether a practice is deceptive or unfair
is “ordinarily a question of fact,” Balthazar v. Verizon
Hawaii, Inc., 123 P.3d 194, 197 n.4 (Haw. 2005), subject to
review under a clearly erroneous standard.

The test for whether a practice is “deceptive” under HRS
§ 480-2 is distinct from whether a practice is “unfair,” and
both tests are established by case law rather than by statute.
State ex rel. Bronster v. U.S. Steel Corp., 919 P.2d 294, 313
(Haw. 1996). “A deceptive act or practice is ‘(1) a representa-
tion, omission, or practice that (2) is likely to mislead con-
sumers acting reasonably under the circumstances where (3)
the representation, omission, or practice is material.’ ”
Yokoyama v. Midland Nat’l Life Ins. Co., 594 F.3d 1087,
1092 (9th Cir. 2010) (quoting Courbat v. Dahana Ranch, Inc.,
141 P.3d 427, 435 (Haw. 2006)) (alterations omitted). This
inquiry is objective — the test is whether the practice was
“capable of misleading a reasonable consumer.” Id. at 1089.
There need not be an intent to deceive nor actual deceit. Cour-
bat, 141 P.3d at 435 n.9.

[12] The bankruptcy court found that failure to make a
public announcement “is likely to mislead a consumer acting
reasonably under the circumstances . . . . Proper notice of the
actual date of a foreclosure auction is essential to ensure that
foreclosed properties bring adequate prices and that the public
has an appropriate opportunity to bid.” The court’s factual
finding is a reasonable one to which we must defer.

The BAP’s reversal of this finding is premised on two
errors. First, by focusing on whether there were, in fact, any
consumers in the vicinity that would have heard a public
announcement, the BAP failed properly to apply the requisite
objective test. Given that “actual deception need not be
shown; the capacity to deceive is sufficient,” State ex rel.
Bronster, 919 P.2d at 313, the BAP’s concern with the fact
that no potential buyers appeared to be present was an
improperly subjective inquiry into whether there was actual
deception.

Second, the BAP did not afford the bankruptcy court’s fac-
tual finding the required degree of deference when it reasoned
that it was “not required to accept [the bankruptcy court’s]
conclusions as to the legal effect of [its factual findings].”
Whether a reasonable consumer would likely be misled by a
practice is a question of fact unless “no reasonable person
would determine the issue in any way but one.” Courbat, 141
P.3d at 436 (internal quotation marks omitted). Under this
standard, the bankruptcy court’s determination that improper
postponement of this sort would deceive a reasonable con-
sumer is not clearly erroneous. See Anderson v. City of Besse-
mer City, 470 U.S. 564, 574 (1985) (“Where there are two
permissible views of the evidence, the factfinder’s choice
between them cannot be clearly erroneous.”).

Because we affirm the bankruptcy court’s finding that
Lenders’ improper postponement was a deceptive practice
under HRS § 480-2, we need not consider whether it was also
an unfair practice.

[13] However, our conclusion that Lenders’ improper post-
ponement amounted to a deceptive practice does not automat-
ically entitle Debtor to monetary damages.2 Under HRS
§ 480-13(b)(1), a consumer injured by a violation of § 480-2
“[m]ay sue for damages sustained by the consumer, and, if the
judgment is for the plaintiff, the plaintiff shall be awarded a
sum not less than $1,000 or threefold damages.” Under this
statute, consumers are entitled to damages for a violation of
HRS § 480-2 only if they show that those acts “cause private
damage.” Ai v. Frank Huff Agency, Ltd., 607 P.2d 1304, 1312
(Haw. 1980), overruled in part on other grounds by Robert’s
Haw. Sch. Bus. Inc. v. Laupahoehoe Transp. Co., 982 P.2d
853 (Haw. 1999); see also Haw. Med. Ass’n v. Haw. Med.
Serv. Ass’n, 148 P.3d 1179, 1216 (Haw. 2006) (to receive
damages under HRS § 480-13 the injured consumer must
show “(1) a violation of HRS chapter 480; (2) injury to the
plaintiff ’s business or property resulting from such violation;
and (3) proof of the amount of damages” (footnotes omitted)).

Any injury must be fairly traceable to the defendant’s
actions. Flores v. Rawlings Co., LLC, 177 P.3d 341, 355 n.23

We do not consider Lenders’ argument that they cannot be held vicari-
ously liable for the actions of an independent contractor because that argu-
ment was not made before the BAP and was therefore forfeited. See
Resolution Trust Corp. v. First Am. Bank, 155 F.3d 1126, 1129 (9th Cir.
1998) (issues raised for first time before appellate court are generally for-
feited).

(Haw. 2008). Under HRS § 480-13, the injury is measured
through standard expectation damages, i.e., damages suffi-
cient to make the plaintiff whole. Leibert v. Fin. Factors, Ltd.,
788 P.2d 833, 836-37 (Haw. 1990). The Hawaii Supreme
Court has emphasized that “ ‘[d]eception [is] the evil that con-
sumer fraud statutes seek to rectify.’ ” Flores, 177 P.3d at 357
(second alteration in original) (quoting Zanakis-Pico v. Cutter
Dodge, Inc., 47 P.3d 1222, 1231 (Haw. 2002)).

[14] The proper calculation of damages and causation are
questions of fact under Hawaii law, which we do not disturb
unless they are clearly erroneous. Kato v. Funari, 191 P.3d
1052, 1058 (Haw. 2008) (damages are question of fact); Doe
Parents No. 1 v. State Dep’t of Educ., 58 P.3d 545, 569 (Haw.
2002) (causation is question of fact). In this instance, how-
ever, the bankruptcy court failed to make the requisite factual
findings. See Jess v. Carey (In re Jess), 169 F.3d 1204, 1208-
09 (9th Cir. 1999) (Bankruptcy Rule 7052 requires the bank-
ruptcy court to make findings of fact and conclusions of law).
While the bankruptcy court’s decision acknowledges that cau-
sation is a required element of Debtor’s case, the court made
no finding — explicit or otherwise — that the enumerated
damages were caused by and fairly traceable to Lenders’
improper postponement. Rather, the court simply listed as
damages Debtor’s loss of equity in her property, the rental
value of the property for the time Debtor was apparently
excluded from possession, and attorneys’ fees accrued in the
state court ejectment action.

Debtor urges us to overlook this omission and to construe
the bankruptcy court’s calculation of damages as including an
implicit factual finding of causation. If we were to adopt
Debtor’s suggestion, which we do not, we would be com-
pelled by the record to conclude that the bankruptcy court’s
“implicit” finding of causation was clearly erroneous. The
damages the bankruptcy court awarded all flow from the fore-
closure on Debtor’s home and appear to give Debtor an inap-
propriate windfall. This seems irreconcilable with the
bankruptcy court’s finding that Debtor did not experience
foreclosure of her home because of Lenders’ imperfect post-
ponement procedure. As the bankruptcy court phrased it,
“There is no question, . . . that the Mortgage was in default
and that the mortgagee was entitled to foreclose. The only
question is whether the proper party foreclosed the Mortgage
in the proper manner.” In sum, the court’s findings of fact
appear to establish that Debtor’s losses “result[ed] from” her
default, rather than Lenders’ failure to shout out the postpone-
ment of the foreclosure. Haw. Med. Ass’n, 148 P.3d at 1216.

[15] However, rather than reading an erroneous finding of
causation into the bankruptcy court’s decision, we follow our
ordinary procedure when a necessary factual finding is absent,
and remand the case to the bankruptcy court to make the
proper requisite findings of fact under HRS § 480-13. See
Graves v. Myrvang (In re Myrvang), 232 F.3d 1116, 1124
(9th Cir. 2000). This is the appropriate course because the fac-
tual record may not be complete — Debtor suggests, for
example, that she can prove that but for Lenders’ improper
postponement, she might have succeeded in curing her
default. This fact, if proven, might establish that Debtor’s
temporary loss of possession of the property was “fairly trace-
able” to Lenders’ deceptive practice. Flores, 177 P.3d at 355
n.23. Therefore, on remand the bankruptcy court must deter-
mine the difference, if any, between Debtor’s situation had
Lenders properly postponed the foreclosure sale and Debtor’s
actual situation, given that the sale was improperly postponed.
This framing properly narrows the inquiry to the damage
caused by Lenders’ deceptive postponement. Id. at 357.

D. Attorneys’ Fees

[16] We also vacate the bankruptcy court’s order awarding
attorneys’ fees and remand for calculation of reasonable attor-
neys’ fees in light of our remand of the damages-causation
issue in Debtor’s HRS § 480-13 claim. See UFJ Bank Ltd. v.
Ieda, 123 P.3d 1232, 1233 (Haw. 2005) (vacatur of attorneys’
fees judgment and remand appropriate where judgment on
which fees are based is remanded). Because the issues are
“likely to arise again on remand” we address the parties’ chal-
lenges to the bankruptcy court’s original calculation of attor-
neys’ fees. Everett v. Perez (In re Perez), 30 F.3d 1209, 1216
(9th Cir. 1994).

First, on remand, the bankruptcy court may, in its discre-
tion, consider evidence of the settlement offer purportedly
made by Lenders early in the course of this litigation. The
bankruptcy court initially ruled that it was prohibited from
admitting evidence of the settlement offer by Federal Rule of
Evidence Rule 408. With the benefit of our recent decision in
Ingram v. Oroudjian, 647 F.3d 925 (9th Cir. 2011) (per
curiam), it is now clear that this evidence is admissible. In
Ingram we adopted the reasoning of the Third Circuit’s opin-
ion in Lohman v. Duryea Borough, 574 F.3d 163 (3d Cir.
2009), and held that Rule 408 does not preclude admission of
evidence of a settlement agreement for the purpose of calcula-
tion of attorneys’ fees. Ingram, 647 F.3d at 927. Therefore,
the bankruptcy court may consider evidence of a settlement
offer to the degree such evidence is relevant to the calculation
of reasonable attorneys’ fees under Hawaii law.

[17] Second, Debtor challenges the bankruptcy court’s
decision limiting the portion of attorneys’ fees allotted to the
breach of contract claim to twenty-five percent of Debtor’s
lost equity on the house. The bankruptcy court’s ruling was
based on the twenty-five percent limit contained in HRS
§ 607-14, the statute governing attorneys’ fees in contract
cases. That statute states that “[I]n all actions in the nature of
assumpsit . . . there shall be taxed as attorneys’ fees, to be
paid by the losing party . . . a fee that the court determines to
be reasonable; . . . provided that this amount shall not exceed
twenty-five per cent of the judgment.” HRS § 607-14.

Debtor argues that the twenty-five percent limit does not
apply to her under the exception created in Food Pantry, Ltd.
v. Waikiki Business Plaza, Inc., 575 P.2d 869, 880 (Haw.
1978), because the avoidance of the foreclosure sale was not
a monetary judgment subject to the twenty-five percent limit.
In Food Pantry, the Hawaii Supreme Court held that an action
to enforce a lease did not trigger the twenty-five percent limit
because it “could not result in a money judgment to which the
twenty-five percent limitation could be applied.” Id.

[18] The bankruptcy court did not err in applying the
twenty-five percent limit on attorneys’ fees. The Food Pantry
exception applies only “if no money damages are sought or
awarded, as in a complaint for declaratory judgment, [where]
there is no monetary amount on the basis of which to calcu-
late the twenty-five percent statutory ceiling.” Amfac, Inc. v.
Waikiki Beachcomber Inv. Co., 839 P.2d 10, 35 (Haw. 1992).
Debtor’s complaint requested only damages and attorneys’
fees for her breach of contract claim. The monetary damages
for the contract claim were easily discernible as Debtor’s lost
equity in her property, and the bankruptcy court noted that
Debtor later “elected to recover the Mortgaged Property” in
lieu of monetary damages. Debtor’s election of remedies does
not render the value returned to Debtor an “economic incident
of the judgment” that can escape the twenty-five percent limit.
DFS Group L.P. v. Paiea Props., 131 P.3d 500, 504 n.5
(Haw. 2006).

IV CONCLUSION

We AFFIRM the decision of the bankruptcy court with
respect to its findings of liability for a violation of HRS
§ 667-5, a violation of HRS § 480-2, and breach of contract.
We also AFFIRM the bankruptcy court’s order voiding the
foreclosure sale of Debtor’s property. We VACATE the bank-
ruptcy court’s award of money damages under § 480-13 and
attorneys’ fees under HRS § 607-14 and HRS § 480-13(b)(1),
and we REMAND so that the bankruptcy court may (1) make
the necessary findings of causation and damages under HRS
§ 480-13 and (2) properly calculate attorneys’ fees.

AFFIRMED in part, VACATED and REMANDED in part.

The parties shall bear their own costs on this appeal.

[ipaper docId=86846596 access_key=key-1t94qpfdxtjy52ft185h height=600 width=600 /]

 

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OOOOOOh MORE SECURITIZED DISTRUST HERE

OOOOOOh MORE SECURITIZED DISTRUST HERE


DEADLY CLEAR-

It’s no wonder that the Wall Street MBS scheme collapsed. Last night, together with Lisa Epstein, we ran a random audit on WaMu Mortgage Pass-Through Certificates, Mortgage Loan Trusts. One loan was found in 6 different trusts, another loan was found in FIVE trusts’ original SEC loan level data, 39 were listed in 3 trusts, and 503 were listed in two separate trusts.  

The winner so far is a NEW YORK condo, loan number WaMu loan # 714934858, appeared in 6 DIFFERENT trusts from May through November 2006…

[DEADLY CLEAR]

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HAWAII SENATE RESOLUTION DIRECTING THE AG TO INVESTIGATE FRAUDULENT TRANSFERS AND ASMTS OF MTG LOAN DOCS ARE ALLEGED.

HAWAII SENATE RESOLUTION DIRECTING THE AG TO INVESTIGATE FRAUDULENT TRANSFERS AND ASMTS OF MTG LOAN DOCS ARE ALLEGED.


HAWAII SENATE CONCURRENT RESOLUTION  S.C.R. NO. 39 – NEEDS YOUR SUPPORT AND TESTIMONY BEFORE MARCH 13, 2012 at 10:15 A.M.

Deadly Clear-

In an effort to get the Hawaii Attorney General’s focus on the fraudulent documents filed in the Hawaii Bureau of Conveyances, the Hawaii Senate drafted a Concurrent Resolution in cooperation with the House Representatives:

DIRECTING THE ATTORNEY GENERAL OF THE STATE OF HAWAII TO INVESTIGATE CASES WHERE FRAUDULENT TRANSFERS AND ASSIGNMENTS OF MORTGAGE LOAN DOCUMENTS ARE ALLEGED“…and just in time.

Read More [DEADLY CLEAR]

[ipaper docId=84993759 access_key=key-m3einqckc1g4q8kw2dm height=600 width=600 /]

 

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Hawaii | Mortgage Foreclosure Law Revisions Advised

Hawaii | Mortgage Foreclosure Law Revisions Advised


To put a human dimension on the issue, Sen. Brickwood Galuteria asked Gilbreath, who represents the mortgage counseling organization Hawaiian Community Assets, about the counseling process: “Can you give a sense of what it’s like for the families, the diminished quality of life that happens when you might be losing your home?” asked Galuteria, D-Downtown-Waikiki.

AP-

Foreclosures in Hawaii have plummeted 53 percent since the Legislature passed sweeping mortgage legislation last year, officials said Thursday.

Hawaii had the nation’s 11th highest foreclosure rate in 2010, prompting lawmakers to establish a Mortgage Foreclosure Task Force to look into all aspects of judicial and nonjudicial foreclosures in the state.

The task force’s 2011 findings helped shape legislation that provides extensive protections to residents in danger of losing their homes due to unfair or deceptive practices.

[ABC]

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Hawaii | RE: Tehiva/Phillips Foreclosure Eviction Scheduled 1/2/2012 via Wells Fargo, AHMSI, Sand Canyon, Duval County, FL Kathy Smith

Hawaii | RE: Tehiva/Phillips Foreclosure Eviction Scheduled 1/2/2012 via Wells Fargo, AHMSI, Sand Canyon, Duval County, FL Kathy Smith


Bank Fraud

American Home Mortgage Servicing
Sand Canyon Corporation
Kathy Smith
Soundview Home Loan Trust, 2007-OPT2
Wells Fargo Bank, N.A.

Action Date: January 1, 2012
Location: Maui, HI

On January 2, 2012, Wells Fargo Bank and American Home Mortgage Servicing, Inc. (“AHMSI”) will attempt to force the Tehiva/Phillips family from their family home on 5305 Hana Highway in Maui, Hawaii. This has been the family home for over 100 years.

Wells Fargo is acting as the Trustee for an RMBS Trust, Soundview Home Loan Trust 2007-OPT2. AHMSI is acting as the servicer for the trust.

Wells Fargo and AHMSI have relied on a fraudulent Mortgage Assignment in this foreclosure eviction.

The Assignment is dated June 24, 2010 and was signed by Kathy Smith in Duval County, Florida. Smith purports to be a corporate officer (Assistant Secretary) of Sand Canyon Corporation.

Kathy Smith is not and has never been employed by Sand Canyon Corporation; she is actually employed by AHMSI in its Jacksonville, FL (Duval County) office.

On Hillsborough County, FL, document 2010350478, Kathy Smith swore she was an employee of AHMSI on October 1, 2010.

On Hillsborough County, FL document 20100057228, Kathy Smith swore she was Assistant Secretary of AHMSI on February 8, 2010.

In the Memorandum Decision of the Bankruptcy Court for the District of Arizona in the matter of the bankruptcy of Anthony Tarantola, Case No. 4:09-bk-09703-EWH, Kathy Smith is referred to on Page 5, lines 8-9, as the Assistant Secretary of AHMSI.

To aid in foreclosures, Kathy Smith has used all of the following different job titles:

• Assistant Secretary and Vice President, Ameriquest Mortgage Company (February 3, 2010);

• Assistant Secretary and Vice President, Citi Residential, Inc., Attorney-in-Fact for Ameriquest Mortgage Company (April 12, 2010);

• Attorney-in-Fact, Argent Mortgage Corporation (January 13, 2010);

• Assistant Secretary, Citibank, N.A., as Trustee for American Home Mortgage Asset Trust 2006-3 Mortgage-Backed Pass-Through Certificates, Series 2006-3; (January 13, 2010);

• Assistant Secretary, Deutsche Bank National Trust Company as Indenture Trustee for American Home Mortgage Investment Trust 2006-3, Mortgage-Backed Notes, Series 2006-3 (January 13, 2010);

• Attorney-in-Fact, New Century Mortgage Corporation (January 19, 2010);

• Assistant Secretary, Sand Canyon Corporation f/k/a Option One Mortgage Corporation (April 12, 2010)

• Assistant Secretary, Mortgage Electronic Registration Systems, Inc., as Nominee for American Brokers Conduit (February 25, 2010);

• Assistant Secretary, Mortgage Electronic Registration Systems, Inc., as Nominee for American Home Mortgage (February 18, 2010);

• Assistant Secretary, Mortgage Electronic Registration Systems, Inc., as Nominee for American Home Mortgage Acceptance (January 25, 2010);

• Assistant Secretary, Mortgage Electronic Registration Systems, Inc., as Nominee for Beazer Mortgage Corporation (January 13, 2010);

• Assistant Secretary, Mortgage Electronic Registration Systems, Inc., as Nominee for HomeBanc Mortgage Corporation (January 11, 2010); and

• Assistant Secretary, Mortgage Electronic Registration Systems, Inc., as Nominee for Taylor, Bean & Whitaker Mortgage Corporation (May 7, 2010).

The President of Sand Canyon Corporation, Dale M. Sugimoto, submitted a sworn Declaration signed on March 18, 2009, stating that Sand Canyon Corporation did not own or service any residential real estate mortgages. Despite this sworn statement of the company president, the Assignment in the Tehiva/Phillips foreclosure has Kathy Smith, purporting to act as an officer of Sand Canyon, to transfer the Tehiva/Phillips mortgage to the Soundview Trust. The Sugimoto Declaration was submitted in bankruptcy court for the Eastern District of Louisiana, New Orleans Division, as document 52-3, in the case of Ron Wilson, Case No. 10-51328.

Kathy Smith is also not listed as an officer of Sand Canyon Corporation in the Florida corporate records, nor did Sand Canyon have offices in Florida, where the Assignment was notarized.

The closing date of the Soundview Trust 2007-OPT2 was July 10, 2007. The trust was not authorized to acquire mortgages after this date; and certainly was not authorized to ever acquire any non-performing mortgages.

For all of the reasons set forth above, Wells Fargo and AHMSI should immediately cease their attempts to seize the Tehiva/Phillips home. Wells Fargo should be required to produce Kathy Smith in court in Hawaii and to produce the records of the trust showing that the trust acquired the Tehiva/Phillips mortgage in 2010 as represented by Smith.

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Fannie Responds to Hawaii’s New Foreclosure Law – Says… WE’RE OUT!

Fannie Responds to Hawaii’s New Foreclosure Law – Says… WE’RE OUT!


Mandelman-

If you’ve been following the goings on in Hawaii as related to SB 651, the state’s new foreclosure law that requires servicers foreclosing non-judicially to produce chain of title documents, including assignments and endorsements prior to scheduling mandatory dispute resolution in front of a mediator, here’s a piece of news you’ll want to hear.

And, even if you haven’t been following the situation pertaining to foreclosures in Hawaii, but you’ve often wondered what the banks would do if they were forced to prove they actually own a home, or represent a trust that holds the actual note, BEFORE foreclosing… you’ll want to hear this too.


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HAWAII – Law’s delay halts foreclosures

HAWAII – Law’s delay halts foreclosures


Staradvertiser-

It will be several months until a key consumer-protection provision of Hawaii’s overhauled foreclosure law can be used. But there has been one immediate impact: a freeze on many new foreclosures and auctions of homes owned by occupants.

The new law, which took effect earlier this month, did not prescribe a foreclosure moratorium, but the law prohibits lenders from holding nonjudicial foreclosure auctions until borrowers have an opportunity to participate in a dispute resolution program.


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ACT 48 | Hawaii New Court Rules to Convert Non-Judicial Foreclosures to Judicial Foreclosures

ACT 48 | Hawaii New Court Rules to Convert Non-Judicial Foreclosures to Judicial Foreclosures


The Temporary Rules, a Certified Conversion Petition form, a form by which co-owners and co-signers may agree to submit the case to the courts, and form judgments are available on the Judiciary’s website.  Because Act 48 became effective May 5, the rules are effective as of that date.  Anyone, however, may propose amendments to the temporary rules by sending an email to pao@courts.state.hi.us or writing to the Judiciary’s Communications and Community Relations office at 417 South King Street, Room 212, Honolulu, HI 96813.

Act 48 specifies that public auctions of real property resulting from non-judicial foreclosures cannot take place on court property. According to the law and effective immediately, non-judicial foreclosure auctions may no longer be held on judiciary grounds and are to be held at state buildings designated by the Department of Accounting and General Services. Judicial foreclosure auctions may continue to be held on court grounds.

[ipaper docId=56062097 access_key=key-qqa5aaky4qvya4y9rbj height=600 width=600 /]

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HAWAII SB651 Foreclosure, Mediation, Dispute Bill

HAWAII SB651 Foreclosure, Mediation, Dispute Bill


This part shall apply to  nonjudicial foreclosures conducted under part II by power of sale, of residential real property that is occupied by one or more mortgagors as a primary residence; provided that this part shall not apply to actions by an association to foreclose on a lien for amounts owed to the association that arise under a declaration filed pursuant to chapter 514A or 514B, or to a mortgagor who has previously participated in dispute resolution under this part for the same property on the same mortgage loan.

[ipaper docId=54109578 access_key=key-2fs3s6lpsn9kt27gps8m height=600 width=600 /]

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Hawaii Foreclosure Face Off

Hawaii Foreclosure Face Off


Honolulu Weekly-

A recent 60 Minutes segment investigated Mortgage Electronic Registration Systems (MERS), a private company that acts as an agent for institutions seeking to speed up the processing of their loan modifications. MERS, which claims to handle about 60 million loans (nearly half of all home loan modifications in the country) with fewer than 50 staff. In an April 2010 lawsuit, the founder of MERS admitted that the untrained and non-certified “notaries” were allowed to illegally notarize hundreds of documents daily, as well as “robo-sign” up to 4,000 foreclosure documents daily.

<SNIP>

“There are increasing reports around the country of wrongful foreclosures,” said Recktenwald. “It is especially important to protect our citizens from fraudulent practices.” Recktenwald referred to states that have passed comprehensive legislation and seen dramatic reductions in foreclosures. “I want to express that this is personal for me. Our home is a sacred meeting place for friends, family and community–not a game piece on a Monopoly board. Why I’ve chosen to make Hawaii my home is that I am joined with fellow stewards of the land. Our love of this land is greater than the greed of Wall Street.”


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Abigail Field | BofA Offers to Help Fix Mortgages…If You’re a State Legislator

Abigail Field | BofA Offers to Help Fix Mortgages…If You’re a State Legislator


Posted 8:45 PM 03/11/11

While nonjudicial foreclosure laws are not known for their excessive generosity, Hawaii’s is particularly draconian. In the Aloha State, it’s possible for homeowners to have their houses foreclosed on and sold for much less than their full value worth, without ever realizing the foreclosure is underway.

The law dates to 1874 and its abusiveness is rooted in effort to take land from native Hawaiians. Legislators have repeatedly tried to get the law changed, but they never seem to succeed.

Banks Versus Legislation

See full article from DailyFinance: http://srph.it/hajtbp


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ALOHA HAWAII! House Approves A Five Month Moratorium On Foreclosures

ALOHA HAWAII! House Approves A Five Month Moratorium On Foreclosures


The Hawaii House of Representatives passes bill HB894 HD1 that would prohibit non-judicial home foreclosures for five months.

“This bill is needed to stop mortgagees who want to rush into foreclosing on homes in Hawaii before appropriate legislation is enacted to deal with the mortgage foreclosure problem,” said Rep. Bob Herkes, chairman of the Committee on Consumer Protection & Commerce. “We don’t want to shut down the mortgage market, but I think we need a timeout.”

This bill allows you time to work it out with your lender or whomever is authorized to approve any settlement.

http://capitol.hawaii.gov/session2011/lists/measure_indiv.aspx?billtype=HB&billnumber=894

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Hawaiian Legislature Seek “Time-Out” 5 Month Moratorium On Foreclosures

Hawaiian Legislature Seek “Time-Out” 5 Month Moratorium On Foreclosures


A bill (HB894 HD1) introduced by Representative Mele Carroll was sent to the House of Reps seeking to impose a five month moratorium on non-judicial foreclosure.

According to Big Island Video News:

“This bill is needed to stop mortgagees who want to rush into foreclosing on homes in Hawaii before appropriate legislation is enacted to deal with the mortgage foreclosure problem,” said Rep. Bob Herkes, chairman of the Committee on Consumer Protection & Commerce. “We don’t want to shut down the mortgage market, but I think we need a timeout.”

Hawaii has one of the worst foreclosure rates in the country. In January, mortgage fraud was cited as the reason why the state’s foreclosure rate is the 11th highest in the nation.

Follow this bill at  http://capitol.hawaii.gov

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Experts Agree On Hawaii Foreclosure Reforms

Experts Agree On Hawaii Foreclosure Reforms


[edit] GUEST COMMENT: Anybody that understands the foreclosure fraud situation and read this document would tell you: REVIEW OF THE HAWAII TASK FORCE REPORT 1/28/11

1. It appears to me that the group was weighted toward lenders/bankers;

2. The report does nothing to address the problems that have been caused by the securitization of mortgages;

3. There is nothing addressing the MERS issue and its subversion of the recordation process;

4. I see nothing that addressed investigating the elimination of non-judicial foreclosures. The recommendations appear to continue the two courses of action (judicial and non-judicial);

5. There was no “out of the box” thinking…just band-aids and hole-plugging. Apparently, Hawaii banks didn’t want to be “painted with the same brush” as mainland banksters; however, all but a couple participated in the securitization feeding frenzi and MERS – and basically didn’t give a damn about the borrower.

More Homeowners Would Have Access To Judge

POSTED: 10:20 am HST January 28, 2011
UPDATED: 1:01 pm HST January 28, 2011

HONOLULU — The state consumer protector said Friday that he was surprised by the consensus between lenders and consumer advocates about several reforms to Hawaii’s foreclosure law that he said will help a lot of people.

Consumer Protector Steven Levins said the recommendations include banning deficiency judgments for people whose homes are lost to nonjudicial foreclosure which is the most often-used process in Hawaii. Nonjudicial foreclosure bypasses the courts in a foreclosure, and is the source of most complaints by consumers, who feel they were not given adequate opportunity to save their homes. Many homeowners who have lost their homes in a nonjudicial foreclosure still must pay the unpaid balance of their mortgage after the foreclosure.

Levins said the proposed reform would not only ban deficiency judgments, but it would allow homeowners to choose to go through judicial foreclosure, which is overseen by a circuit court judge. While that may help protect the homeowners’ rights, Levins said, under judicial foreclosure, the homeowner could still face a deficiency judgment.

The major benefit of judicial oversight is that homeowners would be protected from unethical, illegal or improper procedures by lenders, which he said have become a serious problem with the volume of foreclosures in a Hawaii, many serviced by Mainland lenders.

“We gotta add some humanity to the equation,” said Sen. Brickwood Galuteria.

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‘Toxic’ mortgages crush couple’s dream

‘Toxic’ mortgages crush couple’s dream


Via Virginia Parsons w/ Comment:

Let me also add – this couple, who are visually impaired, could not read the loan documents.  There are no laws to protect them that might make it mandatory for the loan documents to be read aloud.  And as we are all well aware, loan documents are not provided in advance of signing for any attorney or accountant to review.

Blind man, woman file a countersuit, saying predatory practices hurt them

December 19, 2010 – By HARRY EAGAR, Staff Writer

KIHEI – Across the country, a few of the millions of people who have had their homes foreclosed are counterattacking in the courts. One of the Maui suits involves Wilmer Galiza and his wife, Flordeliza Tapat. Many Mauians know them.

Both are members of Blind Vendors of Hawaii. Galiza operates the snack shop at Maui Memorial Medical Center (and formerly ran the one at the courthouse), and Tapat runs the one at Kalana O Maui, the main county building in Wailuku.

In 2005, they had owned a home in Dream City for eight years. Galiza’s brother next door wanted to sell his bigger home, and he and mortgage broker Eric Miyajima urged the couple to keep their small house and buy the bigger one. By living in the big house and renting out the small house and three apartments in the big one, they were told they could build up assets for their retirement.

That dream didn’t work out. They’ve been foreclosed on both houses. Their credit is damaged, and although they continue to live in the second house, which is specially equipped for their needs, they face the threat of eviction at any time.

Their case offers an example of just about everything that could go wrong during the mortgage run-up and run down, according to their attorney, Jim Fosbinder: unrecorded transfers of deeds, predatory bait-and-switch offers, failure to disclose required information to borrowers, promises of assistance that never came; stonewalling their attempts to modify not one but two mortgages; robosigners; and missing documents.

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FULL DEPOSITION OF BANK OF AMERICA ROBO SIGNER RENEE D. HERTZLER

FULL DEPOSITION OF BANK OF AMERICA ROBO SIGNER RENEE D. HERTZLER


Be sure to catch the Full Depo of Renee Hertzler below after AP Alan Zibel’s article

Bank of America delays foreclosures in 23 states

By ALAN ZIBEL, AP Real Estate Writer Alan Zibel, Fri Oct 1, 7:46 pm ET

WASHINGTON – Bank of America is delaying foreclosures in 23 states as it examines whether it rushed the foreclosure process for thousands of homeowners without reading the documents.

The move adds the nation’s largest bank to a growing list of mortgage companies whose employees signed documents in foreclosure cases without verifying the information in them.

Bank of America isn’t able to estimate how many homeowners’ cases will be affected, Dan Frahm, a spokesman for the Charlotte, N.C.-based bank, said Friday. He said the bank plans to resubmit corrected documents within several weeks.

Two other companies, Ally Financial Inc.’s GMAC Mortgage unit and JPMorgan Chase, have halted tens of thousands of foreclosure cases after similar problems became public.

The document problems could cause thousands of homeowners to contest foreclosures that are in the works or have been completed. If the problems turn up at other lenders, a foreclosure crisis that’s already likely to drag on for several more years could persist even longer. Analysts caution that most homeowners facing foreclosure are still likely to lose their homes.

State attorneys general, who enforce foreclosure laws, are stepping up pressure on the industry.

On Friday, Connecticut Attorney General Richard Blumenthal asked a state court to freeze all home foreclosures for 60 days. Doing so “should stop a foreclosure steamroller based on defective documents,” he said.

And California Attorney General Jerry Brown called on JPMorgan to suspend foreclosures unless it could show it complied with a state consumer protection law. The law requires lenders to contact borrowers at risk of foreclosure to determine whether they qualify for mortgage assistance.

In Florida, the state attorney general is investigating four law firms, two with ties to GMAC, for allegedly providing fraudulent documents in foreclosure cases .The Ohio attorney general this week asked judges to review GMAC foreclosure cases.

Mark Paustenbach, a Treasury Department spokesman, said the Treasury has asked federal regulators “to look into these troubling developments.”

A document obtained Friday by the Associated Press showed a Bank of America official acknowledging in a legal proceeding that she signed up to 8,000 foreclosure documents a month and typically didn’t read them.

The official, Renee Hertzler, said in a February deposition that she signed 7,000 to 8,000 foreclosure documents a month.

“I typically don’t read them because of the volume that we sign,” Hertzler said.

She also acknowledged identifying herself as a representative of a different bank, Bank of New York Mellon, that she didn’t work for. Bank of New York Mellon served as a trustee for the investors holding the homeowner’s loan.

Hertzler could not be reached for comment.


CONTINUE READING…..YAHOO

.

FULL DEPOSITION OF RENEE HERTZLER BELOW:

[ipaper docId=38902529 access_key=key-1iju4izmwpbrhvru9u14 height=600 width=600 /]

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