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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.

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.

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