REPORT TITLE:
Housing


DESCRIPTION:
Establishes the Housing and Community Development Corporation of
Hawaii as a mortgage lender under the Hula Mae program in order
to provide refinancing to Hawaii residents.  (SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        289
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                     A BILL FOR AN ACT

RELATING TO HOUSING.


BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The legislature finds that mortgagors in Hawaii
 
 2 are often unable to qualify for refinancing of the mortgage for
 
 3 their principle residence.  The legislature further finds that
 
 4 because Hawaii lenders are opposed to the passage of an act
 
 5 requiring automatic refinancing for all Hawaii residents under
 
 6 certain conditions, the State must address the problem.
 
 7      The purpose of this Act is to designate the housing and
 
 8 development corporation of Hawaii as a mortgage lender under the
 
 9 hula mae program which shall refinance primary residential
 
10 mortgages of state citizens subject to a cap of $250,000 per
 
11 residence.
 
12      SECTION 2.  Chapter 201G, Hawaii Revised Statutes, is
 
13 amended by adding a new section to part III.B to be appropriately
 
14 designated and to read as follows:
 
15      "§201G-    Rules; refinancing loan program.  (a)  An
 
16 eligible borrower shall utilize the financing obtained under this
 
17 part for the eligible borrower's permanent primary residence.
 
18      (b)  From time to time, the corporation may submit a
 
19 verification of owner-occupancy form to the eligible borrower.
 
20 Failure to respond to this verification in a timely manner may
 

 
Page 2                                                     289
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1 result in an immediate escalation of the interest rate or
 
 2 acceleration of the eligible refinancing loan.
 
 3      (c)  For eligible borrowers who later experience financial
 
 4 difficulty and must sell or transfer title to their property, the
 
 5 corporation may grant a waiver of subsection (a) for a period not
 
 6 to exceed one year and for reasons set forth in section 201G-129
 
 7 on a case-by-case basis.
 
 8      (d)  The corporation shall establish requirements for
 
 9 property financed by an eligible refinancing loan, and may
 
10 consider the location, age, condition, and other characteristics
 
11 of the property.  At a minimum, the requirements shall include
 
12 that:
 
13      (1)  The mortgagor's first mortgage payments be current; and
 
14      (2)  The mortgagor's application for refinancing has been
 
15           rejected by a private financial institution.
 
16      (e)  The corporation shall establish restrictions on the
 
17 terms, maturities, interest rates, collateral, and other
 
18 requirements for eligible refinancing loans.
 
19      (f)  The corporation shall restrict eligible refinancing
 
20 loans to an amount no more than $250,000 per property.
 
21      (g)  The corporation shall establish restrictions on the
 
22 transfer of ownership of the properties securing eligible
 
23 refinancing loans.
 

 
Page 3                                                     289
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1      (h)  All eligible loans made shall comply with applicable
 
 2 state and federal laws.
 
 3      (i)  Funds under this section shall not be available to
 
 4 private financial institutions.
 
 5      (j)  Hawaii residents who apply for refinancing under this
 
 6 section shall have priority over nonresidents.
 
 7      (k)  Not more than fifty per cent of the available funding
 
 8 for this chapter shall be made available for the refinancing
 
 9 program."
 
10      SECTION 3.  Section 201G-181, Hawaii Revised Statutes, is
 
11 amended by adding a new definition to be appropriately inserted
 
12 and to read as follows:
 
13      ""Eligible refinancing loan" means a loan made to replace an
 
14 existing obligation on a permanent primary residence."
 
15      SECTION 4.  Section 201G-181, Hawaii Revised Statutes, is
 
16 amended by amending the definition of "housing loan programs" to
 
17 read as follows:
 
18      ""Housing loan programs" includes all or any part of the
 
19 loan to lenders program, the purchase of existing loans program,
 
20 the advance commitments program, the refinancing loan program,
 
21 and the loan funding programs authorized under this part."
 
22      SECTION 5.  New statutory material is underscored.
 
23      SECTION 6.  This Act shall take effect upon its approval.