Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 2927, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to allow the state and county housing agencies to protect their equity interests in non-judicial foreclosures of public housing properties.

The bill also clarifies the priority of a housing agency's liens in a foreclosure, and authorizes the agency to purchase a foreclosed property by credit bid.

Your Committee finds that the sale of affordable housing properties sponsored or assisted by the Housing and Community Development Corporation of Hawaii and county housing agencies are subject to a buyback restriction, a shared appreciation equity, and other types of liens. Additionally, the Housing and Community Development Corporation of Hawaii and county housing agencies have provided deferred sales price mortgages to assist low or moderate-income homebuyers in purchasing a first home.

These government interests, however, are not protected in a non-judicial foreclosure of affordable housing properties. The Corporation and county housing agencies do not receive sufficient notice of such foreclosure proceedings to adequately prepare bid authorizations to protect these equity interests.

This bill provides the Housing and Community Development Corporation of Hawaii and county agencies with thirty-days notice of non-judicial foreclosures so that they may participate in the proceedings. By doing so, the Corporation and county housing agencies can recoup the value of otherwise lost equity interests to build more affordable housing projects or allow the foreclosed property to be re-sold to other first-time homebuyers, including renters participating in homeownership option programs.

Your Committee has amended the bill by extending the effective date to July 1, 2020, to allow for more discussion on this measure.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2927, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2927, S.D. 2.