STAND. COM. REP. NO. 3322

Honolulu, Hawaii

RE:    H.B. No. 2326

       H.D. 2

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

Madam:

     Your Committee on Judiciary and Labor, to which was referred H.B. No. 2326, H.D. 2, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO MORTGAGES,"

begs leave to report as follows:

     The purpose of this measure is to enact a new chapter, known as the Mortgage Rescue Fraud Prevention Act, to regulate distressed property consultants and their practices and contracts.

     Your Committee received testimony in support of this measure from the Department of Commerce and Consumer Affairs, Hawaii Association of Realtors, Hawaii Financial Services Association, and Legal Aid Society of Hawai‘i.

     This measure is intended to protect Hawaii consumers from persons who prey on homeowners facing property foreclosures, liens, or encumbrances.  These distressed property consultants, known as "mortgage rescuers", charge a high fee and often do little or no work, and employ deceptive tactics that sometimes eventuate in the homeowner having to deed their property to the mortgage rescuer.  This measure addresses both forms of trickery by requiring the consultants to provide homeowners with a written contract spelling out their services and by giving the homeowner the right to cancel at any time before the services are actually performed.

     As affirmed by the record of votes of the members of your Committee on Judiciary and Labor that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2326, H.D. 2, S.D. 1, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Judiciary and Labor,

____________________________

BRIAN T. TANIGUCHI, Chair