The Hawaii Legislature is currently working to correct the unintended consequences of the Mortgage Fraud Prevention Act (Act 137) from last year. The intention of the law was to protect homeowners from predators taking advantage of those behind on their mortgage payments and/or HOA maintenance fees.
The law defines a “Distressed Property” and defines “Distressed Property Consultants”. The law places restrictions on companies and individuals that promise to stop a foreclosure or modify the loan, sometimes even taking title to the property.
The problem with the law is that it fails to exclude real estate professionals from the definition of “Distressed Property Consultant”. The law exempts lenders, attorneys and credit counseling services but not the very people that may be most able to help the homeowner! Act 137 confused and discouraged Hawaii’s real estate professionals from assisting homeowners.
Real estate professionals can assist by counseling the homeowner on the foreclosure process, the options that may be available and provide a realistic value of the property. If the best solution is to sell the home and negotiate a short sale with the owners’ lender(s), the owner needs a real estate professional.
All real estate professionals, however, are not experienced in this area and reading the testimony opposing SB 34 reflects that fact. Some owners of “Distressed Properties” were ill served by agents that lacked experience and on-the-job training was disastrous.
This is unfortunate, but not a reason to discourage qualified real estate professionals from offering the guidance and assistance that “Distressed Property” owners need most.
Walt Harvey is a real estate broker with East Oahu Realty. Walt partners with his wife Arla and together they specialize in residential, commercial and investment real estate. You can reach them on their website: www.coastalhawaii.com. Real estate question? E-mail them: mailto:walt@coastalhawaii.com or call 375-8959 or toll free at 866-773-3351
