REPORT TITLE:
Mortgages; Late Fees


DESCRIPTION:
Sets limits on late fees for residential mortgages.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                            896         
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO MORTGAGES.



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

 1      SECTION 1.  The purpose of this Act is to establish a limit
 
 2 on late fees that mortgage lenders can impose on residential
 
 3 mortgages.  At present, there is no such limit, and some mortgage
 
 4 lenders charge excessive late fees.  The legislature does not
 
 5 believe that late fees should be used as profit centers for
 
 6 mortgage lenders, and that it is appropriate to impose a
 
 7 reasonable limit on such fees.
 
 8      SECTION 2.  Chapter 412, Hawaii Revised Statutes, is amended
 
 9 by adding a new section to be appropriately designated and to
 
10 read as follows:
 
11      "�412:   -     Mortgage late fees.  After the effective date
 
12 of this Act, each new or renewed mortgage contract for a mortgage
 
13 secured by residential real estate located in this State shall
 
14 not be subject to a late fee payment exceeding the following
 
15 schedule:
 
16      (1)  For monthly mortgage payments of up to and including
 
17           $400, five per cent of the monthly payment, up to a
 
18           maximum of $20 per late fee; or
 
19      (2)  For monthly mortgage payments exceeding $400 per month,
 

 
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                                     H.B. NO.           
                                                        
                                                        

 
 1           $20 for the first $400 of the monthly payment, and one-
 
 2           half per cent of the amount of the monthly payment
 
 3           exceeding $400."
 
 4      SECTION 3.  New statutory material is underscored.
 
 5      SECTION 4.  This Act shall take effect upon its approval.
 
 6 
 
 7                           INTRODUCED BY:  _______________________