STAND. COM. REP. NO. 744

Honolulu, Hawaii

, 2005

RE: H.B. No. 785

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 785 entitled:

"A BILL FOR AN ACT RELATING TO MORTGAGE FORECLOSURES,"

begs leave to report as follows:

The purpose of this bill is to add provisions governing foreclosure by power of sale, or non-judicial foreclosure, to the time share plan law in chapter 514E, Hawaii Revised Statutes (HRS).

Your Committee received testimony in support of this bill from ARDA-Hawaii, Cendant Timeshare Resort Group, Inc., Fairfield Resorts, Inc., Marriott International, Inc., Old Republic Title Company, Pahio Resorts, and Starwood Vacation Ownership. The Time Share Program of the Department of Commerce and Consumer Affairs offered comments.

Your Committee finds that a person who owns a time share interval has the right to use a time share unit for a specified period of time during the year. Foreclosure of a time share interest involves amounts from $3,000 to $10,000, and does not remove an individual from the individual's home or permanent residence. The cost of pursuing a judicial foreclosure of a time share interest, frequently exceeds the amount ultimately received.

This measure will afford time share associations or lenders the ability to foreclose by way of a non-judicial process, which is not as lengthy and cost-prohibitive as a judicial process.

While this measure offers benefits to time share associations, your Committee has concerns about the appropriateness of inserting language regarding foreclosure procedures into chapter 514E, HRS, the purpose of which is to register time share companies and set requirements regarding certain disclosures for consumer protection.

In light of these concerns, your Committee has amended this bill by:

(1) Adding the new timeshare foreclosure under power of sale provisions to chapter 667, HRS, the mortgage foreclosures law, rather than to chapter 514E, HRS;

(2) Including an effective date of July 1, 2099, to facilitate further discussion; and

(3) Making technical, nonsubstantive amendments for purposes of clarity, consistency, and style.

As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 785, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 785, H.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,

 

____________________________

KENNETH HIRAKI, Chair