STAND. COM. REP. NO.  278-12

 

Honolulu, Hawaii

                , 2012

 

RE:   H.B. No. 2103

      H.D. 1

 

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Sixth State Legislature

Regular Session of 2012

State of Hawaii

 

Sir:

 

     Your Committees on Economic Revitalization & Business and Housing, to which was referred H.B. No. 2103 entitled:

 

"A BILL FOR AN ACT RELATING TO THE BANK OF THE STATE OF HAWAII,"

 

beg leave to report as follows:

 

     The purpose of this measure is to establish the bank of the State of Hawaii in order to develop a program to acquire residential property in situations where the mortgagor is an owner-occupant who has defaulted on a mortgage or been denied a mortgage loan modification and the mortgagee is a securitized trust that cannot adequately demonstrate that it is a holder in due course.

 

     Faith Action for Community Equity, IMUAlliance, and numerous individuals testified in support of this measure.  The Department of Budget and Finance and Legal Aid Society of Hawaii testified in support of the intent of this measure.  The Hawaii Bankers Association, Hawaii Credit Union League, and the Mortgage Bankers Association of Hawaii testified in opposition to this measure.  The Department of Commerce and Consumer Affairs and Office of Information Practices provided comments on this measure.

 

     Your Committees respectfully request that the Committee on Consumer Protection & Commerce examine the concerns expressed by the Department of Commerce and Consumer Affairs over the qualifications of the board of directors.  Your Committees further request that the Committee on Consumer Protection & Commerce examine making the acquisition of affordable housing for persons who have experienced wrongful and fraudulent foreclosures the priority of the bank of the State of Hawaii.

 

     Your Committees have amended this measure by:

 

     (1)  Expanding the scope of the bank of the State of Hawaii's purchase program so that it is not limited to assisting only in the case of mortgages held by securitized trusts;

 

     (2)  Inserting language to allow officers of banks and credit unions incorporated in the State to serve the advisory board;

 

     (3)  Clarifying that advisory board members' participation on loan committees shall be pursuant to rules adopted by the board;

 

     (4)  Clarifying that the bank of the State of Hawaii is not meant to compete with local banks by removing a reference to offering financial products to a state agency on a competitive basis;

 

     (5)  Clarifying that the bank of the State of Hawaii's power to purchase participation interest in loans must meet underwriting standards established by the board of the bank of the State of Hawaii;

 

     (6)  Renaming the short sale program to the purchase program for distressed residential properties encumbered by problematic mortgages;

 

     (7)  Inserting language to clarify that the bank of the State of Hawaii has forty-five days to review a homeowner's application for consideration for the purchase program;

 

     (8)  Inserting language to allow the bank of the State of Hawaii to re-sell the home back to the previous homeowner without a mortgage;

 

     (9)  Changing the effective date to July 1, 2112, to facilitate further discussion; and

 


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

 

     As affirmed by the records of votes of the members of your Committees on Economic Revitalization & Business and Housing that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 2103, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 2103, H.D. 1, and be referred to the Committee on Consumer Protection & Commerce.

 

Respectfully submitted on behalf of the members of the Committees on Economic Revitalization & Business and Housing,

 

 

____________________________

RIDA T.R. CABANILLA, Chair

 

____________________________

ANGUS L.K. McKELVEY, Chair