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Straight Talk from the Capitol

February 17, 2011
Senator Roz Baker

During the past two weeks, the Senate began the confirmation process for Gov. Abercrombie’s nominees for various cabinet and judicial positions.

Confirming pivotal positions. My Commerce and Consumer Protection Committee (CPN) confirmed Keali‘i Lopez as Director of Department of Commerce and Consumer Affairs. Testimony supporting Ms. Lopez, former CEO of Olelo, the country’s largest community media center, was overwhelmingly positive, noting personal attributes of integrity, leadership and successful stewardship of Olelo’s resources.

Shortly, we’ll take up the nomination of former Kaua‘i Rep. Mina Morita as the first woman chair of the Public Utilities Commission (PUC). This will be the first time in many years that a PUC Commissioner has called a Neighbor Island “home.”

Restructuring the PUC. Recently, my committee advanced Bill SB99 to restructure the PUC and add more commissioners. This move will help insure the PUC won’t remain O‘ahu-centric in dealing with neighbor island issues such as inter-island barge service and energy matters that significantly affect Maui County.

Current hearings on hot button issues. Legislative committees are conducting hearings on a variety of topics and constituent concerns ranging from the decriminalization of marijuana, health insurance and ID theft to rules implementing the voters’ directive for an appointed Board of Education. Also being discussed are measures to support small businesses, create jobs and help struggling homeowners stay in their homes. Any bill referred to more than one committee must receive favorable action by Friday, Feb. 18, to advance to the next committee.

Help for struggling homeowners. My committee heard several bills relating to the foreclosure process and passed out two important measures that I introduced. The first is SB652, which implements the recommendations of the Mortgage Foreclosure Task Force to improve transparency and help borrowers. A key feature gives a residential owner-occupant the ability to convert from a non-judicial foreclosure to a judicial foreclosure, which will allow court oversight of the process but allow lenders to seek a deficiency judgment. If the non-judicial route is followed, no deficiency judgment is allowed.

The second bill, SB651, may have a greater impact for homeowners. It establishes a dispute resolution program that mirrors the successful Nevada program to help homeowners remain in their homes.

Some highlights include:

• Borrowers will be advised of their right to enter into dispute resolution with their lender when a notice of default or non-judicial foreclosure is received. Borrowers will have 30 days to opt into the program.

• Once in, all foreclosure actions will halt and both lenders and borrowers must comply with program rules. A lender representative must have the authority to make a decision on a loan modification or other action approved by the facilitator to resolve the dispute.

• SB 651 recommends a $400 dispute resolution fee—split equally between the parties—and a filing fee for certain foreclosures to fund the program.

• There will be a six-month moratorium of all foreclosures affecting residential owner-occupants during the program’s initiation. Facilitators will need to be trained and borrower/lender forms, provided.

I believe this program will help residential consumers get a fair shake from their lenders and stop the runaround too many homeowners experience with mainland institutions. Through its thoughtful design, this important new program will avoid clogging our courtrooms or adding to the caseload of judges.

AOAO lien foreclosure actions are not affected. Neither SB 651 nor SB 652 affects condominium or homeowner association lien foreclosures to recover delinquent fees—they are expressly excluded in both bills.

Mahalo to Faith Action for Community Equity (FACE) and FACE-Maui for their assistance in crafting SB 651, SD1 and providing excellent testimony at our hearing. I’ve asked our Ways and Means Committee to expedite this bill. Hopefully, the House will move quickly, too, so a moratorium can be in place in March.



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