§480E-2 Definitions. As used in this chapter, unless the context otherwise requires:
"Consideration" means any payment or thing of value provided to an owner of a distressed property, including reasonable costs paid to independent third parties necessary to complete the distressed property conveyance or payment of money to satisfy a debt or legal obligation of an owner of the distressed property. "Consideration" shall not include any amounts paid or to be paid directly or indirectly to the distressed property purchaser, including amounts identified as "gift equity", "fees", "escrow", or "down payment".
"Distressed property" means any residential real property that:
(1) Is in foreclosure or at risk of foreclosure because payment of any loan that is secured by the residential real property is more than sixty days delinquent;
(2) Had a lien or encumbrance charged against it because of nonpayment of any taxes, lease assessments, association fees, or maintenance fees;
(3) Is at risk of having a lien or encumbrance charged against it because the payments of any taxes, lease assessments, association fees, or maintenance fees are more than ninety days delinquent;
(4) Secures a loan for which a notice of default has been given;
(5) Secures a loan that has been accelerated; or
(6) Is the subject of any solicitation, representation, offer, agreement, promise, or contract to perform any mortgage assistance relief service.
"Distressed property consultant" means any person who performs or provides, or attempts to perform or provide, or who arranges for others to perform or provide, or who assists others to perform or provide, or who makes any solicitation, representation, or offer to perform or provide, any mortgage assistance relief service.
"Distressed property consultant" shall not include any of the following:
(1) A person or the person's authorized agent acting under the express authority or written approval of the federal Department of Housing and Urban Development;
(2) A person who holds or is owed an obligation secured by a lien on any distressed property, or a person acting under the express authorization or written approval of such person, when the person performs services in connection with the obligation or lien, if the obligation or lien did not arise as the result of or as part of a proposed distressed property conveyance;
(3) Banks, savings banks, savings and loan associations, credit unions, trust companies, depository and nondepository financial service loan companies, and insurance companies organized, chartered, or holding a certificate of authority to do business under the laws of this State or any other state, or under the laws of the United States;
(4) Attorneys licensed in the State of Hawaii engaged in the practice of law;
(5) Certified public accountants licensed under chapter 466, persons holding a permit to practice public accountancy in the State of Hawaii, and persons holding a valid certified public accountant license issued under the laws of another state or territory who are lawfully practicing in the State of Hawaii with a temporary permit to practice pursuant to rules established by the board of public accountancy and who are subject to regulation by the board of public accountancy while engaged in the practice of public accountancy;
(6) A federal Department of Housing and Urban Development approved mortgagee and any subsidiary or affiliate of these persons or entities, and any agent or employee of these persons or entities, while engaged in the business of these persons or entities;
(7) A nonprofit organization that, pursuant to chapter 446, offers counseling or advice to an owner of a distressed property, if the nonprofit organization has no contract or agreement for services with lenders, distressed property purchasers, or any person who effects loans or distressed property purchases; or
(8) A person currently licensed as an active real estate broker or real estate salesperson in Hawaii pursuant to chapter 467, when acting in the capacity of a real estate broker or real estate salesperson in accordance with customary industry standards.
"Distressed property consultant contract" means any agreement or obligation between an owner or agent of an owner of a distressed property and a distressed property consultant.
"Distressed property conveyance" means the transfer of any interest in a distressed property effected directly or indirectly by or through a distressed property consultant.
"Distressed property conveyance contract" means any agreement or obligation affecting a distressed property conveyance.
"Distressed property lease" means any agreement or obligation regarding the lease or rental of a distressed property effected directly or indirectly by or through a distressed property consultant or distressed property purchaser.
"Distressed property owner" or "property owner" means the owner of any distressed property.
"Distressed property purchaser" means any person who acquires any interest in a distressed property directly or indirectly through a distressed property conveyance or distressed property conveyance contract.
"Fully performed" means:
(1) In the case of relief requiring the consent of any lending party, the distressed property consultant or attorney has:
(A) Carried out and provided all of the services the distressed property consultant or attorney contracted to perform or represented would be performed; and
(B) Obtained from the lending party a written offer for mortgage assistance relief that the consumer has accepted by executing the written contract.
(2) In the case of relief requiring the consent of any non-lending party, including any person that may hold a lien or encumbrance against any residential real property, the distressed property consultant or attorney has:
(A) Carried out and provided all of the services the distressed property consultant or attorney contracted to perform or represented would be performed; and
(B) Obtained from the non-lending party a written offer for mortgage assistance relief that the consumer has accepted by executing the written contract.
(3) In all other cases, being instances where consent is not obtained as the result of a mortgage assistance relief service, the property owner obtains the desired relief from a court of law, which includes a favorable determination that the mortgage assistance relief service conferred a benefit upon the property owner and is therefore compensable.
"Lending party" means the person from whom mortgage assistance relief is sought and includes the residential loan holder or servicer.
"Material" means likely to affect a consumer's choice of, or conduct regarding, any mortgage assistance relief service.
"Material fact" DELETED.
"Mortgage assistance relief service" means any service, plan, or program that is offered or provided to the consumer in exchange for consideration and is represented, expressly or by implication, to assist or attempt to assist the consumer with any of the following:
(1) Stopping, preventing, or postponing the loss of any residential real property, whether by mortgage or deed or trust foreclosure sale or repossession, or otherwise saving any consumer's residential real property from foreclosure or repossession;
(2) Stopping, preventing, or postponing the charging of any lien or encumbrance against any residential real property or reducing or eliminating any lien or encumbrance charged against any residential real property for the nonpayment of any taxes, lease assessments, association fees, or maintenance fees;
(3) Saving the owner's property from foreclosure or loss of home due to nonpayment of taxes;
(4) Negotiating, obtaining, or arranging any modification of any term of a residential loan, including a reduction in the amount of interest, principal balance, monthly payments, or fees;
(5) Negotiating, obtaining, or arranging any extension of the period of time within which the consumer may:
(A) Cure the default on a residential loan;
(B) Reinstate the residential loan;
(C) Redeem any residential real property; or
(D) Exercise any right to reinstate a residential loan or redeem a residential real property;
(6) Negotiating, obtaining, or arranging, with respect to any residential real property:
(A) A short sale;
(B) A deed-in-lieu of foreclosure; or
(C) Any other disposition of the property other than a sale to a third party who is not the residential loan holder;
(7) Obtaining any forbearance or modification in the timing of payments from any residential loan holder or servicer;
(8) Obtaining any forbearance from any beneficiary or mortgagee, or any relief with respect to a tax sale of any residential real property;
(9) Obtaining any waiver of an acceleration clause or balloon payment contained in any promissory note or other contract secured by a mortgage on any residential real property or contained in the mortgage;
(10) Obtaining any extension of the period within which the owner may reinstate the owner's rights with respect to the owner's property;
(11) Obtaining a loan or advance of funds while the consumer is in foreclosure or at risk of foreclosure due to nonpayment of any obligation related to a residential real property, including but not limited to one or more loans, taxes, lease assessments, association fees, or maintenance fees;
(12) Obtaining a loan or advance of funds during any post-tax sale redemption period;
(13) Considering or deciding whether a consumer should continue making payments on any loan, taxes, lease assessments, association fees, or maintenance fees or any other obligation related to a residential real property;
(14) Exercising any cure of default;
(15) Avoiding or ameliorating the impairment of the property owner's credit resulting from the recording or filing of a notice of default or the conduct of a foreclosure sale or tax sale;
(16) Drafting, preparing, performing, creating, or otherwise obtaining a forensic loan audit, a forensic securitization audit, or any other type of audit, report, summary, affidavit, or declaration involving an opinion, determination, or analysis of whether a lending party has an enforceable mortgage or lien, predicated upon claims that a lending party that is a party to a pooling and service agreement failed to adhere to the terms of that agreement, or that errors occurred after the signing of the mortgage loan, or disputing whether the lending party is the holder of the promissory note, or any argument that the lending party has failed to comply with federal or state mortgage lending laws;
(17) Drafting, preparing, performing, creating, or otherwise obtaining any documentation used or intended to be used to advance any legal theory in defense of a foreclosure or ejectment action, regardless of any disclaimer as to providing legal advice; or
(18) Understanding any legal theory that may be used in defense of a foreclosure or ejectment action, regardless of any disclaimer as to providing legal advice.
"Person" means any individual, partnership, corporation, limited liability company, association, or other group or entity, however organized.
"Residential loan" means any loan that is secured by a mortgage against residential real property, regardless of whether the property owner lacks sufficient equity in the property so as to render the loan partially or entirely unsecured.
"Residential loan holder" means any person who holds the residential loan that is the subject of the offer to provide mortgage assistance relief services.
"Residential real property" means any fee simple or leasehold real property wherever located, the primary use of which is occupancy as a residence by any natural person or persons, regardless of whether the property owner resides on the property.
"Servicer" means the person responsible for:
(1) Receiving any scheduled periodic payments pursuant to the terms of the residential loan that is the subject of the offer to provide mortgage assistance relief services; and
(2) Making the payments of principal and interest and such other payments with respect to the amounts received from the consumer as may be required pursuant to the terms of the mortgage servicing loan documents or servicing contract. [L 2008, c 137, pt of §2; am L 2009, c 66, §2 and c 73, §2; am L 2014, c 26, §1; am L 2016, c 142, §3]