The State Judiciary has notified attorneys working for banks, mortgage companies and other lenders that they will no longer be allowed to hold foreclosure auctions on court property unless the foreclosure is done as part of a court proceeding.
Non-judicial foreclosures, in which a lender auctions off a home or apartment under authority buried in the fine print on the mortgage documents, is favored by some lenders, and certain condominium associations, because it can be done much faster than a traditional foreclosure lawsuit.
However, the non-judicial foreclosure process gives only minimal notice to property owners and has been assailed as a violation of homeowners rights. Many attorneys will not handle non-judicial foreclosures because of the problems involved.
According to a press release issued by the courts earlier this month and posted on the Hawaii State Bar Association web site:
“Non-judicial foreclosure auctions occur as a result of contractual provisions, not judicial actions, and because the auction is not an action ordered by the court, there is no reason to conduct the activity on court grounds,” explained Administrative Director of the Courts, Thomas R. Keller. “Furthermore, because a non-judicial foreclosure auction is triggered by a provision in a private dispute, the court does not want to give the impression that it sanctions the activity.”
I ran across a 2002 presentation comparing judicial and non-judicial foreclosures prepared by attorney Kirk Caldwell, now Honolulu managing director and candidate for mayor.
And while looking at the Bar Association information, I noticed another item of interest–A June 9, 2010 order signed by Chief Justice Ronald Moon rescinding all statewide administrative orders and memos issued by the court administration.
Moon’s order affects all statewide circuit, family, and district court administrative orders or memoranda. All were rescinded when the order was filed.
A further clarification was added by the HSBA.
According to Moon’s order, the administrative memos had not been submitted for his review, a procedure which he had called for more than two years ago.
Is this some kind of internal power struggle or simply an administrative screw-up? It seems unusual for the court to have to intervene not once, but twice, regarding these administrative orders, and then take the radical step of throwing them all out, so I’ll bet on the former.
Although both these orders were circulated to the Bar Association, neither appears among the list of Judiciary press releases.
Comments from those with more perspective on what’s happening in the Judiciary would be appreciated.
This is great news. The lenders have been playing all sorts of games with people and their houses using the formality of procedures and legal jargon to get people out of their houses.
Judges have started to demand lenders actually bring copies of promissory notes to court and in many cases, these lenders can’t and the judge throws out the foreclosure. Having these non-judicial auctions at the courthouse should be considered a deceptive trade practice against the lender.
Perhaps there is some connection to the fact that the Chief Judge’s tenure runs out in a few weeks as he approaches mandatory retirement at his 70th birthday.
Apparently the word has never drifted across here to Kauai. Or don’t the “steps of the court house” count?