Fighting HOA, Condo foreclosure injustice in Hawaii

By Deborah Goonan, Independent American Communities

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Association Governed Housing stakeholders in Hawaii might be forced to compensate at least 160 former condominium owners for wrongful foreclosures conducted in the state over a 6-year period.

According to an article published in Civil Beat, a team of attorneys in Hawaii and San Diego have filed a consumer protection class action lawsuit against two Condo Association law firms and 72 condominium associations.

The complaint claims that condominium associations erred in using a Non Judicial Foreclosure “Part I” process reserved for use by mortgage lenders when the loan contains a “power of sale” clause. According to lead attorney for Plaintiffs, Steven K.S. Chung, Condominium Associations were legally obligated to pursue “Part II” Non Judicial Foreclosure procedures written specifically for condominium associations, a process that offers considerably higher levels of consumer protection, and opportunity for apartment owners to avoid losing their property in HOA foreclosure.

According to the suit, class action lead plaintiffs lost their condo units following inadequate notice of foreclosure sale. The law firms initiating the Non Judicial Foreclosures on behalf their client condo associations acquired the apartment units at their own foreclosure sales, then took possession of the deeds for those properties for pennies on the dollar, leaving the condo owners on the hook for the outstanding mortgage debt.

The suit alleges that if the condo associations and their law firms had followed the correct foreclosure process, owners would have had the opportunity to keep their apartments. Alternatively, if adequate foreclosure notice had failed to stop the sale at auction, the apartment owner’s underlying mortgage on the property would have been satisfied by the sale.

The suit seeks monetary damages including compensatory and punitive damages for all 160 members of the class, plus any additional members that may seek to claim similar damages.

If the class action suit is permitted to proceed in court, experts claim total damages could be millions of dollars, which could ultimately bankrupt condo associations that engaged in wrongful Non Judicial Foreclosures and violations of the Fair Debt Collection Practices Act.

This is one case to follow closely.

 

Ian Lind: Wrongful Foreclosure Claims Rock The Condo World
A class-action lawsuit alleges at least 160 individuals had their property illegally foreclosed by 72 condominium associations.
AUGUST 31, 2016 · By Ian Lind Civil Beat Columnist

A class action lawsuit recently filed in federal court accuses two prominent law firms, and more than 70 condominium associations they represent, of “the wrongful and unlawful sale” of condominium units through an improper foreclosure process.

Nonjudicial foreclosures allow real property to be sold to satisfy debts without going to court. Instead, the party initiating the foreclosure, typically a mortgage lender, is simply required to notify the property owner and, if the debt isn’t paid, proceed to auction off the property themselves, selling to the highest bidder.

The lawsuit was filed in Honolulu’s Federal District Court on Aug.10 by Steven K.S. Chung and two other attorneys associated with the law firm of Imanaka Asato, along with two San Diego-based firms, Blood Hurst & O’Reardon, and Cohelan Khoury & Singer.

Named as defendants are Porter McGuire Kiakona & Chow LLP, and Ekimoto & Morris LLLP, both leading island law firms that specialize in condominium law. The firms have been acknowledged leaders in using nonjudicial foreclosure procedures, rather than the traditional route of court-supervised foreclosures.

The lawsuit identifies what it alleges are at least 160 individuals who had their property illegally foreclosed by 72 condominium associations represented by the Porter and Ekimoto law firms, and asks the court to certify these plaintiffs and defendants as part of potentially larger classes of similarly placed parties.

If the lawsuit is not dismissed during the initial rounds of litigation, it could grow to include many more people who lost their homes to nonjudicial foreclosures, and additional condominium associations who benefited from the foreclosures.

Read More:

http://www.civilbeat.org/2016/08/ian-lind-wrongful-foreclosure-claims-rock-the-condo-world/

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4 Replies to “Fighting HOA, Condo foreclosure injustice in Hawaii”

  1. Is there someone I can talk with? I am actually currently facing association foreclosure on my condo. Is there an attorney that can assist me? We don’t want to lose our dream home. We originally owed $3000 in past due late fees and had paid at least $15000 already towards those late fees and now they want to foreclose on us if we don’t pay another $8000. We didn’t know we were constantly getting billed for attorney from $500 – $2500.

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    1. Regina, I am not an attorney, but it sounds like you need one with expertise in real estate and contract law. Look for a reputable professional with a history of working for homeowners, and check references thoroughly – check to make sure there are no complaints filed with the bar.

      Your story is not unusual. Most states do not limit the fees an attorney or collection firm can charge to handle an HOA foreclosure. Those fees can make it impossible for homeowners to ever catch up on their payments and to avoid foreclosure. The irony is that the HOA or condo association often recovers far less money from a foreclosure than the HOA attorney or collection company handling the foreclosure.

      You might also consider filing a complaint with the Consumer Financial Protetction Bureau (CFPB) regarding unfair or deceptive collection practices. http://www.consumerfinance.gov/complaint/

      I hope you are able to resolve this issue in your favor.

      Like

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