Hawaii House Bill HB2055

Hawaii 2024 Regular Session

• Introduced: 1/22/24
• Refer: 1/24/24

Caption

Relating To Mortgage Foreclosures.

Impact

The bill aims to mitigate the immediate threat of foreclosure for homeowners who can demonstrate an inability to secure affordable insurance. With rising insurance costs, some homeowners have reported premium increases of up to a thousand percent, jeopardizing their financial stability and housing security. The moratorium aims to prevent the loss of homes during a tumultuous time for residents in these vulnerable lava zones, and it allows for the potential exploration of state-level interventions to address the insurance market's challenges.

Summary

House Bill 2055 addresses the critical issue of mortgage foreclosures in Hawaii, specifically targeting properties located within high-risk lava zones as designated by the United States Geological Survey. Recognizing the challenges posed by the increased difficulty in obtaining homeowners insurance in these zones, particularly after the withdrawal of a major insurance provider, the bill establishes a two-year moratorium on foreclosure actions for homes in lava zones 1 and 2. This moratorium is intended to give the state time to devise broader solutions for homeowners facing financial strain due to exorbitant insurance premiums and the unavailability of coverage options.

Contention

However, the bill is not without its points of contention. Critics may argue that while it provides temporary relief, it could also delay necessary market corrections and the exploration of long-term solutions to the root issues affecting the insurance landscape. Concerns about the overall efficacy and fairness of the moratorium may arise, especially if it impacts mortgage lending practices or if it inadvertently encourages reckless financial behavior among homeowners who perceive that their foreclosures are protected.