Why this law exists: protecting homeowners from foreclosure help scams

The purpose of this chapter is to protect Hawaii consumers from persons who prey on consumers by offering services that purport to provide relief from consumers' mortgage loan obligations or from other filed or threatened liens or encumbrances against their properties. Consumers who face foreclosures, liens, or encumbrances are often in desperate financial situations that can have severe adverse consequences for individuals and families even if the consumers have significant equity in their residential real property. The consumers' desperation makes them vulnerable to persons who claim they can stop, prevent, or delay foreclosures, liens, or encumbrances, or claim they can reduce, modify, or eliminate mortgage loan obligations or other filed or threatened liens or encumbrances. Persons who make these claims often use the consumers' desperation to foster unequal bargaining positions and withhold or misrepresent vital information and details. As a result, consumers may be convinced to give up their real property interests and valuable equity to these persons while receiving little in return. Requiring full and complete disclosure of vital information will better enable consumers to make informed decisions when dealing with persons claiming to be able to stop foreclosures, liens, or encumbrances. This chapter addresses possible misrepresentations by compelling persons who offer assistance to fully and completely describe their services in written contracts and gives consumers the right to cancel at any time before a distressed property consultant has performed all services called for in a contract.