E Nīnau iā NHLC

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Photo: Sharla Manley

I lost my home in the August wildfires, and I haven’t been able to pay the mortgage since then. Could I lose my property to foreclosure?

By Sharla Manley, Of Counsel Attorney, Native Hawaiian Legal Corporation

Native Hawaiian Legal Corporation (NHLC) started as an anti-eviction law firm aimed at addressing the crisis of Native Hawaiians increasingly being evicted from rural areas to make way for residential and industrial developments. Originally named the “Hawaiian Coalition of Native Claims,” the organization fought against a then-new wave of dispossession from the land to make way for a boom in urban development.

The disaster resulting from the August 2023 wildfires threatens to dispossess Native Hawaiians again in a place that was once the capital of the Hawaiian nation.

This spring and summer of 2024 is shaping up to be a critical phase in the recovery from the August 2023 wildfires. Just under 3,000 people are still living in hotels as part of FEMAʻs non-congregate shelter program as of early April 2024. It is reported that FEMA plans to continue funding the program until May 10, 2024. The state has promised to subsidize the non-congregate shelter program until July 1, 2024.

Currently, the Federal Housing Administration (FHA)’s moratorium on foreclosures in Maui County is scheduled to continue through at least May 6, 2024. No foreclosure actions should be undertaken until at least that date, and families should continue to closely monitor for updates in case this deadline is extended or other forms of relief are offered.

The function of the court in a foreclosure proceeding is to ascertain the precise amount due under the mortgage. If your home was damaged by the August 2023 wildfires and you had a mortgage on the property, the specific language in your mortgage may affect your potential defenses to a foreclosure, namely the precise amount due under the mortgage.

Insurance was likely required as part of your mortgage and may have been placed by the lender. If the lender made an insurance claim for damage to the property resulting from the August 2023 wildfire, it might reduce the amount of indebtedness under the mortgage if the restoration or repair of the property are not economically feasible. The precise amount due under the mortgage would have to be recalculated if an insurance policy was taken out on the property and a pay-out was made to the lender.

Because the specific language in your mortgage might allow for the indebtedness to be reduced under these circumstances, you may want to have an attorney, or a HUD-approved housing counseling agency, review the mortgage and any insurance policies placed on the property as a condition of the mortgage to evaluate your options.

To learn more about disaster relief programs and options related to housing, the FHA Resource Center can be reached at 1 (800) 304-9320 for additional information.

E Nīnau iā NHLC provides general information about the law. E Nīnau iā NHLC is not legal advice. You can contact NHLC about your legal needs by calling NHLC’s offices at 808-521-2302. You can also learn more about NHLC at nativehawaiianlegalcorp.org.