HOUSE OF REPRESENTATIVES	H.B. NO.	2055
THIRTY-SECOND LEGISLATURE, 2024
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO MORTGAGE FORECLOSURES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that in the county of Hawaii, premiums for homeowners insurance policies are subject to assumed risks assigned to areas described by the United States Geological Survey as "lava zones". Lava zones are considered high risk areas due to volcanic activity, and homeowners living in lava zones have to pay significantly higher insurance premiums to get coverage for lava damage.

The legislature further finds that obtaining homeowners insurance coverage is becoming increasingly difficult for residents in the most hazardous lava zones, which are lava zones 1 and 2. In July 2023, the Florida-based insurance provider Universal Property and Casualty Insurance Co. announced its intent to withdraw from Hawaii's homeowners, condominium, and renters insurance market over a thirteen-month period, with the last policies effective August 31, 2024. This decision impacts roughly one thousand five hundred policyholders in the State, about nine hundred of which are in the county of Hawaii. For many residents in lava zones 1 and 2, the only option left for homeowners insurance is the Hawaii property insurance association — a state-run, last-resort option that underwrites insurance coverage for those unable to find another provider.

The legislature finds that after Universal Property and Casualty Insurance Company began exiting the Hawaii homeowners' insurance market, many homeowners with mortgages in lava zones 1 and 2 found themselves unable to acquire private homeowner's insurance and unable to afford the high price of the Hawaii property insurance association. With rate increases in the range of four hundred to one thousand per cent, many residents say that they are being priced out of their homes.

The purpose of this Act is to halt foreclosures for mortgages in which the homeowner can demonstrate an attempt to acquire homeowner's insurance and can demonstrate financial inability to acquire insurance from the Hawaii property insurance association. Specifically, this Act establishes a moratorium on foreclosure actions for property located in lava zones 1 and 2 to give the State time to establish solutions.

SECTION 2. (a) There shall be a two-year moratorium on foreclosure actions for property located in lava zones 1 and 2 in this State, as determined by the lava-flow hazard zone map created by the United States Geological Survey, to begin on the effective date of this Act. During the moratorium period established by this Act:

(1) No foreclosure by action or by power of sale shall proceed;

(2) No court shall issue an order for foreclosure pursuant to section 667-1.5, Hawaii Revised Statutes;

(3) The assistant registrar of the land court or deputy shall not record a certified copy or an affidavit pursuant to section 501-118, Hawaii Revised Statutes; and

(4) The registrar of the bureau of conveyances shall not record an affidavit or a conveyance document pursuant to sections 667-33 and 667-103, Hawaii Revised Statutes.

(b) The moratorium shall sunset after two years unless the commissioner formally requests its renewal to the governor. No more than three renewals shall be allowed.

SECTION 3. This Act shall take effect upon its approval.

INTRODUCED BY:

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Report Title:

Foreclosure Moratorium; Lava Zones 1 and 2

Description:

Establishes a moratorium on foreclosure actions for property located in lava zones 1 and 2.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.