STAND. COM. REP. NO. 3092

 

Honolulu, Hawaii

                  

 

RE:    S.C.R. No. 39

       S.D. 1

 

 

 

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2012

State of Hawaii

 

Sir:

 

     Your Committee on Commerce and Consumer Protection, to which was referred S.C.R. No. 39 entitled:

 

"SENATE CONCURRENT RESOLUTION DIRECTING THE ATTORNEY GENERAL OF THE STATE OF HAWAII TO INVESTIGATE CASES WHERE FRAUDULENT TRANSFERS AND ASSIGNMENTS OF MORTGAGE LOAN DOCUMENTS ARE ALLEGED,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to direct the Attorney General to investigate cases where fraudulent transfers and assignments of mortgage loan documents are alleged and to take action so that any financial settlement reached with mortgage servicers appropriately compensates and reflects the extent of the negative impact on all victims of the fraud.

 

     Your Committee received testimony in support of this measure from eight individuals.  Your Committee received comments on this measure from the Department of the Attorney General.

 

     Your Committee finds that federal agencies, including the United States Department of Justice and the United States Department of Housing and Urban Development, and the fifty state attorneys general have been actively and jointly investigating wrongful conduct by lenders and servicers.  Your Committee further finds that this joint multistate investigation has recently resulted in a settlement with the United States Department of Justice, the United States Department of Housing and Urban Development, forty-nine state attorneys general, the District of Columbia, and the nation's five largest lenders and servicers.  The mortgage servicing settlement addresses certain mortgage loan servicing and foreclosure abuses, and is the largest federal-state civil settlement ever obtained.

 

     According to testimony received from the Attorney General, the settlement provides certain limited releases to the settling servicers, which could conflict with some of the investigative and enforcement actions contemplated by this measure.  However, your Committee notes that the settlement does not release individual consumer's claims or defenses, claims against any third party vendors, or any criminal liability.  The settlement also requires mortgage servicers to provide documentation of the note, holder status, and chain of assignment in the mortgage process.  Five separate consent judgments have also been filed.  These judgments are fully enforceable in federal court and servicers face significant monetary penalties for failure to comply with the settlement terms.

 

     Your Committee also notes that due to the interest in this agreement, the United States Department of Justice has released documents pertaining to the mortgage servicing settlement.  The documents are accessible on the United States Department of Justice's website, available at http://www.justice.gov/opa/

opa_mortgage-service.htm.

 

     Your Committee concludes that in light of the recent mortgage servicing settlement, certain amendments to this measure are necessary.

 

     Accordingly, your Committee has amended this measure by:

 

     (1)  Adding language that more accurately reflects the results of the joint multistate investigation and recent mortgage servicing settlement;

 

     (2)  Adding language that is more appropriate for this type of measure, by requesting the Attorney General to continue collaborating with appropriate state and federal agencies, investigate instances of wrongful and unlawful conduct by lenders and servicers, and take appropriate action, rather than directing the Attorney General to take certain actions;

 

     (3)  Amending the title and other findings for accuracy; and

 

     (4)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

 

     As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee concurs with the intent and purpose of S.C.R. No. 39, as amended herein, and recommends that it be referred to the Committee on Judiciary and Labor, in the form attached hereto as S.C.R. No. 39, S.D. 1.

 

Respectfully submitted on behalf of the members of the Committee on Commerce and Consumer Protection,

 

		____________________________ ROSALYN H. BAKER, Chair