A new program to help you keep your home

A few months ago, I blogged about Act 48, a new mortgage foreclosure law that basically creates a process to convert a "non-judicial" foreclosure to a "judicial" one, and provides dispute resolution. (Click here to see the blog.) Essentially, it buys the homeowner time and allows them to present their case in court to help keep them from losing their home.

Yesterday, the Hawaii State Department of Commerce and Consumer Affairs (DCCA) took it a step further with a new Mortgage Foreclosure Dispute Resolution (MFDR) program, designed to offer owner-occupants of residential property in non-judicial foreclosure the opportunity to meet directly with their lenders to modify their loans or work out a payment plan in three months, as an alternative to the foreclosure process.

It’s not an easy process for either side, which is why the DCCA has a web page dedicated to explaining how it works. Both the banks and the owner-occupants must pay a fee to participate in this program. The DCCA then facilitates a resolution session while the foreclosure process is put on hold.

If the dispute is resolved, the foreclosure is terminated; if not, the foreclosure proceeds. Applying for this program doesn’t guarantee resolution, but at least you, as a homeowner, are given some time to keep your home and the opportunity to work things out.

According to RealtyTrac, there were 413 new foreclosure filings in Hawaii—of which 188 were in Honolulu—in August 2011.

Under Act 48, MFDR will continue until September 30, 2014. For more information on the new program, click here.