Call to Action: Individualized Attention and Community Outreach Needed to Address Lease Cancellation 

Blossom Feiteira 

 

HAWAII - Trying to keep one's head above water in today's economy has been a struggle for thousands of families here in Hawaii.  The long, drawn-out process to cure a mortgage default can increase the frustration and feeling of helplessness that may result in foreclosure.  The loss of a home is a reality for many of us.  To keep a home requires individualized attention and community outreach. 

 

It is no different for the families currently residing on the Hawaiian Home Lands Trust.

 

Housing Counseling Works 

According to an independent review by the Urban Institute, homeowners who receive National Foreclosure Mitigation Counseling (NFMC), from HUD-approved housing counseling agencies like HCA, are 60% more likely to avoid losing their home to foreclosure than homeowners who do not seek out counseling.   In addition, NFMC counseled clients were more likely to receive a loan modification, and on average, saved $454 more on their monthly mortgage payments than other homeowners who received a modification but did not work with a counselor.

 

Housing counseling promotes financial education and communication as the vehicles for families to prevent foreclosure.  It allows for certified counselors to conduct a financial assessment to determine the best workout options available to the family and their lender.  Simply put: housing counseling works.  Not only does it work, but it is the pono way for us to resolve our conflicts and ensure the well-being of our families and communities.   

 

Community Outreach is Key 

For those living on Trust lands, the road to curing a default is oftentimes rocky and impassable.

Hawaiian Home Lands Lessees receive financing to purchase homes primarily through government-backed loans from federal agencies such as the Federal Housing Administration (FHA), U.S. Department of Agriculture Rural Development (USDA RD) and the Veteran's Administration (VA).  These loan programs provide a guarantee to the lender in case of default.  In addition, because of the trust status of the Hawaiian Home Lands Trust, the State Department of Hawaiian Home Lands are required to provide a guarantee to the respective government agency that the loan will be paid.

  

It may seem like a great deal all the way around.  For the lenders, maybe.  For the guarantors of the loan, not so much.  And, definitely not for the lessee. 

  

On average, by the time the Department of Hawaiian Home Lands (DHHL) receives the loan, penalties and interest accrued from the lender on top of the original loan principle can be anywhere from $20,000 to $50,000 higher, all of which eventually becomes the burden of the lessee.

 

We need to ensure that families are informed and educated earlier in the process, especially as loan rescue and refinance scams continue to prey on our kupuna and homeowners on Hawaiian Home Lands.  By reaching out earlier to our struggling homeowners, we can also engage them in asset building services such as free tax preparation.  According to the Internal Revenue Service (IRS), Earned Income Tax Credits represent the largest Federal anti-poverty program, but are the most underutilized.  The IRS estimates that $44 million goes unclaimed in the State of Hawaii every year, while our families with 3 or more children earning less than $50, 000/year are able to qualify for as much as $5,891.

Next Step: Defined Strategy  

Any options available to the lessee at-risk of foreclosure are limited due to the trust status of Hawaiian Home Lands.  Opportunities to "sell" their home in advance are limited due to the restricted market.  Appraised value are governed by Federal law that only allows for replacement costs, thereby impacting a lessee's ability to gain some sort of financial foothold in getting out from under.  All of this leads to one question - What does DHHL do with these families?

 

To give the Department their due, staff assigned to work with the lessees does make a concerted effort to help the families get back on track and keep the families in their homes.  However, when all else fails, it becomes the responsibility of the Hawaiian Homes Commission to make the final call:  Lease Cancellation.

 

The Hawaiian Homes Commission is the only body with the authority to cancel a lease.  And, it is the only body that has the authority to adopt any process that can provide for the mitigation of the loss and keep the family in their home.  History clearly shows that the Commission very rarely cancels a lease, and instead opts to provide a lessee with an opportunity to work out some kind of agreement with DHHL that will eventually lead to curing the existing default.

Limited staff, limited funds and too many defaulted loans have resulted in a logjam of leases that have yet to be addressed by DHHL and the Commission.  The end result is that there are families who are waiting for something to come their way, whatever that may be.

 

For those families looking for help, there is an organization that can assist them in navigating the rough waters.  The journey may be long and rough, but with persistence and a will to succeed,

they will be able to get back on track and have a long and successful life as homeowners.

HCA has long assisted families both on and off Trust lands with addressing their mortgage challenges and are able to help with keeping these families in their homes.  With offices on each island, HCA has the capacity and expertise to provide counseling assistance and services that can help to relieve the emotional and real life financial burdens most families carry in such situations.

 

The bottom line: We cannot let our families at-risk of lease cancellation suffer in silence - we must have a defined strategy to assist them that promotes individualized attention and community outreach.

 

Blossom Feiteira is a co-founder of HCA and awardee of the Ford Foundation's Leadership for a Changing World Award for her work in promoting housing as a human right.  Ms. Feiteira works in partnership with HCA to conduct homebuyer education workshops and outreach to increase the home ownership rate among low-income families statewide.  

 

           * Reducing payments

HCA started its partnership in 2008 with the Anahola Hawaiian Homestead Association to deliver services through its community resource center (pictured above).

HAWAII - In recent months, Hawaiian Homestead Associations in Laiopua, Papakolea, and Waianae have partnered with HCA to open satellite office spaces in their communities with the goal of bringing much needed financial services and products to their families.

"Where you stay should not dictate the services you can receive," says Annie AuHoon, Executive Director of the Sovereign Councils of Hawaiian Home Lands Assembly.  "We mahalo HCA for coming to community as a partner willing to share its financial education and counseling services with our opio and our families so they can reach the dream of home ownership."

Currently, HCA has statewide offices on Oahu, Big Island, Maui, and Kauai.  Through the recent partnerships, HCA now delivers its free services from 7 locations across the state; 5 of which are on Hawaiian Home Lands.

Fund Raising Opportunities for Homestead Associations
As part of the partnership, HCA is providing all Homestead Associations with unique fund raising opportunities to assist with outreach to enroll qualified Beneficiaries in the organization's free homebuyer education and counseling program.  Qualified Beneficiaries are individuals who:

1. Are at least 18 years of age
2. Do NOT currently own a home
3. Have less than $120,000 in asset wealth

Homestead Associations that come on as partners with HCA will be eligible to receive $5 for each qualified Beneficiary they refer to the organization, once the Beneficiary completes an intake application package and 8-hour home buyer education workshop.  Homestead Association partners may also receive an additional $100 per home buyer workshop they co-host and has at least 10 qualified Beneficiaries in attendance.

"We're excited to work with Homestead communities in outreaching to the next generation of homeowners so we can assist them on their path to home ownership," says HCA Community Services Specialist, Lahela Williams.  "Fund raising should not be frustrating."

 

The fund raising opportunities are made possible with support from the Council for Native Hawaiian Advancement through the Hawaii Family Finance Project.

Homestead Associations interested in partnering with HCA may contact the organization at 808.587.7886, (toll-free) 1.866.400.1116 or via email at info@hawaiiancommunity.net.