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Financial Services Law Insights and Observations

Hawaii Enacts Legislation Prohibiting Requirement for Foreclosure Buyer to Use Particular Vendors

State Issues

On April 19, Hawaii Governor Linda Lingle signed into law S.B. 2910, a bill providing that a foreclosing or acquiring mortgagee may not require a buyer to purchase title insurance or escrow services from a particular vendor in connection with a judicial foreclosure or foreclosure by power of sale. The bill provides that a buyer may agree to use a title insurer or an escrow agent recommended by the foreclosing or acquiring mortgagee if the buyer is first provided with written notice of his or her right to make an independent selection of title insurance or escrow services. The bill becomes effective July 1, 2010.

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