Their homes and businesses were destroyed in Lahaina, but mortgage payments are still due

HONOLULU (HawaiiNewsNow) - Almost six weeks after the devastating wildfire, mortgage payments are coming due — even for some whose homes or businesses no longer exist.

Advocates are urging banks to give their customers a bigger break.

A number of local and national banks have agreed to let owners of destroyed properties delay mortgage payments — but only for a few months and the interest still accumulates during the delay.

Attorneys and homeowners say they need more.

Leah Nakamura Frank rented out her old apartment at one of the Opukea Condo buildings that burned. She refunded her tenants’ rent and her bank agreed to a 90-day forbearance.

Special Section: Maui Wildfires Disaster

But she says that doesn’t solve the problem.

“We do have two mortgage payments to pay with no revenue on our condo, so we’re really stressed out,” Frank said. “At the end of 90 days, they want all my back pay in full, which really doesn’t help.”

The condo insurance does cover a year of lost revenue.

But her owners’ association is predicting rebuilding could take five years.

U.S. Rep. Jill Tokuda, D-Hawaii, said mortgage fears are the latest looming challenge for surviving property owners.

“There’s a lot of fear right now, as you know, what would have been their first monthly payment, after this whole disaster starts to come up,” Tokuda said.

“And people are worried about forbearance, they’re worried about foreclosure, they’re worried about their credit scores.”

While Tokuda is urging banking regulators to support consumers, local attorney Lance Collins is proposing mortgage lenders defer payments for three years for those who lost property.

“The most important thing for folks is to prevent people going immediately into foreclosure,” Collins said. “And then six or seven months from now, on the courthouse steps, you basically have all of this land grabbing going on.”

Collins represents multiple surviving property owners.

He pointed out that most lenders have thousands, or even millions, of customers nationwide and relatively few in Lahaina; they would lose money foreclosing on burned buildings, he said, and by deferring payments and interest they’ll eventually get all their money back.

“I think financially for the banks, that’s not really going to hurt them at all,” Collins said.

“But it could definitely hurt the community if the banks aren’t willing to do this.”

Frank said she is willing to meet her obligations, when she can.

“Really, we just want it to be added to the end of the note Simple as that it would solve all our problems,” she said.

The state has offered advice for homeowners. Click here for details.

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