The Non-Judicial "Mortgage" Act of 1874

Kuleana lands were the most valuable, developed.

"An Act to Provide for the Sale of Mortgaged Property Without Suit and Decree of Sale" (Act 33 of the western-dominated 1874 legislature) (RHS p93)

The law permitted a lender to unilaterally and privately auction off a borrower's deed without due process or judicial oversight. Current laws, on the other hand, usually require due process for something as important as foreclosure of a person's home. Today several steps are generally involved, overseen by a judge and designed to slow the process and prevent the loss. Under the 1874 law, the only notice required could be placed in a newspaper's legal notices section. (p97)

Points RHS rasies:

Yikes.

Issue:

Whose interests should be protected?

Non-judicial foreclosure reduced costs to the lender and protections to the borrower. Judicial foreclosure costs more and may protect the borrower.

Current issues with property here (see Gomes article in syllabus). 1999 legislation allows community associations to pursue non-judicial foreclosure.

Current issues with laws on bankruptcy, especially as a way of avoiding fines and credit card debt.

Source:

Robert H. Stauffer. 2004. Kahana: How the Land Was Lost. (esp. Chapter 3 "Counter-Revolution, 1874-1887"). UH Press.

Untangling Proposed Bankruptcy Legislation