76-6247 Kupuna St. - An 'error' with the bank's credit bid, a tied-up insurance payment, and a burned-out house with squatters!

As you know, I love these interesting ones with their twists and turns.  On 10-14-23 I posted the foreclosure notice for 76-6247 Kupuna St., and you may have noticed that on 12-19-23 I posted it again with a new auction date.  

This is a really unique one!  The home is a burned-out mess with squatters.  There are cars and trucks everywhere and people coming and going all the time.  It's so scary that I didn't even want to get out of the car to take a picture.  These photos and video are from a quick drive by!  

Kupuna is one of the main drags to get from the highway down to Alii Dr. so I'm on that road often and was very familiar with this house.  Because of the burned out condition and all the squatters, I was absolutely not interested in pursuing this at auction so I didn't do my usual research on it.  I had no idea what was owed.  However, I was curious, so on November 16th, I attended the auction.  I had expected there would be many bidders, but only 3 third-party bidders and the bank showed up.   There was another agent there representing a buyer client and she and I got to talking.  She told me only $18k was owed!  What?!  I rushed over to the commissioner and asked to see the Findings of Fact and Conclusion of Law.  Sure enough, the bank was owed $495,633.67 but was holding an escrow account of insurance money from the fire worth $486,842.01 so their net amount owed was only $18,061.23.  I was kicking myself for not doing the research sooner and was trying to remind myself that even at $18k, I didn't want to take on this burned out mess of a home with squatters in it, but the deal was sure enticing!!  

However, when the bidding started, the bank shocked everyone by bidding way up in the $400s.  None of the third party bidders outbid the bank, and the commissioner closed the auction.  While the other agent was squawking about how crazy it was that the bank would bid so high when they were only owed $18k, I quietly asked the commissioner how the bank was able to credit bid that much.  If they are only owed $18k, that is the amount of their "credit", which is their 10% that everyone else has to bring in a cashier's check.  If the bank's credit was only $18k, their max bid would be $180k.  They bid well over that.  The commissioner looked flustered and said it was for the court to decide, but I think he realized he should not have accepted the bank's bid.  I emailed him later that day to ask to be informed of when court confirmation was - since I wanted to hear if they would get away with their bid - and he responded that the bank messed up their bid and it would likely be reauctioned.  

So the court scolded both the bank and the commissioner and it has been re-advertised for auction.  I still haven't pulled a preliminary title report because I'm still not interested in this property at any price, but the 2nd auction could be very interesting.  The bank could still bid well over $180k if they send their representative with a cashier's check for the difference of their 10%.  I wonder if the insurance funds in the escrow account remain in limbo if a 3rd party bidder takes the property.  It seems there is a 2nd mortgage and it is possible the insurance funds cannot be touched because they are also tied to the 2nd mortgage?  If those funds were easily releasable to the lender, you would think they would just write off the additional $18k and be done rather than potentially take on this nightmare property, so I don't think it is that simple.  I suspect those insurance funds will be tied up in litigation well after this foreclosure is complete.  This will be a fun one to watch, but definitely one to stay far away from.  

 

15-1474 9th Avenue, Keaau, HI 96749 - Foreclosure Notice

 From Hawaii Tribune Herald 12/27/23:

Notice #: 0001440139-01
Foreclosures

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NOTICE OF FORECLOSURE SALE Pursuant to the Findings of Fact, Conclusions of Law and Order Granting Plaintiff’s Motion for Summary Judgment Against All Defendants and for Interlocutory Decree of Foreclosure; Exhibit “A,” filed on September 26, 2023, in The Bank of New York Mellon F/K/A The Bank of New York as Successor Indenture Trustee to JPMorgan Chase Bank, National Association for CWHEQ Revolving Home Equity Loan Trust, Series 2005-J v. Marietta Nallos Wallace; William Charles Wallace; Hawaiian Paradise Park Owners Association; State of Hawaii-Department of Taxation; U.S. Bank National Association as Trustee for RASC 2005KS8; John Does 1-20; Jane Does 1-20; Doe Corporations 1-20; Doe Entities 1-20; and DOE Governmental Units 1-20, Civil. No. 3CCV-23-0000034, Circuit Court of the Third Circuit, State of Hawai’i, the undersigned Commissioner will sell the following described property at public foreclosure sale at the date and time set forth below: PROPERTY: All of those certain parcels of land situate at Keaau, District of Puna, Island and County of Hawaii, State of Hawaii, described as follows: -PARCEL FIRST:- Lot 1725, acre 1 acre, more or less, Block 7, as shown on Map 58, filed in the Office of the Assistant Registrar of the Land Court of the State of Hawaii with Land Court Application No. 1053 (amended) of W. H. Shipman, Limited. -PARCEL SECOND:- An undivided 1/5750 interest in Lots 60, 62, 8297, 8363, 8385, 8387 and 3115 in Block 7, and Lot 1 in Block 10; as shown on Maps 10, 10, 55, 56, 56, 57, 58 and 65, respectively, of said Land Court Application No. 1053 (amended); and Lot 4-B, as shown on Map 2 of Land Court Application No. 1689 of W.H. Shipman, Limited, to be used in common with others entitled thereto, for roadway and utility purposes only. TAX MAP KEY No. 2-1-5-052-167. STREET ADDRESS: 15-1474 9th Avenue, Keaau, HI 96749. LAND USE DESIGNATION: County Zoning: Agricultural. IMPROVEMENTS: 1,818 sf, 3 bedroom, 2 bath single family dwelling, per County of Hawai’i records. Other unpermitted structures may be present on the property. TERMS: The property will be sold “as is” at public auction with NO UPSET PRICE, and with ten percent (10%) of the highest bid payable in cash, certified or cashier’s check at the fall of the hammer; balance is payable upon delivery of documents transferring title; purchaser shall pay all costs of escrow, conveyancing, recordation and conveyance tax, and shall be responsible for securing possession; SALE SHALL NOT BE FINAL UNTIL APPROVED AND CONFIRMED BY THE COURT. The purchaser shall pay closing costs, including but not limited to costs of escrow fees, title insurance premiums, conveyance document preparation fees, accrued and unpaid real property, conveyance tax, accrued and unpaid ground rent payments, recordation and costs of securing possession after closing. The ability of the purchase to secure title insurance shall not be a condition of closing. OPEN HOUSE:* Saturday, January 27, 2024, 11:00 a.m. 1:00 p.m. Sunday, January 28, 2024, 11:00 a.m. 1:00 p.m. * The property structures have been sealed and inside access will not be provided. SALE DATE: The lot will be auctioned for sale on Thursday, February 1, 2024, beginning at 12:00 noon, at the front entrance of Hale Kaulike (Hilo Judiciary Complex), 777 Kilauea Avenue, Hilo, Hawai?i. For legal description of property to be conveyed and for further details about the sale, contact MASON M. YAMAKI, Commissioner, P.O. Box 7649, Hilo, HI 96720; phone: 808.935.4394; email at mmyamakilawlllc@hawaiiantel.net. ALL INFORMATION IN THIS NOTICE SHOULD BE INDEPENDENTLY VERIFIED BY THE PURCHASER BEFORE BIDDING. MASON M. YAMAKI Commissioner (HTH1440139 12/27/23, 1/3, 1/10/24)

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Kyra Bronson R(B) 23930

LUVA Real Estate

69-1010 Keana Place #B106, Waikoloa, Hawaii 96738 - Foreclosure Notice

 From West Hawaii Today 12-22-23:

Notice #: 0001440469-01
Foreclosures

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NOTICE OF FORECLOSURE SALE Pursuant to the Findings of Fact, Conclusions of Law and Order Granting Plaintiff’s Motion for Default Against Defendants Jason Steele Lent, Association of Apartment Owners of Vista Waikoloa, Waikoloa Beach Resort, and Waikoloa Beach Resort Conference and Summary Judgment and Decree of Foreclosure Against all Defendants on Complaint Filed April 7, 2021; Exhibit A, filed on November 9, 2023, in HSBC Bank USA, as Trustee et al. v. Lent, et al., Civil No. 3CCV-21-0000098, Third Circuit Court of the State of Hawaii, the Commissioner identified below has been directed to sell the following property at a public auction. DESCRIPTION: 69-1010 Keana Place #B106, Waikoloa, Hawaii 96738, TMK: 3-6-9-007-009-0023, a 2-bedroom, 2-bathroom ground floor condominium unit reportedly built in 1990 with 1,286 square feet of living area and lanai. Fee simple. OPEN HOUSES: January 13, 2024 from 10:00 a.m. to 12:00 p.m, and January 14, 2024 from 10:00 a.m. to 12:00 p.m. PUBLIC AUCTION: January 24, 2024 at 12:00 Noon at the Keahoulu Courthouse, 74-5451 Kamakaeha Ave, Kailua Kona HI 96740, to the south of the “Ho’o Pohaku” sculpture in the shade near the northwest corner of the building. TERMS OF SALE: No upset price. Property will be sold in “as is” condition with no warranty of title or possession or any other warranties. No less than ten percent (10%) of the highest successful bid price must be deposited with the Commissioner at the close of the auction, and payment to be made in cash, money order, cashier’s check or certified check. Potential bidders must be able to provide proof of their ability to comply with the 10% bid requirement or status as a party entitled to credit bid prior to participating in the public auction. The balance of the purchase price shall be paid to the Commissioner upon approval and confirmation of the sale by the Third Circuit Court of the State of Hawaii and tender of the document(s) transferring title. At the confirmation hearing, the Court may allow further bidding on the condition that the initial opening bid must be at least one hundred ten percent (110%) of the highest bid at the public auction. All costs and expenses of securing possession of the property and closing, including conveyance and recordation fees and conveyance taxes, shall be paid by the successful purchaser. The ten percent (10%) down payment may be forfeited in full or in part if the successful purchaser fails to pay the balance of the purchase price after court confirmation of the sale. Neither the availability of title insurance nor securing possession of the property shall be a condition of closing. Real estate brokerage commissions will not be paid from sales proceeds. The sale will not be final until approved by the court. For further information contact Daniel S. Peters, Esq., 74-540 Honokohau Street, Kailua-Kona, Hawaii 96740, (808) 331-1199, daniel@danielspeters.com, Commissioner. (WHT1440469 12/22, 12/29/23, 1/05/24)

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Kyra Bronson R(B) 23930

LUVA Real Estate