Thursday, July 25, 2024
Hawai'i Free Press

Current Articles | Archives

Friday, February 7, 2014
SB2149: Combat Fraudulent Liens and Mortgage Filings
By Sen. Sam Slom @ 9:13 PM :: 5175 Views :: Hawaii State Government, Law Enforcement

Hawaii legislators to hear a bill to combat fraudulent liens and mortgage filings

Hawaii legislators set to hear a bill to combat fraudulent lien filings on February 11, 2014, at 9:30 a.m. in room 229 at the Hawaii Capitol in a joint committee session of Commerce and Consumer Protection and Judiciary and Labor.  The public is urged to get involved and submit testimony.

News Release from Office of Senator Sam Slom, February 7, 2014

HONOLULU—Senator Slom says “Fraudulent liens are a growing problem that adversely affect Hawaiian residents, especially homeowners. The practice has been called "paper terrorism" and should be corrected now. This is one thing we can and should do. ”

Fraudulent lien filings are an ever increasing problem in states and counties across the United States. Often victims of these filings will be forced to expend tens of thousands of dollars on lawyers and court fees to remedy the fraudulent filing. All too often the victims too will be frustrated in the sale and purchases of their homes. Senator Slom has introduced SB2149 to make it easier and less expensive for victims of these crimes to remove a fraudulent lien or reinstate a valid lien. Effectively, it is a simple process administered by the Lieutenant Governor (Hawaii's version of a Secretary of State). The bill amends the Uniform Commercial Code, providing for a sworn statement to be filed with the office of the Lieutenant Governor and notice to be given to the person who initially filed the lien or removed a lien, before any action is taken to remedy the filing or release. The civil damages for filing a fraudulent lien is up to $10,000 or actual costs plus attorneys' fees and court costs.

Well after this proposed bill was initially drafted by the Senate Minority, 3 people in Hawaii were indicted for fraudulent mortgage satisfactions (January 9, 2014 – "...the trio obtained releases of more than $4.5 million in mortgages and other liens against the properties, then turned around and sold the properties for a total of more than $3.3 million." (See bizjournals article Jan 9, 2014) or ( 1/8/2014)

You can picture the above scenario easily: Bad Guy owes a fortune on his house in Hawaii.  The bank has a standard mortgage lien on his house.  Bad Guy suddenly decides that the laws of the U.S. no longer apply to him – particularly the ones that involve paying his mortgage bills.  So, he files the paperwork needed to release the lien on his home.  The recorder of deeds is powerless to make the determination if the release of lien is valid.  They are, by statute, a rubber stamp.  The lien is released.  Then, Bad Guy can sell the house to an unsuspecting purchaser and the title search shows that there is no lien on the house.  Meanwhile, the bank’s collateral is gone and they can’t foreclose on the properties.

Senator Slom states "Not only is it costing homeowners and purchasers money to remedy these fraudulent filings, but it is costing title companies, banks and insurance companies significant amounts each year for an ever increasing problem."

Paper liens are often used as a weapon. (New York Times article - 2013/08/24 - Wage battle with liens) In Hawaii this weapon to intimidate or harass has been used against at least one U.S. District Court Judge in the District of Hawaii in the past. Various FBI media releases report fraud relating to mortgages is increasing. Some recent examples of fraudulent lien statement filings include: 2010, Michigan, a 61 year old man was sentenced for 63 months jail for filing a fraudulent lien statement to retaliate against a federal judge. See (FBI press release 2010) ; November 2012: A federal grand jury sitting in Chicago, Illinois, has returned a 12-count felony indictment against Chicago resident Cherron Marie Phillips for filing false liens against the real property of a dozen federal employees. (FBI 2012 press release) ; May 2013, Washington State, harassing fraudulent lien statements resulted in long prison terms for 2 men. (FBI press release WA 2013) Filing false liens has previously described as "paper terrorism". (

Senator Slom has also introduced SB2148 which, if passed, would make it a criminal offense to file a fraudulent lien statement. SB2148 A conviction of filing to harass a government official or judge is a class B felony (up to 10 years in jail), and to harass a member of the public is a class C felony (up to 5 years in jail). A hearing in committee has not been scheduled by the chairpersons to date. SB2148 was referred to CPN and JDL. Many other states have laws and civil penalties for fraudulent financial statement filings, a.k.a. fraudulent lien or mortgage filings. See NCSL list.

In the meantime, SB2149 is set for hearing on February 11, 2014, 9:30 a.m. in Conference room 229 at the Hawaii State Capitol.

# # # # #

Text, Status: SB2149


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


Aloha Pregnancy Care Center


Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii


Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together


Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii


OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii