United States of America v. Perez et al

Filing 34

FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER GRANTING INTERLOCUTORY DECREE OF FORECLOSURE AND DEFICIENCY JUDGMENT - Signed by CHIEF JUDGE SUSAN OKI MOLLWAY on 7/19/11. (Commissioner Daniel S. Peters added.) (Attachments: # (1 ) Exhibit A)(emt, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Daniel S. Peters, Esq. and Christopher Roehrig, Esq. shall be served by First Class Mail at the addresses of record on July 20, 2011.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
UNITED STATES OF AMERICA,

)
)
Plaintiff,
)
)
vs.
)
)
ALFRED R. PEREZ, ET AL.,
)
)
Defendants.
)
)
)
_______________________________)

CIVIL NO. 10-00535 SOM RLP
FINDINGS OF FACT, CONCLUSIONS
OF LAW AND ORDER GRANTING
INTERLOCUTORY DECREE OF
FORECLOSURE AND DEFICIENCY
JUDGMENT; EXHIBIT A

FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER GRANTING
INTERLOCUTORY DECREE OF FORECLOSURE AND DEFICIENCY JUDGMENT
Plaintiff United States of America filed a Motion for
Summary Judgment, Interlocutory Decree of Foreclosure, and
Deficiency Judgment (the “Motion”) against the named defendants
on May 13, 2011.

Prior to the filing of the Motion, Defendants

Island Community Lending corporation, Hickam Federal Credit
Union, and Countrywide Home Loans, Inc. were voluntarily
dismissed from this action.

Defendant Hawaii First, did not

dispute the existence or terms of the VA’s Mortgage Note,
Mortgage, or Mortgage Modification Agreement, and filed a
Statement of No Opposition to the United States’ Motion.
Defendant Perez failed to appear, and the Clerk of the Court
entered default against him on January 24, 2011.

Pursuant to

Local Rule 7.2(d), and in its discretion, the Court granted the
Motion without a hearing on July 1, 2011.

The Court, having considered the record herein, finds
as follows:
FINDINGS OF FACT
1.

This is a civil action brought by Plaintiff UNITED

STATES OF AMERICA (“Plaintiff” or the “United States”) on behalf
of note holder and mortgage assignee Department of Veterans
Affairs (the “VA”), seeking monetary judgment against Defendant
ALFRED R. PEREZ (“Defendant Perez”), on a Mortgage Note,
Mortgage, and Mortgage Modification Agreement.

The property at

issue in this foreclosure action is located at 5246 Kalae Place,
in Kamuela, Hawaii, Tax Map Key No. (3) 6-4-025-030 (CPR 0002).
2.

Jurisdiction over this action is based on Title

28, United States Code.
3.

On or about December 13, 2011, Defendant Perez

executed and delivered a Mortgage Note in favor of Island
Community Lending Corporation in the amount of $202,980.00.
4.

For the purpose of providing further security of

payment of said Mortgage Note, Defendant Perez executed a
Mortgage in favor of Island Community Lending Corporation, dated
December 18, 2000, and filed in the Bureau of Conveyances for the
State of Hawaii as Document No. 2000-179967.
5.

The Mortgage was ultimately assigned to the

Secretary of Veterans Affairs through an assignment of mortgage,

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recorded on January 19, 2005, in the Bureau of Conveyances for
the State of Hawaii as Document No. 2005-010738.
6.

On or about March 11, 2005, Defendant Perez

entered into a mortgage modification agreement with the VA, which
was recorded on March 22, 2005, in the Bureau of Conveyances for
the State of Hawaii as Document No. 2005-056423.
7.

On or about March 31, 2010, after Defendant Perez

defaulted in the payment under th terms of the Mortgage Note,
Mortgage, and Mortgage Modification Agreement, the VA notified
Defendant Perez of his default and provided Defendant Perez with
two alternatives in lieu of foreclosure.
8.

As of May 10, 2011, Defendant was still in default

under the terms of the Mortgage Note, Mortgage, and mortgage
Modification Agreement, all of which are held by Plaintiff.
9.

Pursuant to the terms of the Mortgage Note,

Mortgage, and Mortgage Modification Agreement, the entire
remaining principal and interest thereon are due and payable
together with costs, expenses, and late fees, all fo which are
secured by the Mortgage Note, Mortgage, and Mortgage Modification
Agreement.

As of April 25, 2011, the amounts due and owing were

as follows:
Principal Balance:
$190,961.12
Interest to 04/25/11:
15,142.67
Uncollected Late Charges:
178.30
Escrow Balance Due:
18,595.13
TOTAL:
$224,877.22

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Plus interest at the daily rate of $20.9272 from April 25, 2011,
until the date of judgment and interest thereafter at the legal
rate until the indebtedness is paid in full.
CONCLUSIONS OF LAW
Pursuant to the foregoing Findings of Fact, the Court
concludes as follows:
1.

Plaintiff is entitled to have its Mortgage

foreclosed upon the property covered by the Mortgage and
described in Exhibit “A” and to have the property sold in a
manner authorized by law, said Mortgages being a valid,
subsisting and outstanding mortgage upon the property.
2.

As of April 25, 2011, the amounts due and owing

were as follows:
Principal Balance:
$190,961.12
Interest to 04/25/11:
15,142.67
Uncollected Late Charges:
178.30
Escrow Balance Due:
18,595.13
TOTAL:
$224,877.22
Plus interest at the daily rate of $20.9272 from April 25, 2011,
until the date of judgment and interest thereafter at the legal
rate until the indebtedness is paid in full.

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ORDER GRANTING INTERLOCUTORY DECREE OF
FORECLOSURE AND DEFICIENCY JUDGMENT
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED:
1.

That Plaintiff’s Motion for Interlocutory Decree

of Foreclosure and Deficiency judgment filed herein on May 13,
2011, is hereby granted.
2.

Defendant Perez is in default under the terms of

said Mortgage Note, Mortgage, and Mortgage Modification Agreement
described in the United States’ Complaint, which Mortgage Note,
Mortgage, and Mortgage modification Agreement are currently held
by the United States.

There was due and owing and unpaid to

Plaintiff from Defendant Perez, as of April 25, 2011, the
following amounts:
Principal Balance:
$190,961.12
Interest to 04/25/11:
15,142.67
Uncollected Late Charges:
178.30
Escrow Balance Due:
18,595.13
TOTAL:
$224,877.22
Plus interest at the daily rate of $20.9272 from April 25, 2011,
until the date of judgment and interest thereafter at the legal
rate until the indebtedness is paid in full.
3.

The Mortgage described above and currently held by

Plaintiff shall be and is hereby foreclosed as prayed, and the
property described in Exhibit “A” shall be sold at public
auction, without an upset price, as authorized by law and under
the provision of the mortgage.

Such sale of the mortgaged

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property shall not be final until approved and confirmed by the
Court.
4.

The Commissioner as appointed herein by the court

is authorized and directed under 28 U.S.C. §§ 2001 and 2002 to
offer for public sale, and to sell the Subject Property, free and
clear of the right, title, and interest of all parties to this
action and any successors in interest or transferees of those
parties, within four (4) months after the Commissioner is
appointed as Commissioner.
5.

Daniel S. Peters, Esq., whose address is 75-5875

Kahakai Road, Kailua-Kona, Hawaii, 96740, and whose telephone
number is [phone], is hereby appointed by this Court as
Commissioner and as Commissioner shall henceforth hold an
equitable and legal title to property, and is hereby authorized
to take possession of the property, to rent the property, if
appropriate, to sell the property on foreclosure sale to the
highest bidder at the Commissioner’s sale by public auction,
without an upset price, after first giving notice of such sale by
publication in at least one newspaper regularly issued and of
general circulation in the county wherein the realty is situated
in the State of Hawaii, or in the District of Hawaii.

Said

notice shall be published once a week for at least four (4)
consecutive weeks, with the auction to take place no sooner than
fourteen (14) days after the publication of the fourth

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advertisement.

Said notice shall give the date, time, and place

of the sale and an intelligible description of the Subject
Property, including any improvements.

The Commissioner shall

have further authority to continue the sale from time to time at
the Commissioner’s discretion.

In the event that the

Commissioner refuses, or becomes unable, to carry out his duties
set forth herein, the Court shall appoint another without further
notice of hearing.
6.

The Commissioner and all persons occupying the

mortgaged property, if any, shall allow reasonable access to view
the mortgaged property, a minimum of two separate days prior to
the sale of the Subject Property, by means of an open house or
other reasonable means.
7.

The Commissioner shall sell the Subject Property

by foreclosure sale in its “AS IS” condition, without any
representations or warranties whatsoever as to title or
possession.
8.

The fee of the Commissioner shall be such as the

Court deems just and reasonable, together with actual and
necessary expenses incurred with the sale of the mortgaged
property.

The Commissioner’s hourly rate shall be no more than

$150.00 per hour, with an overall cap of $4,000.00, in accordance
with prevailing rates in Hawaii.

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9.

The Commissioner shall hold all proceeds of the

sale of the mortgaged property to the credit of this cause
subject to the directions of this Court.

Upon payment according

to such directions, the Commissioner shall file an accurate
accounting of the Commissioner’s receipts and expenses.
10.

The order of distribution of the sale proceeds to

the parties claiming an interest in the property shall be made in
accordance with their respective priorities.
11.

The sale so made and confirmed shall perpetually

bar defendants herein named and all persons and parties claiming
by, through or under them, except governmental authorities
enforcing liens for unpaid real property taxes, from any and all
right, title and interest in the mortgaged property or any part
thereof.

At a hearing to consider confirmation of the

foreclosure sale, the Court shall hear proof of claims of any
other parties, and shall determine the priority among the
parties, and the final payment of the proceeds of the foreclosure
sale shall be directed.
12.

The United States and all other parties are hereby

authorized to purchase the mortgaged property at the foreclosure
sale.

The successful bidder at the foreclosure sale shall be

required at the time of such sale to make a down payment to the
Commissioner in an amount not less than ten percent (10%) of the
highest successful price bid, such payment to be in cash,

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certified check or cashier’s check, provided that Plaintiff may
satisfy the down payment by way of offset up to the amount of its
secured debt.

The balance of the purchase price must be paid in

full at the closing of the sale, which shall take place thirtyfive (35) days after the entry of the order confirming the sale.
Such payment is to be in cash, certified check or cashier’s
check, provided that should Plaintiff United States be the high
bidder, it may satisfy the balance of the purchase price by way
of offset up to the amount of its secured debt, as discussed
above, as appropriate.

Costs of conveyancing, including

preparation of the conveyance document, conveyance tax, securing
possession of the Subject Property, escrow services, and
recording of such conveyance, shall be at the expense of the
purchaser.

If the bidder fails to fulfill this requirement, the

down payment shall be forfeited and applied to cover the cost of
sale, including the Commissioner’s fee, with any amount remaining
to be returned to the bidder.
13.

Pending the sale of the mortgaged property,

Defendant Perez shall take all reasonable steps necessary to
preserve the mortgaged property (including all buildings,
improvements, fixtures and appurtenances on the property) in its
current condition.

Defendant Perez shall not commit waste

against the Subject Property, nor shall he cause or permit anyone
else to do so.

Defendant Perez shall not do anything that tends

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to reduce the value or marketability of the Subject Property, nor
shall he cause or permit anyone else to do so.

Defendant Perez

shall not record any instruments, publish any notice, or take any
other action (such as running newspaper advertisements or posting
signs) that may directly or indirectly tend to adversely affect
the value of the Subject Property or that may tend to deter or
discourage potential bidders from participating in the public
auction, nor shall he cause or permit anyone else to do so.
Violation of this paragraph shall be deemed a contempt of court
and shall be punishable as such.
14.

All persons occupying the subject

property, if

any, shall leave and vacate the Subject Property permanently
within sixty (60) days of the date of this Decree, each taking
with them their personal property (but leaving all improvements,
buildings, fixtures and appurtenances to the Subject Property).
If any person fails or refuses to leave and vacate the Subject
Property by the time specified in this Decree, the Commissioner
is authorized and directed to take all actions that are
reasonably necessary to bring about the ejectment of those
persons, including obtaining a judgment for possessions and a
writ of possession.

If any person fails or refuses to remove his

or her personal property from the premises by the time specified
herein, any personal property remaining on the Subject Property
thereafter shall be deemed forfeited and abandoned, and the

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Commissioner is authorized to remove and dispose of such personal
property in any manner the Commissioner sees fit, including sale,
in which case the proceeds from such sale shall be applied first
to the expenses of sale and the balance shall be paid into the
Court for further distribution.
15.

When the sale of the mortgaged property is

confirmed by this Court, the State of Hawaii, the Hawaii State
Land Court, and/or the Hawaii State Bureau of Conveyances shall
permit the transfer of the mortgaged property to be reflected
upon register of the title.
16.

The sale can be supplemented with the practices

and procedures in the State of Hawaii and Section 667 of the
Hawaii Revised Statutes.
17.

The Court reserves jurisdiction to determine the

party or parties to whom any surplus shall be awarded herein.
18.

At the hearing on confirmation herein above

mentioned, if it appears that the proceeds of such sale shall be
insufficient to pay all the amounts which are valid claims
against Defendant Perez, and a deficiency exists, judgment shall
be entered for such deficiency against Defendant Perez and in
favor of the United States.
19.

There being no just reason for delay, this shall

be an express direction that this order shall be entered as a

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judgment, pursuant to Rule 54(b), Federal Rules of Civil
Procedure, as to all claims determined by this Order.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, July 19, 2011.

/s/ Susan Oki Mollway
Susan Oki Mollway
Chief United States District Judge

USA v. Perez, Civil No. 10-00535 SOM/RLP
FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER GRANTING INTERLOCUTORY DECREE OF FORECLOSURE AND
DEFICIENCY JUDGMENT.

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