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DHHL loan delinquency steady at about 24%; agency outlines collection steps and expanded outreach
Summary
DHHL reported a slight drop in loan delinquency to 24.1% and described steps to improve collections, including separating loan origination from collections, more field visits, payment plans, contested-case hearings and use of partner loan programs.
DHHL—s Homestead Services Division reported to the Hawaiian Homes Commission on July 21 that loan delinquency remained elevated but had edged down slightly to 24.1% of outstanding balances, from 24.6% the prior month. The division described organizational changes and outreach intended to reduce delinquencies and move seriously delinquent accounts either to repayment plans or contested-case hearings.
Juan Garcia, Homestead Services Division administrator, told the commission there are 10,098 lessees of record and 47,429 total applications on file representing 29,610 applicants. The loan delinquency report showed most delinquent accounts are concentrated in longer-term arrears categories.
Dean Oshiro, manager of Loan Services, explained the collection approach: initial telephone outreach and letters, then field/site visits and face-to-face contact, and finally contested-case hearings for accounts where staff have exhausted administrative remedies. Staff said that roughly half of delinquent borrowers who engage with staff ultimately return to current status through repayment plans, loan refinancing, or assistance from nonprofit partners.
Commissioners asked for further clarification on the large proportion of accounts in the 180-day category (seriously delinquent). Department leaders said that staff are reorganizing to have a dedicated collections team separate from loan originations, are increasing outreach and are exploring third-party servicing partners and use of Salesforce to streamline notices and case management.
Juan Garcia and staff also described a refinancing option available to some borrowers: if a defaulted borrower makes 12 consecutive monthly payments, DHHL may allow a refinance that renders the account current. Commissioners encouraged expanded borrower counseling and use of available assistance programs to minimize lease cancellations.
Separately, Hawaii Community Lending (HCL) and other housing partners present at the meeting offered resources: renovation and repair loans, homeowner assistance programs, and a planned homeowner assistance program launching Oct. 1 to help households at or below 80% AMI get current on mortgages.
Staff said they would continue to provide monthly delinquency reports and are prioritizing cases likely to proceed to contested-case hearings.
