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Nonprofit lender proposes loan workouts alongside HAP funds to address DHHL delinquencies
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Summary
Hawaii Community Lending proposed combining Homeowner Assistance Program (HAP) administration with targeted loan workouts to reduce DHHL’s delinquency portfolio, which staff reported at 226 loans in Feb. 2024 and 227 in Feb. 2025; commissioners asked for a written proposal and for staff to update on contested cases.
Kahonani Mahoe Thone, servicing director at Hawaii Community Lending (HCL), urged the commission to pair HAP/NAHASDA grant administration with active loan‑workout services to address DHHL’s high delinquency levels.
Thone told the commission DHHL’s direct‑loan portfolio showed 226 loans in delinquency in February 2024 and 227 in February 2025, with severely delinquent loans (180 days past due) rising from 30 to 56 in that period. “There’s no change in your delinquency; the amount of homeowners still in delinquency is 227,” she said, and proposed that grant funds be used not only to bring accounts current but to rewrite loans and perform workouts to prevent future defaults.
Thone said HCL has experience administering mortgage relief programs and loss‑mitigation work and asked the commission to allow HCL to add loan‑workout services to the contract it is awaiting from the Attorney General. Commissioner Nevis and HCL discussed documenting the proposed additional services as a formal written proposal so the existing contract process is not delayed.
Commissioners asked staff for updates on contested cases tied to severely delinquent loans and agreed HCL should submit a formal proposal describing how workouts would be structured alongside HAP administration. No formal contract action was recorded at the meeting.
