U.S. Supremes Asked To Review Case Involving Operation Of Hawaiian Non-Judicial Foreclosure Process Where Elderly Mentally-Impaired Widow Got The Boot

AOLs's DailyFinance reports:

• Among the many state systems governing foreclosure in this country, Hawaii has particularly draconian -- and nonjudicial -- process. It's based on a law that dates back to 1874, a statute that was a key mechanism used to take land away from native Hawaiians and whose history is riddled with fraud. Although Hawaiian law also allows for judicial foreclosures, the nonjudicial process -- when no judge is involved in the proceeding -- is much more commonly used. But for those suffering under Hawaii's foreclosure system, the question is: Can there be any relief?

• Suzanne Bonds is a Hawaii resident who was unbelievably exploited by the state's foreclosure process in 2004, but all her efforts to challenge what happened were rejected by Hawaii's courts. Now, her attorneys have asked the U.S. Supreme Court to intervene. Given the massive foreclosure tide swamping the nation, and the fact that the judiciary is regularly confronting fraud even in states where a judicial process is required for a lender to take a person's home, a hard look at the fairness of systems in the less-protective nonjudicial foreclosure states is crucial.

(Note: Unless otherwise linked, the information discussed below is drawn solely from the petition. No response brief has yet been filed.)

• Bonds was in her early 70s in 1998, when she inherited her Hawaii home from her husband. In 2001, she took out a mortgage with Ameriquest Home Mortgage, a notoriously predatory lender. By early 2004, Bonds was 78 and in terrible shape: Physically and mentally ill, she suffered from "heart failure, dementia and advanced state of senility, and psychotic and bipolar disorders" according to her physicians.

• Nonetheless in May, 2004 she was sent a letter saying that her property had been sold at public auction a month earlier. In her condition, she took no action until a concerned "care-giving church official" reviewed the letter and helped her get a lawyer. To add insult to injury, the bank sold the property for $634,900, a price at best half of what it was worth, meaning that the purchaser made an immediate and massive profit, while Bonds was stripped of substantial equity.

For more, see Foreclosures in Paradise: Will the Supreme Court Review Hawaii's Flawed System?