§454-8  Penalty, contracts void. 
Violation of this chapter shall be punishable by a fine of not more than $1,000
or imprisonment of not more than one year, or both.  Any contract entered into
by any person with any unlicensed mortgage broker or solicitor shall be void
and unenforceable. [L 1967, c 228, §9; HRS §454-8]



 



Case Notes



 



  The broad language of this section, which expressly
invalidates "any contract entered into by any person with any unlicensed
mortgage broker", read in conjunction with the definition of
"mortgage broker" as set forth in §454-1, compels the conclusion that
a note and mortgage designating the broker as the creditor as a result of the
broker's brokering activities falls within the proscription of this chapter. 
96 H. 289, 30 P.3d 895.



  This section must be interpreted to invalidate only those
contracts into which unlicensed mortgage brokers enter in their capacity as
mortgage brokers within the meaning of §454-1.  96 H. 289, 30 P.3d 895.



  Where a partnership was a mortgage broker within the meaning
of §454-1, and the partnership-broker was unlicensed, the promissory note and
mortgage procured by the partnership-broker were void and unenforceable
pursuant to this section, and a subsequent assignee also could not enforce the
contracts.  96 H. 289, 30 P.3d 895.



  Where mortgage was entered into between mortgagor and
mortgagee and not by mortgage broker, even if mortgage broker or solicitor who
participated in the loan transaction with mortgagor was unlicensed, it did not
void the mortgage; this section does not in any manner provide any right for a
mortgagor to set aside a contract that is not between the unlicensed broker and
the mortgagor.  106 H. 406 (App.), 105 P.3d 1212.



  As this chapter was not intended to regulate mortgage transactions
on the secondary market, the fact that lender-assignor was not licensed in
Hawaii at the time the mortgage was executed had no bearing on the suit; thus,
appellants' contention that assignee of mortgage lacked standing because the
mortgage was unenforceable as a consequence of lender-assignor being an
unlicensed mortgage broker had no merit.  117 H. 506 (App.), 184 P.3d 821.