Perfect Title client
losing family home

Foreclosure is approved against
Edith Mar, who cited its report when
she stopped making payments

By Rob Perez
Star-Bulletin

A state judge has approved the foreclosure sale of a Kapahulu home whose owner stopped paying her mortgage based on the findings of Perfect Title Co.

Barring an unforeseen development, Circuit Judge Virginia Crandall's order confirming the sale means Edith Mar will lose the home her family has owned since 1920.

Mar would be the first homeowner to lose a home after refusing to make mortgage payments based on a Perfect Title conclusion -- disputed by her lenders and title insurer -- that title to the property was no good.

"This will serve as an unfortunate lesson to all of those (homeowners) who believe in Perfect Title," said Jeff Lau, an attorney who represents one of the lenders in the case.

Perfect Title uses 19th century Hawaiian Kingdom law to trace property ownership to the 1840s. The company invariably finds that existing titles are defective, usually claiming that any conveyance of property since the 1893 overthrow of the monarchy is invalid.

A handful of homeowners have cited Perfect Title's findings to stop paying their mortgages, arguing that they never got clear title to their homes. But lenders have dismissed the company's conclusions as absurd and are foreclosing on those homeowners.

Several judges also have found the company's logic to be flawed, and Perfect Title officials are under investigation for theft, racketeering and tax evasion.

Even though Mar's six-bedroom house was sold at auction in February, the order confirming the sale was held up by a variety of issues, including Mar's subsequent claim that she was duped by Perfect Title.

Now that the order is approved, Lau said he expects the sale to close in about a month.

If the Mars are still in the home at that point, they can be evicted, but that would be up to the buyer, Winifred Lee.

Lee bid $290,000 for the property -- roughly half its assessed value.

Nathaniel Lum, Lee's attorney, said his client hopes the property transfer goes peacefully. "She doesn't want to have Mrs. Mar forcibly evicted," Lum said. But his client will seek eviction if the Mars aren't cooperative, he said.

Mar could not be reached for comment. She previously has said she didn't believe she would lose her home.

Perfect Title officials say they don't tell people to stop paying their mortgages.

Mar can appeal Crandall's decision to the Hawaii Supreme Court. But an appeal shouldn't delay the closing unless Mar is able to post a bond, Lau said.

While other homeowners have lost homes to foreclosure even after citing Perfect Title research, their cases are different from Mar's. They hired the company after the foreclosure process started, presumably hoping to stave off foreclosure.

With Mar, Perfect Title was involved from the beginning. Lenders began the foreclosure process only after Mar, citing Perfect Title's findings, stopped making her payments.