The mainland-based company behind a major shift in how foreclosure notices are publicized in Hawaii remains a mystery locally, but its business operations in the Pacific Northwest may provide clues on its plans for the islands.
RCO Hawaii LLLC, the legal firm that successfully lobbied state legislators this year to change requirements for publishing foreclosure legal notices, is closely affiliated with RIM Publications, which recently launched a newspaper and website, The Island Sun Weekly.
Executives behind the company and its affiliates in the Northwest did not respond to repeated Star-Advertiser requests for comment, and their exact plans have not been made public.
What is known is that RCO Hawaii, owned by Hawaii attorney Brett Ryan, has ties to several companies owned by attorneys Stephen D. Routh and David Fennell, including RIM Publications LLC, The Island Sun Weekly, Northwest Trustee Services Inc. and Foreclosure Expeditors/Initiators LLC, which services most of Hawaii’s nonjudicial foreclosures.
In several Northwestern markets, the companies run one-stop foreclosure trustee operations. Routh’s RIM Publications has started or bought newspapers in those markets for the purpose of running foreclosure ads, according to published reports.
The Island Sun Weekly started up in November, according to its Facebook page. However, finding a printed copy of the newspaper or contacting its newsroom can be frustrating. The publication does not have a listed phone number in Hawaii or a clearly marked physical presence in the islands.
The Island Sun Weekly Editor Dena Cassella, who did not respond to the Star-Advertiser’s requests for an interview, has a desk inside the Waterfront Plaza office of FEI, the foreclosure services vendor.
In Hawaii, The Island Sun Weekly is printed by Hawaii Hochi Ltd. and delivered to Cardinal Mailing Services, a direct-mail company. Neither firm could say where a resident could find a printed copy.
Based on the actions of sister publications in the Northwest, The Island Sun Weekly is expected to apply to the Hawaii Circuit Court to recognize it as a newspaper of general circulation as outlined in the recently enacted Act 182. If the publication, which has the same owners as FEI and Northwest Trustee Services, earns this designation, it can start publishing foreclosure ads, potentially raising the profit margin for its affiliated foreclosure trustee business.
The law change in Hawaii essentially allows foreclosure mills to create a captive market, where the public policy of notifying potential bidders could be diminished, said Frank Alexander, an Emory University law professor considered one of the nation’s authorities on foreclosure law.
"The only thing that is clear by virtue of this change is that those that run the foreclosure mills could suddenly generate dramatically higher income, which may bear no correlation at all to the cost of the foreclosure because they set the income themselves," he said.
