Hawaii Foreclosure Law

Lenders in Hawaii can foreclose on mortgages and deeds of trust that are in default. Foreclosure can follow the judicial or non-judicial process, depending on the powers assigned to the lender in the contract. The average wait time for a Hawaii foreclosure is 60 days.

Judicial foreclosure
A judicial foreclosure involves filing a case against the borrower in order to get a court order to foreclose. This process is used when the contract does not contain a Power of Sale clause, which would otherwise allow the lender to simply sell the home. With a judicial foreclosure, the court has to declare the foreclosure before the property is put up for auction. The home is usually sold to the highest bidder at the time of the sale.

Non-judicial foreclosure
If the contract includes a Power of Sale clause, the foreclosure follows a non-judicial process. The terms outlined in the clause will be followed, unless they’re not specified. In that case, the foreclosure will proceed as follows:

1) The lender publishes a Notice of Intent to Foreclose in a local newspaper for at least three consecutive weeks, with the last ad appearing 14 days before the intended sale date. The notice must state the following information:

-the time, date, and venue of the sale;
-the time and date of the any open houses (the state allows two);
-the balance owed;
-a legal description of the home, including the address;
-the names of the lender, borrower, and creditors with a current claim on the property;
-the name and local contact information of the person conducting the sale;
-the terms of the foreclosure sale

2) The notice is mailed to the borrower, any current and previous creditors, the director of taxation, and other people legally entitled to the information.

3) The same notice is posted on the property premises at least 21 days before the sale date.

The borrower has up to three days before the sale to cure the default and redeem his home. This is done by settling the lien debt, attorney’s fees, and other reasonable costs. If any other payments are required in the contract, they must also be paid. If the debt isn’t settled by the deadline, the sale proceeds and the home is sold to the highest bidder. Hawaii does not give a Right of Redemption to the borrower, which means it cannot be redeemed once the sale is made. Lenders can also file a deficiency suit, a personal claim against the borrower, after the foreclosure if the sale does not cover the balance owed.

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