What is the Hawaii foreclosure process? If you’re facing a potential foreclosure, it’s important to understand the timeline in which the process occurs. Keep in mind that until your house actually goes to sale, YOU STILL HAVE OPTIONS!
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Timeline: Typically anywhere from 4 to 10 months
Right of Redemption: None
Deficiency Judgments Allowed: Yes (but rarely enforced)
In Hawaii, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process. (please note that new rules are constantly being drafted and enforced)
Hawaii Foreclosure Process: Judicial
The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, the property will be auctioned off to the highest bidder. Unfortunately, many people mistakenly believe that the current foreclosure moratorium in place applies to all foreclosures, however it only applies to non-judicial foreclosures. Judicial foreclosures are still occurring in Hawaii.
Hawaii Foreclosure Process: Non-Judicial
Much more common in Hawaii, the non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A “Power of Sale” clause is the clause in a deed of trust or mortgage in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the “Power of Sale Foreclosure Guidelines”.
Power of Sale Foreclosure Guidelines
If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:
1. The notice of intent to foreclose must be published once a week for three (3) successive weeks, the last publication to be not less than fourteen (14) days before the day of sale, in a newspaper having a general circulation in the county in which the mortgaged property is located. On Oahu, this is going to be the Star Advertiser. The other Hawaiian Islands have their own publications where the foreclosure notices will be published.
Copies of the notice must be mailed or delivered to the mortgagor, the borrower, any prior or junior creditors, the state director of taxation and any other person entitled to receive notice. Additionally, the notice must be posted on the premises not less than twenty-one (21) days before the day of sale.
Said notice must state:
a) The date, time and place of the public sale
b) The dates and times of the two (2) open houses of the mortgaged property, or if there are not to be any open houses, the public shall so state
c) The unpaid balance of the moneys owed to the mortgagee under the mortgage agreement
d) A description of the mortgaged property, including the address or description of the location of the mortgaged property and the tax map key (TMK) number of the mortgaged property
e) The name of the mortgagor and the borrower
f) The name of the lender
g) The name of any prior or junior creditors having a recorded lien on the mortgaged property before the recordation of the notice of default
h) The name, the address in the State, and the telephone number in the State of the person in the State conducting the public sale
i) The terms and conditions of the public sale
2. Up until three (3) days before the sale, the borrower may cure the default and stop the sale by paying the lien debt, costs and reasonable attorney’s fees, unless otherwise agreed to between the lender and the borrower.
3. The sale, which may be held no earlier than fourteen (14) days after the last ad is published, is to be made at auction to the highest bidder.
4. Any sale, in which notice has been given, may be postponed from time to time by public announcement made by the lender or their representative.
The above information outlines the Hawaii foreclosure process. It’s important that you understand this should you find yourself being foreclosed upon by your bank or lender. If you need further information, then call us immediately at (808) 377-4379 or contact us here.
This information courtesy of my friends at PropTrackr.com.
If you’re facing a foreclosure or wondering how we might be able to help, then CONTACT US TODAY!