In this article, you’ll get details about how Hawaii foreclosures work, as well as learn about both federal and state laws that protect homeowners during the process.
Federal law usually prevents the servicer from initiating a foreclosure until the borrower is more than 120 days delinquent on the loan. Also, under federal law, servicers are supposed to work with borrowers who are having trouble making monthly payments in a loss mitigation process.
Foreclosures in Hawaii are typically judicial, which means the foreclosing party (the “bank”) files a lawsuit in court to start the process.
Here’s what homeowners can expect if they default on their mortgage in Hawaii.
A judicial foreclosure officially starts when the bank files a lawsuit—called a “complaint”—in court. The borrower learns about the suit when served a copy of the complaint and a summons. (Haw. Rev. Stat. § 667-1.5). If the borrower doesn’t answer the lawsuit, the bank will get a default judgment allowing it to hold a foreclosure sale. If you respond to the lawsuit, however, the case will go through the litigation process. The lender might then request the court to grant summary judgment. A summary judgment motion asks that the court grant judgment in favor of the lender because there’s no dispute about the critical aspects of the case. If the court grants summary judgment for the lender—or you lose at trial—the judge will order the home sold at a foreclosure sale. Before the sale, notice of the sale must appear in a newspaper for three weeks.
Although Hawaii law does not give the homeowner the right to reinstate in a judicial foreclosure, the terms of the mortgage usually allow for it. If you want to do so, check your mortgage documents.
In some states, the borrower can redeem the property within a specific period after the foreclosure sale. Hawaii law, however, doesn’t provide a post-sale right of redemption.
In a judicial foreclosure, the foreclosing bank can get a deficiency judgment.
You can read Hawaii’s foreclosure laws in the Hawaii Revised Statutes §§ 667-1.5 and following (judicial foreclosures). While this article covers judicial foreclosure procedures, if you're facing a nonjudicial foreclosure, you can review Hawaii's nonjudicial foreclosure laws in §§ 667-21 through 667-41.
Statutes change, so checking them is always a good idea. How courts and agencies interpret and apply the law can also change. And some rules can even vary within a state. These are just some of the reasons to consult with an attorney if you’re facing a foreclosure.
If you're facing a judicial or nonjudicial foreclosure in Hawaii and want to learn more about the process, including your rights and whether you have any defenses to the foreclosure, consider talking to a foreclosure attorney. To get information about loss mitigation options, speak to a HUD-approved housing counselor.