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. (To learn what to do—and what not do—if you’re facing a foreclosure, see Foreclosure Do’s and Don’ts.)
Federal law usually prevents the servicer from initiating a foreclosure until the borrower is more than 120 days delinquent on the loan. (To learn more about the federal law that delays the beginning of a foreclosure for 120 days, see How Soon Can Foreclosure Begin?)
Also under federal law, servicers are supposed to work with borrowers who are having trouble making monthly payments in a “loss mitigation” process. (“Loss mitigation” is what the mortgage servicing industry calls the process of working with the borrower to avoid a foreclosure.) (To learn more about federal mortgage servicing laws, see Federal Laws That Protect Homeowners During Foreclosure.)
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. (To learn generally what happens if you do file an answer to the suit, see Fighting Your Foreclosure in Court.)
Before the sale, a notice must appear in a newspaper for three weeks. (Haw. Rev. Stat. § 667-20).
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 loan documents.
In some states, the borrower can redeem (repurchase) the property within a specific period after the foreclosure sale. Hawaii law, however, doesn’t provide a post-sale right of redemption.
In Hawaii, the bank can get a deficiency judgment and go after the borrower for the outstanding amount after a judicial foreclosure.
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. (To learn how to look up foreclosure laws, see How to Find the Foreclosure Laws in Your State.)
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.