Quick Facts
– Judicial Foreclosure Available: Yes
– Non-Judicial Foreclosure Available: Yes
– Primary Security Instruments: Deed of Trust, Mortgage
– Timeline: Typically 60 days
– Right of Redemption: None
– Deficiency Judgments Allowed: Yes
In Hawaii, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.
Judicial Foreclosure
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.
Non-Judicial Foreclosure
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 the property to pay off the balance on the loan in the event of 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:
Notice By Publication
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.
Notice By Mail
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.
Notice Must Be Specific And State:
- The date, time, and place of the public sale.
- The dates and times of the two (2) open houses of the mortgaged property, or if there will not be any open houses, the public notice shall state.
- The unpaid balance of the money owed to the mortgagee under the mortgage agreement.
- A description of the mortgaged property, including the address or description of the location of the mortgaged property and the tax map key number of the mortgaged property.
- The name of the mortgagor and the borrower.
- The name of the lender.
- The name of any prior or junior creditors having a recorded lien on the mortgaged property before the recordation of the notice of default.
- The name, address in the State, and telephone number in the State of the person in the State conducting the public sale.
- The terms and conditions of the public sale.
Right Of Borrower To Cure Default
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 between the lender and the borrower.
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.
Any sale in which notice has been given may be postponed from time to time by the public announcement made by the lender or their representative.
