Hawaii Foreclosure Laws



How are mortgage liens treated in Hawaii?

Hawaii is known as a lien theory state where the property acts as security for the underlying loan. The document that places the lien on the property is called a mortgage.


How are Hawaii mortgages foreclosed?

The primary method of foreclosure in Hawaii involves what is known as non-judicial foreclosure. This type of foreclosure does not involve court action but requires notice commonly called foreclosure by sale. When the mortgage is initially signed it will usually contain a provision called a power of sale clause, which upon default allows an attorney to foreclose on the property in order to satisfy the underlying defaulted loan that is sometimes referred to as a note. Because this is a non-judicial remedy, there are very stringent notice requirements and the legal documents are required to contain the power of sale language in order to use this type of foreclosure method.

Power of Sale Notice Requirements:

  1. The lender publish a notice of foreclosure sale once per week for three (3) successive weeks in a newspaper of general circulation in the county in which the property is located. The last publication cannot be less than fourteen (14) days before the sale.
  2. Notice of foreclosure as described above must be served on borrower and all interested parties and be posted at the premises to be foreclosed not less than twenty one (21) days before the sale.

In Hawaii, the lenders can also go to court in what is known as a judicial foreclosure proceeding where the court must issue a final judgment of foreclosure. This process is called foreclosure by action. The property is then sold as part of a publicly noticed sale by the sheriff. A complaint is filed in court along with what is known a lis pendens. A lis pendens is a recorded document that provides public notice that the property is being foreclosed upon.


What are the legal instruments that establish a Hawaii mortgage?

The documents are known as the mortgage or in a commercial transaction, a security agreement. Sometimes the mortgage document is combined with the security agreement. A mortgage is filed to evidence the underlying debt and terms of repayment, which is set forth in the note.


How long does it take to foreclose a property in Hawaii?

Depending on the timing of the various required notices, it usually takes approximately 60-90 days to effectuate an uncontested non-judicial foreclosure. This process may be delayed if the borrower contests the action in court, seeks delays and adjournments of sales, or files for bankruptcy.


Is there a right of redemption in Hawaii?

Hawaii has no statutory right of redemption, which would allow a party whose property has been foreclosed to reclaim that property by making payment in full of the sum of the unpaid loan plus costs. The borrower may cure any default up until three (3) days before the foreclosure sale by payment of all arrearages, costs and fees to include attorney’s fees.


Are deficiency judgments permitted in Hawaii?

Yes, a deficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount that the underlying mortgage secures.


What statutes govern Hawaii foreclosures?

The laws that govern Hawaii non-judicial foreclosures are found in Chapter 667 et. seq., Hawaii Revised Statutes.


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