Foreclosures in Hawaii can be judicial (through the court system) or nonjudicial (out of court). Currently, Hawaii has a law that requires lenders to offer foreclosure mediation to a borrower if it uses the nonjudicial process. As a result, most lenders file judicial foreclosures so they don't have to participate in mediation.
If you’re facing a Hawaii foreclosure, you should learn as much as you can about the state’s foreclosure laws, including how the judicial foreclosure process works, what type of notice you’ll receive about the foreclosure, whether you can reinstate the mortgage before the foreclosure sale, and if you could be responsible for paying a deficiency after the foreclosure.
Read on to learn about the key features of Hawaii’s foreclosure law and find out the citations to the statutes so you can review the law yourself.
The citations to Hawaii’s foreclosure statutes are:
The important parts of Hawaii’s foreclosure laws are summarized below. You can find more detailed articles on various aspects of Hawaii’s foreclosure law in Nolo’s Hawaii Foreclosure Law Center.
In the past, foreclosures in Hawaii were typically nonjudicial, which means they took place without court supervision. However, this changed in 2011 when the state implemented a “Mortgage Foreclosure Dispute Resolution Program” (foreclosure mediation) that applies to nonjudicial foreclosures. (For more information on the mediation program, see Nolo's article Hawaii's Mortgage Foreclosure Dispute Resolution Program.)
To bypass the mediation program, most lenders now use the judicial foreclosure process. (The legislature in Hawaii has advanced several bills to change the mediation law so that it applies to judicial foreclosures, but as of 2014, none have been successful.)
Since foreclosures in Hawaii are now usually judicial, this article focuses on that process.
To begin the foreclosure, the foreclosing party files a complaint (a lawsuit) in court and provides the borrower with notice of the suit by serving him or her with a summons and complaint. Haw. Rev. Stat. § 667-1.5. The borrower then has 20 days to respond. (Learn more about the difference between a foreclosure summons and complaint.)
If the foreclosing party wins the lawsuit, the borrower’s home will be sold and the proceeds paid to the foreclosing party in order to satisfy the mortgage loan debt. Prior to the sale, the foreclosing party must publish a notice of sale in a newspaper once each week for three weeks. Haw. Rev. Stat. § 667-20.
Hawaii law provides protections similar to the federal Servicemembers Civil Relief Act for members of the state military forces, including the right to postpone legal proceedings (such as a judicial foreclosure) and a prohibition on nonjudicial foreclosures. Haw. Rev. Stat. § § 657D-1 through 657-D63.
“Reinstating” is when a borrower catches up on the defaulted mortgage's missed payments (plus fees and costs) in order to stop a foreclosure. (Learn more about reinstatement to avoid foreclosure.)
Hawaii law does not provide the borrower with the right to reinstate before the sale in a judicial foreclosure. However, the terms of the mortgage may permit the borrower to reinstate or the foreclosing party may agree to a reinstatement.
Some states permit the foreclosed homeowner to redeem (repurchase) the home within a certain period of time after the foreclosure. In Hawaii, there is no right of redemption after the home has been foreclosed. (To get details on redemption rights in Hawaii, see Nolo’s article If I lose my home to foreclosure in Hawaii, can I get it back?)
When the total mortgage debt exceeds the foreclosure sale price, the difference is called a “deficiency.” Some states allow the lender to seek a personal judgment (called a “deficiency judgment”) against the borrower for this amount, while other states prohibit deficiency judgments with what are called anti-deficiency laws.
Hawaii does have an anti-deficiency law, but it only applies to nonjudicial foreclosures. Haw. Rev. Stat. § 667-38. Deficiency judgments are allowed in judicial foreclosures. (For details about the anti-deficiency law in Hawaii, see Hawaii Laws on Post-Foreclosure Deficiency Judgments.)
If the foreclosed homeowners don’t leave the home after a Hawaii judicial foreclosure sale, the new owner must get a court order (writ of possession) to remove the former homeowner.