Paul Clark
In this Blog we open the conversation with
economic loss caused by the current mortgage
crisis.
Hawaii Foreclosure Law Summary
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 property to pay off the
balance on a loan in the event of the 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:
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.
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.
Said notice must state: 1) The date, time,
and place of the public sale; 2) The dates
and times of the two (2) open houses of the
mortgaged property, or if there will not to
be any open houses, the public notice shall
so state; 3) The unpaid balance of the
moneys owed to the mortgagee under the
mortgage agreement; 4) 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; 5) The name of the
mortgagor and the borrower; 6) the name of
the lender; 7) The name of any prior or
junior creditors having a recorded lien on
the mortgaged property before the
recordation of the notice of default; 8) The
name, the address in the State, and the
telephone number in the State of the person
in the State conducting the public sale; and
9) The terms and conditions of the public
sale.
Additional wording, as required by the State
of Hawaii, may be found
here.
Up 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 to 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
public announcement made by the lender or
their representative.
