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Buying a piece of tropical beauty in Hawaii usually involves taking out a mortgage. When the mortgage payments aren't made on time, the mortgage might default. A lender can opt to file a foreclosure on a property if the borrower doesn't remedy a defaulted mortgage in accordance with the mortgage contract.
Lenders in Hawaii can opt to use the judicial foreclosure or non-judicial foreclosure process in Hawaii. Historically, most foreclosures were non-judicial. More recently, lenders have begun shifting to judicial foreclosures as a way to bypass having to follow the terms of the state's Mortgage Foreclosure Dispute Resolution.
Judicial foreclosures in Hawaii involve the lender filing a lawsuit to initiate the foreclosure. Once served with the summons and complaint, the homeowner has 20 days to respond. The process continues to move through the court system. Most judicial foreclosures take around 60 days to complete.
Non-judicial foreclosures are only possible if there is a power of sale clause in the mortgage. The process is similar to the judicial foreclosure, but it doesn't involve the court.
A notice of sale must be placed in the newspaper for three weeks at a rate of once per week. The final notice has to be no less than 14 days prior to the sale. As an alternative method, the lender can publish a notice on a state website not less than 28 days prior to the sale. When the online method is used, at least one notice has to be placed in the newspaper at least 14 days before the sale.
In the case of a non-judicial foreclosure, a notice has to be posted at the home at least 21 days prior to the sale. This is in addition to the other notice of sale requirements.
The MFDR is a program that only applies to non-judicial foreclosures. This program allows homeowners to go through mediation to try to find an alternative to foreclosure. In order for a homeowner to participate in the program, the property has to be a residential, owner-occupied property. When the non-judicial foreclosure process is started, the Department of Commerce and Consumer Affairs - Office of Administrative Hearings will send the homeowner the notice regarding dispute resolution. The homeowner has 30 days to respond by submitting the participation form with a nonrefundable fee. If no action is taken within 30 days, the homeowner loses the right to go through mediation.
Borrowers have until three days prior to a sale to remedy the default. They must pay the lien debt, reasonable attorney fees, and costs unless they come to another agreement with the lender. There are no rights for redemption in Hawaii once the foreclosure is completed. In the case of a judicial foreclosure, the lender can file a lawsuit against the borrower for a deficiency unless a ruling was made by the court regarding deficiency when the foreclosure was finalized.
The rights of homeowners to fight foreclosure in Hawaii depends on the type of foreclosure process being used. Anyone who gets a foreclosure notice should work quickly to understand their options. Seeking help from foreclosure lawyers might help borrowers to learn about all options so they can make informed choices.
This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified foreclosure and alternatives lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact a local foreclosure and alternatives attorney to discuss your specific legal situation.