How foreclosure works in Hawaii

The notices you will receive in Hawaii, in order

1. Summons and complaint

   Served on you after the federal 120-day wait, when the lender files in circuit court

   This starts a foreclosure by action. You have 20 days after being served to file a written answer with the court. Missing that deadline can let the lender win without your side being heard, so contact Legal Aid or a lawyer the day you are served.

   HRS § 667-1.5; Haw. R. Civ. P. 12(a)

2. Attorney affirmation

   Filed by the lender's attorney when the case is started

   For residential property, the lender's attorney must sign a statement under penalty of perjury that the attorney checked with the lender and that the papers contain no false statements and the lender has standing to sue. Look for it in the papers you were served.

   HRS § 667-17

3. Decree of foreclosure and order of sale

   Entered by the judge if the lender wins

   The court decides the amount due without a jury and orders the home sold. A commissioner is appointed to advertise and run the auction. The judgment on a decree of foreclosure can be appealed, within the time set by court rules.

   HRS §§ 667-1.5, 667-41, 667-51

4. Public notice of public sale

   Published once a week for three weeks; the auction is at least 14 days after the third ad

   This is the commissioner's notice of the auction date, time and place. It may instead be posted on a state website at least 28 days before the sale, with at least one newspaper ad 14 days or more before. Note the date and the commissioner's name and phone number.

   HRS § 667-20

5. Order confirming sale and any deficiency judgment

   After the auction, at a court hearing

   The sale is not complete until the court approves it. The court then directs the commissioner how to pay out the money. If the price did not cover the debt, the lender can ask for a deficiency judgment against you.

   HRS §§ 667-41, 667-51

6. Notice of default and intention to foreclose (power of sale cases only)

   Served by the lender instead of a lawsuit; gives at least 60 days to cure

   If you get this instead of a summons, the lender is foreclosing without a court. The notice must list the amount to cure, the deadline, the lender's Hawaii attorney, and your rights as an owner-occupant to dispute resolution or to convert the case to court. Both of those choices have 30-day deadlines.

   HRS §§ 667-22, 667-55, 667-75

The legal steps in Hawaii

1. You fall behind on payments

   Under federal rules, the servicer generally cannot start a foreclosure until you are more than 120 days behind. Use this time to contact your servicer, apply for help in writing, and talk to a free housing counselor or Legal Aid.

   12 C.F.R. § 1024.41(f)

2. The lender files a foreclosure lawsuit

   The lender files a complaint in the circuit court for the island where the home is located. For a home loan, the lender's attorney must file a signed statement that the documents were checked and are accurate. You are served with a summons and complaint and have 20 days to file a written answer. Do not skip this step: an answer is how you raise defenses and stay part of the case.

   HRS §§ 667-1.5, 667-17; Haw. R. Civ. P. 12(a)

3. The judge decides the case

   The circuit court, without a jury, decides how much is owed and whether to order foreclosure. If the lender wins, the judge appoints a neutral commissioner to sell the home. On Hawaii Island, owner-occupants can ask for mediation with the lender before the judge hears the case. Even after a case starts, your lender may still let you reinstate, so ask.

   HRS §§ 667-1.5, 667-41

4. The sale is advertised and the auction is held

   The commissioner must publish notice of the sale in a newspaper once a week for three weeks in a row, and the auction cannot be held sooner than 14 days after the third ad. The highest bidder wins, and the lender can bid what it is owed.

   HRS § 667-20

5. The court approves the sale and the money is paid out

   The sale is not complete until the court approves it. The court tells the commissioner whom to pay: lienholders in order of priority, and any money left over goes to you. If the sale did not cover the debt, the lender can ask the court for a deficiency judgment against you.

   HRS §§ 667-3, 667-10, 667-41

6. Moving out

   After the court approves the sale and the buyer gets title, the buyer can get a court order for possession if you have not moved. Ask Legal Aid or a lawyer how much time you have in your case, because the court sets it.

7. If the lender uses the power of sale process instead

   The lender must serve a notice of default that gives you at least 60 days to cure, and must file it with the state when the home is owner-occupied. As an owner-occupant you then have 30 days to choose the state's Mortgage Foreclosure Dispute Resolution program, or 30 days after service to convert the case to a court foreclosure. The sale cannot be held until at least 60 days after the notice of sale is sent out, and you can still cure up to three business days before the sale.

   HRS §§ 667-22, 667-25, 667-27, 667-53, 667-78

Common questions in Hawaii