Hawaii allows out-of-court foreclosure. It must be in accordance with a sale clause contained in the mortgage, which may require the lender to notify the borrower of any default on the loan before starting the foreclosure process.
A court foreclosure begins when the lender files the appropriate documents with the court asking the court to rule that the borrower is in default. The lender also delivers notice of the court filing to the borrower, or publishes the notice if they have trouble contacting the borrower. If the borrower does not respond to the court filings within 20 days, they are found in default and the lender can proceed with scheduling the foreclosure sale. The borrower may file a notice of appeal within 30 days after the court has declared them in default.
Up to three days prior to the sale, the borrower may cure the default and halt the sale by paying the debt and associated costs.
Notice Of Sale / Auction
For out-of-court foreclosures, the notice of foreclosure sale includes a description of the property, the terms of the sale, names of the parties involved, and the time and location of the sale. At least 21 days prior to the sale, the copy of the notice is posted on the property and mailed or delivered to the borrower. The lender publishes the notice of sale in a local newspaper once per week for three consecutive weeks, with the last publication at least 14 days before the day of sale. The sale is an auction where the highest bidder buys the property. The auction can be rescheduled, but the notices of sale must be resent and republished.
For court foreclosures, a commissioner is appointed to sell the property at public auction. The commissioner publishes the notice of sale in a local paper. The notice includes the auction date and open house dates, if any. Any party may bid at the auction and the winning bidder will be required to pay 10 percent of the bid in the form of cash or a cashier’s check. The highest bidder does not automatically get the property, as additional bidding may continue at a confirmation hearing. If the court finds the price fair, the sale is confirmed.
Hawaii offers no redemption rights for the borrower after the sale is confirmed.