Project Workouts and Foreclosures
We represent lenders and have experience in commercial debt renegotiations involving Hawaii real estate. For residential and commercial lender clients we foreclose on mortgages and other security interest, in a judicial proceeding, and pursue Hawaii debt collection activities.
Hawaii Judicial Foreclosures
In a Hawaii judicial foreclosure, the lender/mortgagee files a Complaint in the Circuit Court where the real property is located, and immediately records a Notice of Pendency of Action in State of Hawaii Bureau of Conveyances or the Land Court to put all potential persons on notice about the foreclosure.
The lender serves the Complaint and Summons on all named defendants in Hawaii, but if defendants are on the mainland, then plaintiff is required to file an Ex Parte Motion for Order Service via Certified Mail or Private Process Server.
If the borrowers do not answer, then the lender would file a Request for Entry of Default to the court clerk. An Entry of Default by the court clerk is a prerequisite to filing a Motion of Default Judgment. If the borrowers answer the Complaint, a Motion for Summary Judgment, Default Judgment and Decree of Foreclosure will be filed. The Decree of Foreclosure appoints a Commissioner to take possession and sell the property.
Once the Commissioner files his Report of the sale, the lender can file a Motion for Order Approving Report of Commissioner, Confirming Sale of Real Property at Public Auction and Directing Distribution of Proceeds, Notice of Hearing of Motion for Order Approving Report of Commissioner.
There will be a confirmation hearing in which the borrower may raise any issues concerning the conduct of the sale, sales price or the associated costs and fees. If the Court should find no problem associated with the sale of the property, the Court will usually grant the Order Confirming Sale, Distribution of Proceeds, Deficiency Judgment, and for Writ of Possession.
The lender files the Deficiency Judgment in the Bureau of Conveyances and enforce it in exactly the same way as any other judgment awarded by a Circuit court. However, if the loan is a non-recourse loan, then the lender cannot get a Deficiency Judgment because the borrower is not personally liable.
If things go smoothly the judicial foreclosure process takes 6 to 9 months, although some take longer. Due to recent changes in non-judicial foreclosures the judicial foreclosure system is expected to take even longer.
Contact us today and learn how we can move your Hawaii foreclosures forward smoothly and quickly.
