A Hawaii borrower defaults on her mortgage and the lender wants to foreclose. The lender's attorney advises that Hawaii's primary foreclosure method will require court involvement. Which of the following correctly describes the default foreclosure process in Hawaii?
Correct Answer
B) Hawaii uses judicial foreclosure as its primary method, requiring the lender to file a lawsuit and obtain a court judgment before the property can be sold
Hawaii's primary foreclosure method is judicial foreclosure, which requires the lender (mortgagee) to file a lawsuit in court, obtain a judgment, and then conduct a court-supervised sale of the property. This is directly connected to Hawaii's use of the mortgage (rather than a deed of trust) as its primary security instrument. Because mortgages do not inherently contain power-of-sale clauses as deeds of trust do, judicial foreclosure is the standard process. Note: Hawaii did enact a non-judicial foreclosure statute that was later significantly restricted, making judicial foreclosure the primary tested method.
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