Malia is a Hawaii real estate licensee explaining the judicial foreclosure process to a buyer client who recently relocated from California, where non-judicial (trustee sale) foreclosures are standard. Which of the following statements about Hawaii's foreclosure process is NOT accurate?
Correct Answer
C) A lender who completes a judicial foreclosure in Hawaii automatically waives any right to pursue a deficiency judgment against the borrower.
Statement C is NOT accurate and is therefore the correct answer to this EXCEPT/NOT question. Under Hawaii's judicial foreclosure process, a lender does NOT automatically waive the right to pursue a deficiency judgment simply by completing the foreclosure. After the court-ordered sale, if the auction proceeds are insufficient to satisfy the outstanding debt and allowable costs, the lender may petition the court for a deficiency judgment against the borrower for the remaining balance. There is no automatic waiver of deficiency rights solely because the judicial process was used.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
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