Facing Foreclosure in Hawai'i — Understanding your timeline, your rights, and your exit options.

Foreclosure is when a lender takes back the property because the homeowner has defaulted on the mortgage. In Hawai'i, most foreclosures are non-judicial — meaning the lender doesn't need a court order to sell the property. This makes the process fast, but it also gives you specific windows of time to respond.

How it starts: You receive a Notice of Default (NOD) when you're behind on payments. This is your signal to act immediately. You then have about 14 days to request free state mediation through Hawai'i's Mortgage Foreclosure Dispute Resolution (MFDR) program. After that, the lender publishes a Notice of Sale, and the auction follows within 30+ days.

Not all foreclosures are mortgage foreclosures. In Hawai'i, you can face foreclosure from multiple sources, each with different timelines and solutions:

Important: You can face multiple foreclosures simultaneously — mortgage + HOA + tax liens all at once. Each requires different action.

This is critical: From Notice of Default to auction, you typically have 60–90 days in non-judicial foreclosure. The window is small.

You have more rights than many homeowners realize:

Right to Mediation: Hawai'i law gives you the right to request free Mortgage Foreclosure Dispute Resolution (MFDR) mediation within 14 days of receiving a Notice of Default. Your lender must participate. This is a real window — use it.

Right to Remain in the Home: You cannot be physically removed from your home until after the foreclosure sale is legally complete. Moving out early can waive important rights.

Right to Redemption (Limited): Hawai'i's non-judicial foreclosure does NOT allow post-sale redemption rights (unlike some states). This means once the property is sold at auction, you typically have no further legal claim.

Deficiency Judgment Protection (Non-Judicial Only): If your lender uses non-judicial foreclosure and your property is residential and owner-occupied, the lender CANNOT pursue a deficiency judgment against you for the shortfall after the sale. This is a major protection in Hawai'i.

SCRA Protection (Military): If you're active duty military, the Servicemembers Civil Relief Act (SCRA) prevents foreclosure without a court order. Contact your JAG office immediately if you're active duty.

The Credit Damage: A foreclosure typically drops your credit score by 150+ points depending on your starting score. Higher scores take bigger hits.

How Long It Stays: The foreclosure remains on your credit report for 7 years from the first missed payment that triggered the process.

What Happens After: Foreclosure is more damaging to credit than short sale, but recovery is possible. With responsible financial behavior (paying all bills on time, reducing credit card debt), you can start seeing improvement within 2–3 years and potentially qualify for new mortgage in 3–5 years.

Wage Garnishment Risk: If the foreclosure sale doesn't cover the full debt and your lender pursues a deficiency judgment (see Your Rights section above), you could face wage garnishment. This is a serious financial consequence.

You Don't Automatically Lose Everything: If the home sells at auction for more than you owe (uncommon but possible), you're entitled to the surplus funds. If it sells for less, you typically owe nothing more in non-judicial foreclosure on owner-occupied property.

Moving Out Timeline: You must move out after the foreclosure sale is complete. The lender or new owner will likely file for an eviction if you don't leave voluntarily. Hawaii's eviction timeline is typically 30–45 days.

Deficiency Judgment (If Judicial Foreclosure): If your lender filed a judicial foreclosure (court case), they may pursue a deficiency judgment for the difference between the sale price and what you owed. The lender has up to 1 year to file.

Your Possessions: Anything you leave in the home after the sale belongs to the new owner. Remove your personal items before moving out.

Credit Recovery is Possible: Yes, you can rebuild after foreclosure. The damage is significant, but with good credit habits, you can improve and eventually qualify for new financing.

⚠️ VA Loan Holders — Check This BEFORE MFDR Mediation

If your loan is VA-guaranteed, you may have access to a more powerful tool than anything available through mediation or short sale: the new VA Partial Claim Program (created July 2025). This program can bring your loan current without changing your monthly payment or interest rate — and without selling your home. You can keep your home, keep your credit clean, and move forward. Call the VA Regional Loan Center FIRST at 877-827-3702 (option 5) BEFORE requesting MFDR mediation or contacting your servicer. Many VA loan holders don't know this option exists. See full details on the Military & Veteran page →