This site provides information about Distressed Properties in Hawaii

While lower interest rates increases buyers activity and Hawaii is witnessing an increase in the numbers of home sales, many of these sales involve distressed properties. A large number of foreclosures sale and short -sales account for the total number of local real estate market. Distressed properties are houses in the foreclosure process. Some of these foreclosure homes are at the beginning of the foreclosure process, and are called pre-foreclosures, while others are at the end and are selling at auction, through government bids, or as a bank owned properties.  This page provides basic information about distressed properties in Hawaii. This page doesn't provide any legal information, but all information provided here only for educational purposes. If you have any questions during reading this page, please do not hesitate to contact me. Mahalo!

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What is a Distressed Property?

Who is a Distressed Property Consultant?

A Distressed Property is defined as any residential real property that:

.....is anyone who performs or offers to perform:

1. Is in foreclosure or at risk of foreclosure because payment of any loan that is secured by the residential real property is more than sixty days delinquent;
2. Had a lien or encumbrance charged against it because of non-payment of any taxes, lease assessments, association fees, or maintenance fees;
3. Is at risk of having a lien or encumbrance charged against it, association fees, or maintenance fees are more than ninety days delinquent;
4. Secures a loan for which a notice of default has been given; or
5. Secures a loan for that has been accelerated.

1. Stop or postpone the foreclosure sale or loss of any Distressed Property due to the non-payment of any loan that is secured by the Distressed Property;
2. Stop or postpone the charging of any lien or encumbrances against any Distressed Property or eliminate any lien or encumbrance charged against any Distressed Property for the non-payment of any taxes, leases assessments, association fees, or maintenance fees;
3. Obtain any forbearance from any beneficiary or mortgagee, or relief with respect to a tax sale of the Distressed Property;
4. Assist the owner to exercise any cure of default arising under Hawaii Law;
5. Obtain any extension of the period within which the owner may reinstate the owner's rights with the respect to the Distressed Property;
6. Obtain any waiver of an acceleration clause contained in any promissory secured by a mortgage on a Distressed Property or contained a in the mortgage;
7. Assist the owner in foreclosure, loan default or post-tax sale redemption period to obtain a loan or advantage of funds;
8. Avoid or ameliorate the impairment of the owner's credit resulting from the recording or filling of a notice of default or conduct of a foreclosure sale or tax sale; or
9. Save the owner's residence from foreclosure or loss of home due to non-payment of taxes.

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Foreclosure filings statewide soar 276%

The deterioration of Hawaii's economy and housing market helped produce another surge in foreclosure filings last month.

Statewide foreclosure filings more than tripled to 537 in February over 143 in the same month last year, according to real estate research firm RealtyTrac.

It was only the second time that Hawaii foreclosure filings have been above 500, and the third time over 400 since RealtyTrac began collecting and reporting data in 2006. Filings totaled 594 in September and 499 in December. The monthly average for all of last year was 278.

The surge of 276 percent last month was higher than any other state on a percentage basis, though the rate of filings per household — one filing per 944 households in Hawaii — was worse in 26 other states.                                                      Read All Article from Honolulu Advertiser

Hawaii Foreclosure Laws

House Committee Passes Bill Clarifying Act 137

The legal system in the United States of America is well equipped to cater to disputes arising out of sale and purchase of property. All states have their own version of the State Foreclosure Law. Under Hawaii foreclosure laws, lenders may resort to certain specified legal procedures to recover their losses due to defaulted mortgage payments and defaulted deeds of trust. On an average such legal processes take two months time to complete.

The House Consumer Protection and Commerce Committee favorably passed out Senate Bill 34 (SD1) on March 16. The bill excludes licensed real estate brokers and salespersons from the definition of Distressed Property consultants in Act 137 and prohibits certain conduct relating to the acquisition of an ownership interest in Distressed Property by licensed real estate brokers and salespersons.
 
The bill now goes to the House Judiciary Committee for consideration.
View HAR's testimony    View SB 34, SD1

The Foreclosure Proceedings in Hawaii

The Power of Sale Clause

The important documents needed for such judicial and non judicial foreclosure proceedings are the deed of trust and mortgages. The judicial and non judicial processes give leeway for Deficiency Judgments but not for Right of Redemption. For a judicial foreclosure it is the lender's responsibility to file a property foreclosure lawsuit. Once the foreclosure lawsuit is filed and the necessary procedures are carried out, the court officially declares a date of foreclosure auction. During the property foreclosure auction the foreclosure property is sold to the person who places the highest bid.

The inclusion of a "Power of Sale" clause in the security instruments calls for a non-judicial foreclosures. Under this clause, the signing of the security instruments binds the borrower to agreeing for sale of the property in case he doesn't meet payment terms as agreed upon. The only fact that differentiates a judicial foreclosure from a non-judicial foreclosure is the role played by the court. While a court order is essential for a judicial foreclosure it is not needed for a non judicial foreclosure.

In case the security instruments involved in a property foreclosure contain a power of sale clause then the terms and conditions laid down by the clause should be strictly adhered to by the lender and the borrower. However, when there is no such clause involved and the property foreclosure is subject to a non-judicial process then notices play an important part.

The Notice of Intent to Sell should be released on a public platform like a county newspaper. This notice should appear in the newspaper once a week for three continuous weeks. The last publication of the notice should date back to at least two weeks before the date of the foreclosure auction. Copies of the Notice of Intent to Sell must be reached to all relevant persons like the borrower, the state or county authorities and any other concerned person. The law requires this notice to be posted on the actual property premises at least three weeks prior to the foreclosure auction.

The notice must contain details like time and place of the auction, the outstanding balance on the distressed property, the address and legal description of the distressed property and names of the borrower and the lender. Other details regarding the actual sale must also be mentioned.

Foreclosures in Hawaii Top Cities (Source: http://www.foreclosuredeals.com)

Kailua Kona              Waianae               Kihei               Honolulu

Ewa Beach                 Hilo                        Pahoa             Kahului

Wailuku                    Waikoloa               Kapolei          Mililani

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