Honolulu Foreclosure Defense Attorney Answers Frequently Asked Questions About Home Foreclosure in Hawaii

At the Law Office of Damon M. Senaha in Honolulu we are pleased to provide answers to the following questions our lawyers frequently encounter as we provide foreclosure defense and loss mitigation services to homeowners throughout Hawaii. If you have other questions, or if you need immediate assistance negotiating a loan workout, short sale or deed in lieu of foreclosure, or if you are facing foreclosure proceedings, contact our office to speak with our attorney.

I’ve been working with the bank on getting a loan modification, so I don’t need to worry about foreclosure, right?

It is important to understand that the bank is under no obligation to agree to a loan modification, even if you are working through a government program such as Making Home Affordable. Also, sometimes loan modifications are only temporary, so be careful when negotiating a loan workout with the bank, and make sure you fully understand and clearly spell out what is being agreed upon.

Another important point to consider is that the bank’s loss mitigation department may not be sharing information with its foreclosure department. This means that while you are spending months going back and forth with the loss mitigation dept. on your loan mod, bank lawyers in another department may be proceeding with a foreclosure and getting ready to sell your house out from under you.

What is the difference between a judicial and non-judicial foreclosure?

In a judicial foreclosure, the lender files a lawsuit to foreclose, and the whole matter is heard in court, where you may have defenses if the foreclosure is wrongful. In a non-judicial foreclosure, the lender proceeds directly to hold a sale of the property once you are in default. You still have rights in a non-judicial foreclosure, however, and the bank must follow specific rules to exercise its power of sale, including participating in mediation under Hawaii’s Mortgage Foreclosure Dispute Resolution Program.

A non-judicial foreclosure can be converted to a judicial foreclosure in many instances, which may be favorable depending upon your particular circumstances. Our foreclosure defense and loss mitigation attorney can help with both judicial and non-judicial foreclosures.

What is a deficiency judgment?

If you walk away from a home that is underwater and let the bank foreclose on the property, you may think that is the end of it, but not always. If the bank sells the property for less than what is owed on the mortgage, they may still come after you for the deficiency. They would do this through a lawsuit, and if they obtain a judgment for the deficiency, they could collect the judgment by putting a lien on your other property, garnishing your wages, or taking other collection actions. Deficiency judgments are generally allowed in judicial foreclosures but usually disallowed in non-judicial foreclosures.

Likewise, if you sell your home in a Short Sale, or sign over title to the bank with a Deed in Lieu of Foreclosure, you could again be liable for a deficiency if the amount the bank gets for the home is less than what you owe. It is important when negotiating a Short Sale or Deed in Lieu with the bank to make sure they will accept the deed or the proceeds of the sale as payment in full and not pursue you for any deficiency. You should get this promise in writing and have the transaction prepared or reviewed by an attorney before agreeing to it.

Are there any special protections from home foreclosure for military servicemembers?

Yes. The Servicemembers Civil Relief Act allows a servicemember to delay the time required to respond to a legal complaint until 60 days after returning from active duty. This extra time can be vital to a servicemember who is deployed overseas or on an active duty assignment when a notice of default or sale is filed, giving the soldier crucial time to deal with the complaint. Also, Hawaii Statutes 657D-1 to 657D-63 allow members of the state military forces to postpone or suspend legal proceedings during a period of military service, including evictions and foreclosures.

Hawaii laws granting civil relief for state military forces can be complex. At the Law Office of Damon M. Senaha we provide knowledgeable legal advice and skilled representation to military servicemembers in foreclosure defense, loss mitigation and related real estate matters.