§667-5 Foreclosure under power of sale; notice; affidavit after sale; deficiency judgments. (a) When a power of sale is contained in a mortgage, and where the mortgagee, the mortgagee's successor in interest, or any person authorized by the power to act in the premises, desires to foreclose under power of sale upon breach of a condition of the mortgage, the mortgagee, successor, or person shall be represented by an attorney who is licensed to practice law in the State and is physically located in the State. The attorney shall:
(1) Give notice of the mortgagee's, successor's, or person's intention to foreclose the mortgage and of the sale of the mortgaged property as follows:
(A) By serving, not less than twenty-one days before the date of sale, written notice of intent to foreclose on all persons entitled to notice under this part in the same manner as service of a civil complaint under chapter 634 and the Hawaii rules of civil procedure; provided that in the case of nonjudicial foreclosure of a lien by an association against a mortgagor who is not an owner-occupant, the association shall mail the notice by certified or registered mail, not less than twenty-one days before the date of sale, to:
(i) The unit owner at the address shown in the records of the association and, if different, at the address of the unit being foreclosed; and
(ii) All mortgage creditors whose names are known or can be discovered by the association; and
(B) By publication of the notice once in each of three successive weeks, constituting three publications with the last publication to be not less than fourteen days before the day of sale, in a daily newspaper having the largest general circulation in the specific county in which the mortgaged property lies; provided that for property located in a county with a population of more than one hundred thousand but less than three hundred thousand, the public notice shall be published in the newspaper having the largest circulation expressly in the eastern or western half of the county, corresponding to the location of the subject property;
(2) Give notice of the mortgagor's right to elect to participate in the mortgage foreclosure dispute resolution program pursuant to section 667-75 or to convert the nonjudicial power of sale foreclosure to a judicial foreclosure pursuant to section 667-53; and
(3) Give any notices and do all acts as authorized or required by the power contained in the mortgage.
(b) Copies of the notice required under subsection (a) shall be:
(1) Filed with the state director of taxation; and
(2) Posted on the premises not less than twenty-one days before the day of sale.
(c) Upon the request of any person entitled to notice pursuant to this section and sections 667-5.5 and 667-6, the attorney, the mortgagee, successor, or person represented by the attorney shall disclose to the requestor the following information:
(1) The amount to cure the default, together with the estimated amount of the foreclosing mortgagee's attorneys' fees and costs, and all other fees and costs estimated to be incurred by the foreclosing mortgagee related to the default prior to the auction within five business days of the request; and
(2) The sale price of the mortgaged property once auctioned.
(d) Any sale, of which notice has been given pursuant to subsections (a) and (b) may be postponed from time to time by public announcement made by the mortgagee or by a person acting on the mortgagee's behalf. Upon request made by any person who is entitled to notice pursuant to section 667-5.5 or 667-6, or this section, the mortgagee or person acting on the mortgagee's behalf shall provide the date and time of a postponed auction, or if the auction is canceled, information that the auction was canceled. The mortgagee, within thirty days after selling the property in pursuance of the power, shall file a copy of the notice of sale and the mortgagee's affidavit, setting forth the mortgagee's acts in the premises fully and particularly, in the bureau of conveyances.
(e) The mortgagee or other person, excluding an association, who completes the nonjudicial foreclosure of a mortgage or other lien on residential property pursuant to this part shall not be entitled to pursue or obtain a deficiency judgment against an owner-occupant of the residential property who, at the time the notice of intent to foreclose is served, does not have a fee simple or leasehold ownership interest in any other real property.
Nothing in this section shall prohibit any other mortgagee or person who holds a lien on the residential property subject to the nonjudicial foreclosure, whose lien is subordinate to the mortgage being foreclosed and is extinguished by the nonjudicial foreclosure sale, from pursuing a monetary judgment against an owner-occupant.
(f) Subject to the requirements of part V, the affidavit and copy of the notice shall be recorded and indexed by the registrar, in the manner provided in chapter 501 or 502, as the case may be.
(g) This section is inapplicable if the mortgagee is foreclosing as to personal property only. [L 1874, c 33, §1; am L 1907, c 59, §1; am L 1911, c 108, §1; am L 1915, c 121, §1; RL 1925, §2879; RL 1935, §4724; am L 1937, c 138, §1; RL 1945, §12424; RL 1955, §336-5; am L 1967, c 256, §1; HRS §667-5; am L 1972, c 90, §9(e); gen ch 1985; am L 1989, c 20, §5; am L 2008, c 138, §1; am L 2011, c 48, §17]
Note
Moratorium until July 1, 2012 on all new nonjudicial foreclosure actions; reports through 2013. L 2011, c 48, §§40, 41.
Cross References
Publication, how made, see §601-13.
Further provisions as to notice, affidavit, see §667-7.
Law Journals and Reviews
Hawai‘i 2000 Report Regarding Lawyers' Opinion Letters in Mortgage Loan Transactions. 22 UH L. Rev. 347.
Mortgagor Protection Laws: A Proposal for Mortgage Foreclosure Reform in Hawai‘i. 24 UH L. Rev. 245.
Case Notes
Mortgagee in exercising power must not oppress debtor or sacrifice the estate. 5 H. 262. As to duty to sell in parcels, see 17 H. 49. Foreclosure not barred because statute of limitations has run against note but no deficiency judgment can be entered. 17 H. 49; 20 H. 620. Foreclosure barred, by analogy, by statute applicable to real actions. 15 H. 507. Ejectment and not bill in equity proper remedy for purchaser at sale under power, to obtain possession. 14 H. 515. Mere filing of bankruptcy petition between date of publication and date of sale does not invalidate sale but bankruptcy court may enjoin sale. 7 F.2d 576.
Plaintiff-appellant challenged this statute as violating the due process clause of the Fourteenth Amendment; district court's dismissal of the case for failure to state a claim because the sale was a purely private remedy and involved no state action, affirmed. 324 F.3d 1091.
Acts to be done by mortgagee not required to be done personally. 8 H. 108.
Publication in Hawaiian no longer required. 22 H. 183.
Constitutionality. 17 H. 49; 17 H. 528, 534. Validity of sale; provisions of power of sale must be followed. 5 H. 262; 17 H. 49. Redemption; no statute authorizes redemption after sale, and hence no right of redemption exists. 15 H. 271.
Chattel mortgages, duty to obtain best price. 35 H. 158.
An agreement created at a foreclosure sale conducted pursuant to this section is void and unenforceable where the foreclosure sale is invalid under the statute; the high bidder at such a sale is entitled only to return of his or her downpayment plus accrued interest. 121 H. 287, 218 P.3d 775.
Where, at the time of the foreclosure sale, mortgagors were no longer in default and, thus, were no longer in breach of a condition of the mortgage, and without such breach, defendant could not invoke the mortgage's power of sale clause, the subsequent foreclosure sale did not comply with the requirements of this section and was, thus, invalid. 121 H. 287, 218 P.3d 775.