All Things Maui Real Estate

Mortgage Acceleration and Foreclosure Laws in Hawaii

No homeowner wants to face any financial obligations regarding issues concerning their homes. And if you're reading this right now, you're either in a perfect place with your mortgage payments or stressed that your property might be facing a foreclosure procedure. 

Well, you’ll be glad to know that you're in the right place because, in this article, we will be discussing either extreme. We’ll also give you helpful information that you could use to better your experience, whether positive or negative. Let's face it, any bit of information, including a simple statement posted on the House Heroes' blog, can be useful. So don't despair because we are here to help. 

What Are Mortgage Accelerations?

In simple terms, mortgage acceleration occurs when the homeowner of a property chooses to settle their mortgage loan faster than the agreed term stipulated in the agreement. This is a positive thing as you can settle the debt and stop paying interest on the amount.

What Is a Foreclosure? 

Essentially, foreclosures occur when a lender wishes to settle the balance of a loan if the borrower can no longer meet their monthly repayments. In this case, the lender of the loan will force a sale of the property to use the property as collateral and settle the remaining balance of the loan. 

What You Need to Know About Mortgage Accelerations in Hawaii

If you're considering an acceleration on your mortgage loan, you're likely in a good financial space to meet your mortgage repayments, and to understand a mortgage acceleration is relatively straightforward.

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If you're disciplined with your finances and know how to have complete control, you may decide to make your repayments each month or on selected months manually. If, however, you're going to need assistance with keeping to your commitment, you can head over to your bank and request a debit order for an automatic monthly transaction. 

Benefits that you can enjoy with a mortgage acceleration include:

• Saving money in the long run by having reduced interest rates charged to you. 

• Decreasing the time you're going to use to pay off the loan. 

What You Need to Know About Foreclosures in Hawaii

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Foreclosures occur when the borrower, cannot meet the monthly mortgage repayments for personal reasons. Under such circumstances, the borrower needs to be aware that they will be dealing with the servicer who will act as a lender representative to avoid direct participation. 

Once you begin missing payments, the servicer will start notifying you of a possible foreclosure. You need to be aware that Hawaii has a program dedicated to mortgage foreclosure dispute resolutions. This program ensures that both the lender and borrower are protected and aware of their rights during this process. 

Once you miss a payment, you are given a grace period of between 10 to 15 days. Should you not settle the outstanding amount during this time, the servicer will charge a late fee. If you need more information concerning the costs and expenses associated with a late payment, you can view this on your promissory note or billing statement that you receive monthly. 

The servicer will begin telephonic communication no more than 36 days after the missed payment to discuss possible foreclosure alternatives, also known as loss mitigation. No more than 45 days after the missed payment, the servicer will be in contact with you again to stipulate the foreclosure alternatives in writing. During this time, the lender will also send you a breach letter to notify you of your default payments. 

If the borrower does not respond or there's no call to action during this period, the loan will be accelerated, and the foreclosure procedure will begin. Under federal law, this can only occur 120 days after the delayed payment. Once the lender has filed a complaint with the circuit court, approval will be requested to proceed with the foreclosure. Once approved, the lender can publish a notice of sale in the newspaper and a website for some time until the auction date. 

Non-judicial foreclosures allow borrowers to participate in the mortgage foreclosure dispute resolution program in Hawaii. In this way, you can meet with the lender or the representatives to come to some agreement to prevent foreclosure. Should the foreclosure continue, a public auction will occur, and the property will be sold to the highest bidder. 

Something worthy of note is that in Hawaii, you can reinstate the mortgage and prevent foreclosure by meeting all your missed repayments and covering all other added costs and fees. This option is only applicable to non-judicial foreclosures with payment accepted up to three business days before the sale. 

In Conclusion

It is important to know your rights and the laws around mortgage accelerations and foreclosures in Hawaii to ensure that you have the best possible experience when purchasing a property. If you have any further questions please feel free to reach out for further guidance.