Foreclosure is the legal process effected through the court system in which a mortgagee (lender—often a bank) terminates a mortgagor’s (borrower’s) interest in the real property in which the mortgagor gave the mortgagee a security interest (a lien) as collateral for the loan used to purchase the property.

Foreclosure generally occurs when a homeowner defaults and fails to make mortgage payments as required by the loan agreement (promissory note).

Foreclosure allows the lender to seize the property, remove the homeowner, and sell the home—all of which are legal remedies the mortgagor and mortgagee agreed to in the mortgage contract.

In Hawaii, foreclosure is a legal process that allows a lender to terminate a borrower's interest in a property due to the borrower's failure to make the required mortgage payments as stipulated in the loan agreement. Hawaii recognizes both judicial and non-judicial foreclosure processes. Judicial foreclosure involves the court system and is required when there is no power of sale clause in the mortgage agreement. The lender must file a lawsuit and obtain a court order to foreclose on the property. Non-judicial foreclosure, on the other hand, can be used when the mortgage agreement contains a power of sale clause, allowing the lender to sell the property without court intervention after following specific notice and publication requirements. The foreclosure process in Hawaii is regulated by state statutes, which outline the procedures and borrower protections, such as the right to reinstate the loan before the sale and the possibility of a deficiency judgment against the borrower if the sale proceeds do not cover the outstanding loan balance.