Sell Your House When Behind on Mortgage Payments in Hawaii

If you are behind on your mortgage payments in Hawaii, you still have options — and more time than you may think. Hawaii’s judicial foreclosure process under Hawaii Revised Statutes Chapter 667 is one of the slowest in the country, typically taking 18-36 months or longer from first missed payment to auction. That means you have a meaningful window to sell your home, pay off what you owe, and walk away without a foreclosure on your record. Hawaii Property Buyers can close in as little as 7-14 days — stopping the foreclosure process and letting you move forward.

We Understand What You’re Facing

Falling behind on your mortgage is not a character flaw. It is a financial reality that tens of thousands of Hawaii homeowners have faced — triggered by circumstances that were often beyond their control. A job loss, a medical emergency, a divorce, an adjustable-rate mortgage that reset higher than you could manage, a business that struggled after the pandemic. Life does not always go as planned, and Hawaii’s high cost of living leaves less financial cushion than almost anywhere else in the country.

If you are receiving late notices, collection calls, or formal demand letters from your lender, it is natural to feel a mix of shame, fear, and paralysis. We want you to know: judgment has no place in this conversation. At Hawaii Property Buyers, we have worked with homeowners across O’ahu, Maui, the Big Island, and Kaua’i who were weeks, months, or even years behind on payments. We do not see a failure — we see someone who needs a straightforward path forward, and we are here to provide one.

The most important thing you can do right now is to understand your options and act before the foreclosure process reaches a point of no return. The good news is that in Hawaii, that point is far off — and you likely have more time than you realize.

What Happens When You Miss Mortgage Payments in Hawaii: Month-by-Month Timeline

Most homeowners do not realize how much time elapses between the first missed payment and a completed foreclosure in Hawaii. Here is what actually happens, and what your options are at each stage.

The bottom line: At nearly every stage of this timeline, you can sell your home to a cash buyer and stop the process. The earlier you act, the more equity you preserve and the more options remain open. According to ATTOM Data Solutions, the average foreclosure timeline in Hawaii exceeds 2,000 days — but that does not mean you should wait. Each passing month adds accrued interest, late fees, and attorney costs to the amount you owe.

Hawaii Mortgage Assistance Programs

Before deciding to sell, it is worth understanding what state and federal programs may be available to help you stay in your home — if that is your goal. Here is an honest overview of current options.

Hawaii Homeowner Assistance Fund (HAF)

The Hawaii Homeowner Assistance Fund, administered by the Hawaii Housing Finance and Development Corporation (HHFDC), was a federally funded program that provided mortgage relief to Hawaii homeowners impacted by COVID-19. As of 2026, the HAF program’s federal funding has been largely exhausted and it is no longer accepting new applications in most categories. Check housing.hawaii.gov for any newly funded state programs.

HUD-Approved Housing Counseling

The U.S. Department of Housing and Urban Development (HUD) maintains a network of nonprofit housing counselors who can review your situation, negotiate with your lender on your behalf, and help you understand all available options — at no cost to you. Call 800-569-4287 or visit hud.gov/findacounselor to find a HUD-approved counselor in Hawaii.

Loan Servicer Direct Contact

Federal law (under the Real Estate Settlement Procedures Act, or RESPA) requires your loan servicer to review you for loss mitigation options — including forbearance, loan modification, and repayment plans — before proceeding with foreclosure. Contact your servicer’s loss mitigation department directly and request a written review. Document every communication in writing.

Hawaii Mortgage Foreclosure Mediation

Under HRS 667-25, owner-occupants in a judicial foreclosure action have the right to request mediation through the Hawaii Foreclosure Mediation Program. This brings you, your lender, and a neutral mediator together to explore alternatives — including loan modification, short sale, or deed in lieu. This program is specifically for owner-occupied properties and must be requested within 20 days of being served with the foreclosure complaint.

Your Options: Comparing Every Path Forward

There is no single right answer for every homeowner behind on payments. Here is an honest breakdown of every realistic option — including who each one is right for.

Option 1: Forbearance

What it is: A temporary pause or reduction in monthly mortgage payments, granted by your servicer. Payments are not forgiven — they are deferred and added to the end of your loan or repaid via a repayment plan.
Best for: Homeowners facing a short-term hardship (temporary job loss, medical event) who fully expect to resume normal payments within 3-6 months.
Risk: If your hardship continues, forbearance simply delays foreclosure. You will still owe every skipped payment, plus interest, at the end of the forbearance period.

Option 2: Loan Modification

What it is: A permanent change to your loan terms — typically a reduced interest rate, extended loan term, or addition of missed payments to your principal balance — that results in a lower monthly payment you can afford.
Best for: Homeowners with a stable income who can afford a reduced payment but not their current payment.
Risk: Approval is not guaranteed. The review process can take 30-90 days or longer, and lenders are not required to grant modifications. Some modifications result in negative amortization (your balance grows even as you make payments).

Option 3: Short Sale

What it is: You sell your home for less than what you owe on the mortgage, and your lender agrees in writing to accept the lower payoff amount and release the lien. The lender may or may not waive their right to pursue the remaining balance as a deficiency judgment.
Best for: Homeowners whose property is underwater (worth less than they owe) and who cannot afford to continue making payments.
Risk: Requires lender approval, which takes time. May result in a deficiency judgment unless you negotiate a waiver. Impacts credit less severely than a full foreclosure, but more than a normal sale.

Option 4: Sell to a Cash Buyer

What it is: You sell your home to a cash investor like Hawaii Property Buyers at a fair market price. The proceeds pay off your mortgage in full at closing. No listing, no showings, no repairs. Close in 7-14 days.
Best for: Homeowners who have equity in their property (or enough to cover the mortgage payoff) and want a clean, fast resolution.
Risk: You will likely receive somewhat less than peak retail market value, since you are trading speed and certainty for price. However, when you subtract realtor commissions (5-6%), closing costs, repair costs, and months of carrying costs from a traditional sale, the net proceeds are often comparable — sometimes better.

Option 5: Deed in Lieu of Foreclosure

What it is: You voluntarily transfer ownership of your property to the lender in exchange for being released from your mortgage obligation, avoiding a formal foreclosure.
Best for: Homeowners with no equity, no other options, and a lender willing to accept it (not all will).
Risk: Still damages your credit significantly (though less than a full foreclosure). Lender must agree. May still result in a deficiency judgment if not negotiated properly. You must vacate the property.

Option 6: Bankruptcy (Chapter 7 or Chapter 13)

What it is: Chapter 13 bankruptcy can allow you to restructure your missed mortgage payments into a 3-5 year repayment plan and keep your home. Chapter 7 discharges unsecured debt but does not stop foreclosure long-term.
Best for: Homeowners with significant unsecured debt AND a stable income who can afford to repay arrears over time. Should only be pursued with the advice of a licensed bankruptcy attorney.
Risk: Bankruptcy is a major credit event. Chapter 13 requires 3-5 years of court-supervised payments. If you miss a payment in the plan, the automatic stay lifts and foreclosure resumes.

Side-by-Side Comparison of All Options

Underwater Mortgages in Hawaii — When You Owe More Than It’s Worth

An “underwater” or “upside-down” mortgage is one where the outstanding loan balance exceeds the current market value of the property. While Hawaii’s housing market has been remarkably resilient — with median single-family home prices on O’ahu exceeding $1 million as of 2025 according to the Honolulu Board of REALTORS — underwater situations do occur, particularly among homeowners who purchased at peak prices with minimal down payments or who took out second mortgages or home equity lines of credit.

How Underwater Mortgages Happen in Hawaii

• Purchased at a market peak with a small down payment
• Took out a home equity loan or HELOC that added to the total debt
• Property values declined in a specific micro-market or due to property-specific issues (lava zone, flood zone, storm damage)
• Accrued interest, late fees, and attorney costs during a long delinquency have inflated the total payoff beyond the property’s value

Your Options When You’re Underwater

If you owe more than your property is worth, a standard cash sale will not cover your mortgage payoff — which means the standard process of “sell and pay off the lender” does not apply cleanly. Your realistic options are:

1. Short Sale: We work with you and your lender to negotiate a sale price and a reduced payoff. The lender takes a loss on the difference. This requires lender approval but avoids foreclosure and is far less damaging to your credit.
2. Loan Modification: If your hardship is resolvable and you want to keep the home, your lender may modify your terms to reduce your payment to an affordable level.
3. Deed in Lieu: Transfer the property to the lender voluntarily in exchange for release of the mortgage obligation.
4. Wait for Equity: If the gap between what you owe and what the property is worth is small, and you can resume payments (via forbearance or modification), Hawaii’s historically appreciating market may restore equity over time.

Contact us at (808) 940-3430 to discuss your specific numbers. We will be honest with you about whether a cash purchase or a short sale is the right path, and we will not pressure you toward any outcome that does not serve your best interests.

Hawaii Foreclosure Law: HRS 667 and How Long You Have

Understanding Hawaii’s foreclosure statutes is not just legal trivia — it is practical information that determines exactly how much time you have to act. Under Hawaii Revised Statutes Chapter 667, Hawaii is a judicial foreclosure state for the vast majority of residential mortgages. This means your lender cannot simply send a notice and sell your property — they must file a lawsuit, go through the court system, and get judicial approval before an auction can occur.

The Judicial Foreclosure Process (HRS 667, Part I)

This is the standard path for most Hawaii residential mortgages. Key steps include:

• Lender files a complaint in Circuit Court naming you and any other lien holders as defendants
• You are served with a summons and have 20 days to file a written response
• For owner-occupants, mandatory mediation must be offered under HRS 667-25 before the case can proceed
• If mediation fails or is waived, the case proceeds through discovery and motions — this phase routinely takes 12-24 months in Hawaii’s backed-up circuit courts
• The lender files a motion for summary judgment, which the court must grant before a sale can be ordered
• The court appoints a commissioner to conduct the sale and sets an auction date
• The auction is publicly noticed for three consecutive weeks before it occurs

From first missed payment to completed auction, the average Hawaii judicial foreclosure takes over 2,000 days (ATTOM Data, 2025). That is approximately 5-6 years. While you should not use this timeline as an excuse to delay, it does mean you almost certainly have time to pursue a sale before things become irreversible. For a deeper dive, read our complete guide to selling a house in foreclosure in Hawaii.

Non-Judicial Foreclosure (HRS 667, Part II)

A small subset of Hawaii mortgages include a “power of sale” clause that allows non-judicial foreclosure under HRS 667-5 through 667-10. This process is faster but still requires public notice and a 60-day waiting period. If you receive a notice of a non-judicial foreclosure proceeding, act immediately — you have less time than in a judicial case. Our pre-foreclosure guide covers early-stage options in detail.

Deficiency Judgments in Hawaii — What They Are and How to Avoid Them

A deficiency judgment is a court order requiring you to pay the difference between your outstanding mortgage balance and the amount the lender recovers at the foreclosure auction. In Hawaii, deficiency judgments are expressly allowed under HRS 667-38, which permits lenders to seek a personal judgment against the borrower for any deficiency following a judicial foreclosure sale.

Example: You owe $650,000 on your mortgage. Your property sells at auction for $520,000. Your lender can sue you personally for the $130,000 deficiency — and obtain a judgment that affects your wages, bank accounts, and other assets.

How to Avoid a Deficiency Judgment

• Sell before the auction: If the sale proceeds cover your full mortgage payoff, there is no deficiency and no judgment. This is the cleanest outcome.
• Negotiate a short sale with deficiency waiver: When negotiating a short sale, specifically require your lender to sign a written waiver of their right to pursue any deficiency. Get this in writing before you close.
• Negotiate a deed in lieu with deficiency waiver: Same principle — any voluntary transfer of the property should include a written release of deficiency liability.
• Consult a bankruptcy attorney: A Chapter 7 discharge can eliminate deficiency judgment liability, though it comes with its own significant credit consequences.

We strongly recommend consulting with a licensed Hawaii real estate attorney before completing any transaction where a deficiency is possible. The Hawaii State Bar Association’s lawyer referral service can connect you with a qualified attorney.

How Hawaii Property Buyers Helps Homeowners Behind on Payments

Our process is designed to be as simple and stress-free as possible — especially for homeowners who are already dealing with the pressure of financial hardship. Here is exactly how it works for someone in your situation.

Step 1: Contact Us (5 Minutes)

Call us at (808) 940-3430 or submit your property information through our online form. Tell us your situation honestly — how many payments you have missed, whether a foreclosure has been filed, and what you owe on the property. Everything you share is completely confidential. There is no judgment and no obligation.

Step 2: We Review Your Property and Your Numbers (Same Day)

We will pull public records on your property, research recent comparable sales in your area, and assess your current mortgage payoff amount. We look at the full picture: what you owe, what the property is worth, and what a realistic cash offer looks like. For underwater properties, we will have an honest conversation about whether a short sale is a better fit.

Step 3: You Receive a No-Obligation Cash Offer (Within 24 Hours)

We present you with a written cash offer — no pressure, no expiration countdown, no high-pressure tactics. We explain exactly how we arrived at the number. You ask whatever questions you want. You take whatever time you need to decide. There is zero cost to receive the offer.

Step 4: You Accept and We Open Escrow (Your Choice of Closing Date)

Once you accept, we open escrow with a reputable Hawaii title company and begin the closing process immediately. We order the title search, coordinate with your lender’s payoff department, and handle all the paperwork. You do not need to clean the house, make repairs, or do anything except sign the closing documents.

Step 5: We Close and Your Mortgage Is Paid in Full (7-14 Days)

At closing, the title company distributes the sale proceeds: your lender receives the full payoff amount (stopping the foreclosure), any other lien holders are paid, closing costs are covered, and any remaining equity goes to you. The foreclosure process ends. You walk away free and clear.

For homeowners who need extra breathing room before vacating, we can often offer a flexible move-out timeline — just let us know your situation and we will work with you.

When Selling Makes More Sense Than Trying to Keep the Home

We are not here to convince every homeowner to sell. Forbearance and loan modification are genuinely the right answer for some people. But for many homeowners behind on payments in Hawaii, selling — whether to us or through another channel — is the financially and emotionally superior outcome. Here are the situations where selling typically makes more sense than fighting to keep the property.

Your Hardship Is Not Temporary

If you lost a job and don’t have strong prospects for comparable employment, your income has permanently decreased, or you are dealing with ongoing medical expenses, the underlying problem that caused the missed payments will still exist after a forbearance period ends. In these cases, a modification that reduces your payment may help — but only if the new payment is genuinely sustainable. If it isn’t, you are simply delaying an inevitable sale.

The Numbers No Longer Work

Hawaii’s high cost of living means carrying costs for an owned home are steep: mortgage, property taxes (typically 0.28-0.35% of assessed value annually under HRS Chapter 246), homeowners insurance, and maintenance. If your monthly housing cost significantly exceeds what you would pay to rent a comparable space in Hawaii, the financial math may favor selling — even if the sale price is lower than you hoped.

The Emotional Toll Is Taking a Real Cost

Chronic financial stress has documented health consequences. The anxiety of waiting for court notices, dreading the phone, and living with uncertainty is not a neutral cost. For many homeowners, selling and moving forward — even at a lower price — restores a quality of life that has real value. There is no shame in choosing peace of mind.

You Have Equity Worth Protecting

If you have meaningful equity in your home — and given Hawaii’s sustained appreciation, many homeowners do — every month you delay is a month that accrued interest, late fees, and attorney costs erode that equity. Selling now, even in a distressed situation, may be the difference between walking away with $50,000 and walking away with nothing (or worse, owing a deficiency).

You Are Planning to Leave Hawaii Anyway

Whether it is military PCS orders, retirement, the high cost of living, or family circumstances pulling you to the mainland, if your long-term plan doesn’t include staying in Hawaii, a fast cash sale may align perfectly with your actual goals — letting you leave on your own terms rather than the bank’s.

Frequently Asked Questions: Selling Your House Behind on Payments in Hawaii

About the Author

Written by Robert Koncal, owner and operator of Hawaii Property Buyers LLC. Robert has been purchasing residential properties across the Hawaiian Islands since 2021, helping homeowners in a wide range of challenging situations — including foreclosure, probate, divorce, and financial hardship — sell quickly, fairly, and stress-free. Based in Honolulu, Robert brings firsthand knowledge of Hawaii’s unique real estate market, local laws, and island communities to every transaction.

Hawaii Property Buyers LLC • 2032 S Beretania St, Honolulu, HI 96826 • (808) 940-3430 • hawaiipropertybuyer@gmail.com