Hawaii is categorized as which type of state in regard to mortgages?

Hawaii is classified as a lien theory state when it comes to mortgages. In lien theory states, a mortgage is considered a lien on the property rather than a transfer of title. This means that when a borrower takes out a mortgage, they retain full ownership and control of the property while the lender holds a security interest in the property through a lien. If the borrower defaults on the loan, the lender must go through the foreclosure process to obtain the property, but until that point, the borrower retains the rights associated with ownership.

In the context of Hawaii, this categorization is significant for understanding how mortgages are structured and enforced within the state. Borrowers in lien theory states typically have more rights regarding the property compared to title theory states, where the lender holds the title until the mortgage is paid in full.