We disagree. At the time of this suit, Hawaiʻi, like many states in this circuit, had both judicial and nonjudicial foreclosure regimes. Hawaiʻi law authorized lenders like Chase to bring an action in Hawaiʻi state court to foreclose on the property in the event of a default. See Haw. Rev. Stat. § 667-1.5. Borrowers like the Rundgrens could then raise defenses to the judicial foreclosure proceeding. See id. § 667-4. But Hawaii law also permitted a borrower and lender to agree that the lender could exercise a power of sale should the borrower default. Haw. Rev. Stat. §§ 667-5(a), 667-5.7 (2008 ed.); Lee v. HSBC Bank USA, 121 Hawaiʻi 287, 291, 218 P.3d 775 (2009). When the parties have agreed to use these nonjudicial foreclosure proceedings and the borrower defaults, the lender is contractually and statutorily authorized to commence a public sale of the property without the need to resort to the judicial process. See Haw. Rev. Stat. § 667-5 (2008 ed.). A nonjudicial foreclosure is intended to be “‘relatively quick and inexpensive. It does not require a lengthy time period between the notice of default and foreclosure sale, and does not require court costs and legal fees associated with discovery and drafting of pleadings.'” Lee, 121 Hawaiʻi at 292 (quoting Georgina W. Kwan, Mortgagor Protection Laws: A Proposal for Mortgage Foreclosure Reform in Hawaiʻi, 24 U. Haw. L. Rev. 245, 253 (2001)). In order to halt a nonjudicial foreclosure, the borrower may “impeach by action or otherwise, any foreclosure proceeding” by bringing action “prior to the entry of a new certificate of title.” Haw. Rev. Stat. § 501-118; see also Aames Funding Corp. v. Mores, 107 Hawaiʻi 95, 101, 110 P.3d 1042 (2005). In other words, if the loan documents give the lender the power to proceed by means of nonjudicial foreclosure, a borrower who wants to stop the process may bring an independent action raising claims that provide a legal basis for enjoining the lender from exercising its rights under the contract.
Rundgren v. Wash. Mut. Bank, FA, 760 F.3d 1056, 1062 (9th Cir. 2014).