The Hawaii Supreme Court ruled on August 24, 2026, that UMB Bank, N.A. did not have the standing to foreclose on a mortgage held by homeowners Sa and Gladys Ulu Tupulua. This decision came after the court found that the necessary evidence to prove UMB's standing was inadequate, which could have significant implications for mortgage lenders and borrowers in Hawaii.
The case, UMB Bank, N.A. v. Tupulua, SCWC-24-0000333, arose from a dispute over a mortgage on property in Waiʻanae. The Tupuluas were facing foreclosure after Wells Fargo Bank, N.A. initially filed a lawsuit against them. UMB Bank was later substituted as the plaintiff after Wells Fargo assigned the mortgage to UMB. The court's decision primarily focused on whether UMB could prove it had the right to foreclose based on the possession of the original promissory note.
Initially, Wells Fargo filed a complaint in January 2015 seeking to foreclose on the Tupuluas' mortgage. The case saw multiple motions for summary judgment, with UMB asserting that Wells Fargo possessed the original promissory note when the complaint was filed. The Circuit Court of the First Circuit ruled in favor of UMB, stating that it had established standing to foreclose. However, the Tupuluas contested this ruling, leading to an appeal.
The Intermediate Court of Appeals upheld the circuit court's decision, stating that the stipulation between the parties indicated Wells Fargo had possession of the note. However, the Hawaii Supreme Court disagreed with the ICA's assessment. The court found that there were unresolved issues regarding whether Wells Fargo had possession of the note at the time the foreclosure complaint was filed. Chief Justice Vladimir P. Devens, along with Justices Sabrina S. McKenna, Todd W. Eddins, Lisa M. Ginoza, and Circuit Judge Lisa W. Cataldo, concluded that the stipulation did not adequately establish UMB's standing.
In its opinion, the court stated, "There is a genuine issue of material fact with respect to Wells Fargo’s possession of the Note." The court emphasized that the stipulation did not specify the timeframe of possession before the lawsuit was initiated, leaving ambiguity about whether Wells Fargo had the note when it filed the complaint. The court noted that the evidence presented by UMB was insufficient to prove continuous possession of the note, which is crucial for establishing standing in foreclosure cases.
The ruling has significant implications for both homeowners and mortgage lenders in Hawaii. It underscores the importance of clear documentation and evidence in foreclosure proceedings. Lenders must ensure they can demonstrate their standing to foreclose, particularly regarding the possession of promissory notes. For homeowners, this decision could provide a precedent for challenging foreclosure actions if lenders cannot adequately prove their standing.
Moving forward, the case has been remanded to the circuit court for further proceedings consistent with the Supreme Court's opinion. This means the parties will have another opportunity to address the standing issue and present additional evidence regarding the possession of the note at the time the complaint was filed. The outcome of this case could influence future mortgage foreclosure cases in Hawaii, highlighting the need for lenders to maintain thorough and accurate records.
Details were not available in the court filing regarding whether UMB Bank plans to appeal the decision or if there are any related cases pending. However, the ruling emphasizes the critical nature of standing in mortgage foreclosure cases and the potential for homeowners to contest such actions based on the lender's ability to prove its right to foreclose.