The six-bedroom house of Edith Mar was auctioned yesterday in front of Circuit Court, with the high bidder offering $290,000 - or roughly half the assessed value of the property.
Several dozen Mar supporters attended the auction, many of them contesting the validity of the foreclosure. They claimed the lenders weren't authorized to foreclose on the property because title never was properly granted to Mar in the first place - which her title insurer disputes.
"Somebody buying this property is getting nothing but pilikia (trouble)," Irma Sai told Al Fujisawa, the court-appointed foreclosure commissioner, shortly before the bidding started.
"That's their problem," Fujisawa responded, noting that documents filed by Mar and Perfect Title Co. in the Bureau of Conveyances could affect title to the property.
An elderly women who wouldn't give her name to a reporter was the high bidder. She said she was buying the home partly because it had fewer steps than her existing residence, which would make walking around easier.
The sale still must be confirmed by the court. A hearing likely will be in about a month.
If the court confirms the sale, the new owner would decide when an eviction, if necessary, would be, Fujisawa said.
Mar is one of a handful of people who have refused to pay their mortgages because of title searches by Perfect Title, which uses Hawaiian Kingdom law to trace property ownership to the 1800s.
The company invariably finds that existing titles are defective, though the industry generally dismisses the findings as absurd.
In Mar's case, Perfect Title determined the ownership chain was broken because the land was probated in 1894 by what the company called an illegal court following the overthrow of the Hawaiian monarchy. Subsequent ownership transfers, including Mar's, were thus invalid, the company said.
After Perfect Title reached that conclusion, Mar stopped paying her mortgage and insisted that her title insurer, Chicago Title, pay it because she said she never got true ownership.
But Chicago Title has scoffed at Perfect Title's contention that all government entities since the overthrow are invalid. It also said Mar still is responsible for paying the mortgage because no one else is claiming to own the property, therefore she hasn't suffered any damage to trigger the title policy.
Mar's case is the first to go this far in the foreclosure process, and thus has become a rallying point for Perfect Title supporters and detractors.
Mar didn't attend yesterday's auction and couldn't be reached for comment.
But many others there were quick to pan the process.
"This is all superficial," said George Featheran, a Kailua resident who likewise has stopped paying his mortgage based on a Perfect Title report.
Featheran said he didn't think Mar would lose her home because Perfect Title's report cannot be disproved - a theme repeated again and again by company supporters. The court, however, hasn't addressed that issue because Mar never officially raised it, saying she doesn't recognize the authority of the state's judicial system.
As yesterday's auction wrapped up, one man, alluding to the problems that may come with the property, turned to the high bidder and remarked, "Hope you enjoy your (can) of worms."