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Foreclosures march toward levels seen before law’s overhaul

November’s volume of cases and delinquent-mortgage reports show this summer’s reduction was temporary

By Andrew Gomes

POSTED:



A recent resurgence in new Hawaii foreclosure cases strengthened in November after an initial surge in October attributed to more lawyers and mortgage lenders adjusting to state foreclosure law amendments enacted in June.

Requirements in the revised law appeared to constrain new foreclosure lawsuits statewide to about 60 or 70 in each of the first three months after enactment. Then the volume roughly tripled to 196 in October and rose again to 313 last month, according to state Judiciary data published this week.

November’s count came close to — but still remains less than — the number of foreclosure cases started during most of the 12 months preceeding the law’s overhaul. In November 2011 there were 395 new cases.

Before the new law took effect June 29 as Act 182, some Hawaii foreclosure attorneys predicted a substantial decline and rebound would occur.

Because of recent changes in the foreclosure law, it’s difficult to tell whether improvements in the local economy and housing market are helping reduce Hawaii’s foreclosure rate.

The number of new foreclosure cases had generally been rising during the 12 months through June when Act 182 imposed changes that include a requirement that attorneys affirm the accuracy of all documents submitted by lenders in a case.

There are some indications that the number of homeowners with problems paying their mortgages has yet to recede.

National organizations operating foreclosure-response.org released a report Thursday that said 5.3 percent of home mortgages in Hono­lulu — Hawaii’s biggest housing market — were seriously delinquent in September, up from 4.3 percent in September 2011.

Seriously delinquent is defined as home loans in foreclosure and loans more than 90 days delinquent but not yet in foreclosure, according to the website operated by the Center for Housing Policy, the Local Initiatives Support Corp. and the Urban Institute.

In a separate report, real estate analytics firm CoreLogic Inc. put Hono­lulu’s rate of foreclosures and seriously delinquent mortgages at 7.3 percent in September, up from 6.6 percent a year earlier. CoreLogic’s calculation includes the same criteria as foreclosure-response.org plus homes repossessed and owned by lenders.

For October, CoreLogic said Hono­lulu’s rate of foreclosures and seriously delinquent mortgages was
7.1 percent, up from 6.8 percent in the same month last year.

CoreLogic also calculated a statewide rate of 10.3 percent in October, which was down slightly from 10.4 percent a year earlier.

Some critics of Hawaii’s overhauled foreclosure law believe the changes have largely delayed — not resolved — foreclosures and have delayed a recovery.

Supporters of the law believe the overhauls have spared homeowners from unfair lender practices and helped many people avoid foreclosure, in effect keeping foreclosures from being higher than they are.






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ala_akamai wrote:
Uh oh. This could signal challenging times ahead for our local economy.
on December 26,2012 | 11:38AM
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