Foreclosure volume remains low following law change

The number of new foreclosure lawsuits filed in Hawaii through November stayed under 200 for a seventh straight month in the wake of a tweak to state law that took effect in May.

Preliminary statistics released recently by the state Judiciary show there were 169 new cases filed statewide in November, up a bit from 156 in October but below 188 in September that marked a high point for any month last year after case volume plummeted to 80 in May.

Prior to May the number of new cases ranged from 211 to 250 per month last year.

In May the Legislature required that more information be included with the filing of foreclosure lawsuits to better protect homeowners from "unwarranted" actions that lawmakers previously sought to address in 2012 with another change to state law.

The 2012 change required attorneys to affirm in writing that they communicated with a representative of the lender pursuing foreclosure and specify with whom they communicated and on what date. Attorneys also had to confirm the accuracy of allegations along with any supporting affidavits and notarizations.

The 2012 amendment, however, didn’t say when such affirmations had to be filed. As a result, many attorneys were filing the affirmations near the end of the foreclosure process.

Some lawmakers were concerned about that timing, so they passed a bill early last year prohibiting new foreclosure cases from being filed without attorney affirmations. The law took effect April 23 and triggered a drop in new cases that rebounded somewhat but not to the same levels in the months leading up to May.

Some local foreclosure attorneys previously said that the new rule wouldn’t affect whether lenders pursue foreclosure, and that the only change would be a temporary slowdown in filing cases until lenders and attorneys adjusted to the new rule.

It may still be too early to say whether all adjustments have been made and a slowdown has passed, especially because the Judiciary sometimes revises foreclosure case counts upward a month or so after preliminary data is reported.

However, it is possible that with strengthening real estate values, continued low interest rates and the improving job market that foreclosure case volumes have leveled off at a relatively low level statewide.

Case volume had been close to or above 400 in some months during 2011, 2012 and 2013.