Mortgage lenders — who stopped conducting out-of-court home foreclosures in Hawaii last May because of a controversial new law — still have a significant inventory of repossessed homes to sell, according to a new report.
Real estate research firm RealtyTrac said lenders sold 369 Hawaii homes in last year’s third quarter from July to September, up 63 percent from 226 sales in the same quarter in 2010.
The 369 single-family home and condominium sales represented 6.7 percent of all home sales in the quarter, and sold for an average price of $313,229, RealtyTrac said in the report released Wednesday.
A reduction in sales of homes repossessed by lenders is expected either in the fourth-quarter report or perhaps this year’s first quarter based on an average time of about six months it takes lenders to resell a home after repossession, according to Daren Blomquist, a RealtyTrac vice president.
Hawaii lawmakers created a new law last year that dramatically reduced the number of foreclosures being conducted out of court, which had been the way the vast majority of foreclosure cases were handled recently. As a result, lenders have gradually been filing more foreclosures in court where cases typically take longer to conclude.
RealtyTrac also reported the number of homes in foreclosure that were sold by troubled borrowers with consent of lenders prior to an auction. There were 117 of these so-called short sales in the third quarter, up 31 percent from 89 in the year-earlier third quarter.
The 117 short sales represented 2.1 percent of all home sales in the quarter, and sold for an average price of $435,036.
Combining short sales and lender sales, there were 486 pre- and post-foreclosure sales of Hawaii homes in the third quarter, up 23 percent from a year earlier and representing 8.8 percent of all home sales.
The share of home sales in Hawaii connected to foreclosure tied for 11th lowest among 40 states. RealtyTrac didn’t have sufficient data for 10 states. The average among the 40 states was 20.4 percent. Hawaii tied with North Carolina at 8.8 percent. Nebraska had the lowest figure at 4.2 percent.
The highest figure was 57 percent in Nevada.
