Honolulu improved its foreclosure rate ranking among major U.S. metropolitan areas in the first quarter, in part due to constraints state lawmakers imposed last May for how foreclosure cases may be initiated in Hawaii.
Real estate research firm RealtyTrac said the rate of foreclosure cases in Honolulu, or Oahu, was 64th lowest out of 212 metro areas with populations of at least 200,000.
That means 147 other metro areas had worse foreclosure rates.
In the first quarter of 2011, Honolulu was 13 places lower with the 77th best rate, based on 1,025 foreclosure cases that equated to one case for every 330 households.
Honolulu’s rate in the recent quarter was one foreclosure for every 490 households based on 687 total cases.
Bracketing Honolulu in the recent quarter was Corpus Christi, Texas, with a rate of one case per 497 households, and an area that includes Hartford, Conn., with one case per 486 households.
The best rate was in Utica-Rome, N.Y., with one case per 10,582 households. The worst rate was Stockton, Calif., with one case per 60 households. The average among the 212 metro areas was one case per 230 households.
RealtyTrac said foreclosure activity for the January-to-March period was down from the same period last year in 135 out of the 212 metro areas. Some of the decrease is attributed to improving real estate and job markets, though some also is attributed to lenders and laws holding back foreclosure actions against delinquent borrowers.
Hawaii overhauled a law in May to force lenders to give borrowers the option to have a mediator help avert foreclosure in cases filed out of court. But lenders balked at the new process, and quit initiating out-of-court, or nonjudicial, foreclosure cases that represented the vast majority of foreclosures before the law took effect.
Instead, lenders are filing all cases in court, but at significantly reduced levels compared with foreclosure volume before the law’s change. Generally, court foreclosures take more time and money compared with nonjudicial foreclosures.
State lawmakers are contemplating changes to the law based on recommendations by an industry task force, and are expected to settle on changes later this week.
