Hawaii foreclosure data show mixed bag

Changes to state law in each of the last two years reduced the volume of foreclosure cases filed against Hawaii homeowners, but recent data on new case filings also has been depressed due to an accounting lag.

Monthly counts of new foreclosure cases reported by the state Judiciary this year have been revised upward several times, meaning Hawaii’s lingering foreclosure problem is worse than previously indicated this year.

Relatively big revisions were made in March and April after relatively small changes in January and February.

Prior to the adjustments, the data suggested that fewer foreclosure cases were initiated by lenders in March and April compared with the same months last year.

But really, no easing occurred. The number of new cases was revised higher by 24 percent in March and April — to 450 from 362 in March and to 397 from 321 in April. And those figures could still be revised a bit higher in the coming months.

Judiciary officials say difficulty in compiling data on new cases, largely on Hawaii island and Kauai, has made more timely accounting of case volume problematic.

The Judiciary typically reports case volume for one month toward the end of the next month.

Data for May was reported Thursday and shows 327 new foreclosure cases that represent an 18 percent decrease compared with 397 cases in the same month last year. But last month’s count likely will be revised higher.

Judiciary officials began reporting case volume after the Legislature amended state foreclosure law in ways that led lenders to file all cases in court. Previously, the vast majority of cases was handled outside of court in a nonjudicial process.

The changes to the law two years ago forced lenders to halt all pending cases and start them over in a new process that was largely aimed at letting homeowners enlist mediators to try to resolve nonjudicial cases. But lenders balked at the new process and began filing all foreclosures in court.

Another change in the law last June added new requirements that lender representatives say again slowed the pace of foreclosure filings, though they began rebounding late last year and generally have continued to rise month over month.

Proponents of the law overhauls say the changes dissuaded lenders from foreclosing and helped many people avoid foreclosure through loan modifications or giving up their homes outside of foreclosure.

But a side effect also has caused foreclosure case volume to linger at a relatively high level even though unemployment and bankruptcies have fallen as the local real estate market and economy strengthen.