A declining trend of fewer real estate foreclosures in Hawaii has snapped after an 18-month run.
Data released by the state Judiciary this week show that the number of lawsuits filed against property owners statewide increased in the past three months compared with the same respective months last year.
Part of the increase was expected because of abnormally low counts of new cases in May and June 2014 that appeared to be triggered by a change in state foreclosure law last year. But numbers also were higher for July.
July’s count was 195 new cases, up from 160 cases in the same month last year. In June there were 164 cases, up from 122, and May’s tally was 187 cases, up from 80.
Marvin Dang, a local foreclosure attorney, said case volume in the last three months appears roughly in line with case volume for most of this year. So in his view, the upticks year-over-year for May, June and July are likely more a result of unusually low volume last year.
"I think that the number of foreclosures we’re experiencing is fairly steady," he said.
The change in state foreclosure law last year was made through Act 37. The act, enacted in May 2014, prohibited attorneys from filing a foreclosure lawsuit without submitting a separate written document in which they affirm that they have communicated with a representative of the lender pursuing foreclosure and have confirmed the accuracy of allegations, supporting affidavits and notarizations.
Though some law firms already had been doing what Act 37 mandated, others had to adjust their procedures and hold off on filing new cases.
A new state law created earlier this year, Act 62, established regulations on mortgage servicers that sometimes handle foreclosures, but it was not expected to have a significant impact on the volume of new foreclosure cases.
For the first seven months of this year, the number of new foreclosure cases remains down from last year. There were 1,194 cases through July, down 7 percent from 1,282 cases in the same period last year.
Hawaii’s economy would suggest that fewer people should be in danger of foreclosure given that personal income is rising, unemployment is falling and home values are appreciating. Still, homeowners can encounter foreclosure for many reasons, including divorce, poor financial management and health problems leading to job loss.
Dang said a recent shake-up in the law business locally could skew foreclosure case volume in the next few months by producing more year-over-year increases. The shake-up involves a large foreclosure law firm, Bellevue, Wash.-based RCO Legal, winding down its Hawaii affiliate office. The move is leading other law firms to take over cases from RCO Hawaii LLLC that had yet to be filed in court, as well as cases that may have to be refiled in some instances.
NO PLACE TO CALL HOME
New Hawaii foreclosure cases filed in state court, including the year-over-year percentage change:
| 2015 |
| MONTH |
TOTAL |
% CHANGE |
| July |
195 |
+22% |
| June |
164 |
+34% |
| May |
187 |
+134% |
| April |
211 |
0% |
| March |
174 |
-25% |
| February |
147 |
-41% |
| January |
116 |
-49% |
