Isle foreclosures fell in September, October

Real estate foreclosures in Hawaii retook a downward path toward the end of 2015 after four months of consecutive increases.

The most recent data from the state Judiciary showed that the number of foreclosure lawsuits filed against property owners statewide fell in September and October compared with the same months the previous year, which reversed year-over-year increases from May to August.

September’s foreclosure count plummeted 53 percent to 89 new cases from 188 cases filed in the same month in 2014. In October there were 121 cases, down 22 percent from 156 a year earlier.

The drops put Hawaii foreclosures back on track to post a second consecutive annual decrease in the number of homeowners caught up in legal action by lenders seeking to repossess their homes.

Fewer foreclosure cases in 2015 are in line with broader economic trends in Hawaii that include rising personal income, appreciating home values, low unemployment and fewer bankruptcies.

Last year through October, there were 1,557 foreclosure lawsuits filed, down 11 percent from 1,757 in the same 10 months in 2014. For all of 2014, there were 2,084 cases, which represented a 39 percent drop from 3,430 cases in 2013.

The number of cases in 2013 was a peak, yet represented only the second full year under a dramatic revision to Hawaii foreclosure law that was implemented in mid-2011 and required lenders to file all foreclosure cases in state Circuit Court.

Before the change, lenders conducted nearly all foreclosures in Hawaii through a nonjudicial process that consumer advocates said was being abused by lenders. The switch, to some extent, lengthened the time it took for a pile of troubled mortgages to be resolved, given that many foreclosures had to be restarted in court and created a backlog. State lawmakers also tweaked Hawaii’s foreclosure law in 2012 and 2014, imposing additional requirements on lenders that altered the flow of cases.

Some of the year-over-year case volume increases from May to August appeared connected to the altered flow following the most recent tweak to the law that significantly reduced the number of new cases for a few months after the law’s amendment took effect in May 2014.

FALLING FORCLOSURES

New Hawaii foreclosure cases filed in state court, including the year-over-year percentage change:

Source: State Judiciary