Foreclosure actions against Hawaii homeowners hit an eight-month high in January as lenders began to rebuild the number of filings knocked down by a new state law enacted in May.

A report released Wednesday by real estate research firm RealtyTrac said the number of foreclosure actions statewide totaled 652 last month, the most for any month since the law, Act 48, took effect.

Act 48 reformed rules for nonjudicial, or out-of-court, foreclosures — which used to be how lenders handled the vast majority of Hawaii foreclosures because it was quicker and cheaper than going through court.

A key provision of the new law gave qualified home owner-occupants the option of having a mediator assist with foreclosure mitigation in front of a lender representative before a foreclosure sale could proceed.

Mediation was supposed to curb what consumer advocates said were lender abuses, while allowing foreclosures to proceed in cases where homeowners had no realistic prospect of maintaining their mortgage.

But lenders objected to a provision that could render a nonjudicial foreclosure sale void if they violated even the most trivial part of the law. So they turned to filing all foreclosures in court and left the mediation process untested.

As of December, all foreclosure filings by lenders since the new law took effect were in court.

While the foreclosure count for January was the highest since June, it was still 34 percent below the 985 cases filed in January 2011, suggesting that the new law is still having a dampening effect and providing relief to troubled borrowers.

Of the 652 total filings last month, 149 reflected home repossessions by lenders. Only 16 filings were foreclosure sale notices announcing a public auction of a home.

By county, Honolulu had the most foreclosure filings at 287 but the best rate at 1 per 1,174 households. Hawaii island had the next highest total at 199 and the worst rate of 1 filing per 414 households.

On Maui, there were 126 filings or 1 per 559 households. And Kauai had 40 filings, or 1 per 745 households.

The total number of foreclosure filings in Hawaii last month gave the state the 18th highest rate among states, or 1 filing for every 797 households. Nevada had the worst rate with 1 filing for every 198 households. North Dakota had the best rate with 1 filing for every 63,500 households.

The national rate was worse than Hawaii’s, at 1 filing for every 624 households. Nationwide, foreclosure filing volume was down 19 percent last month compared with the same month last year.

RealtyTrac said foreclosures likely will rebound in the coming months on the heels of a settlement reached last week between 49 state attorneys general and five of the nation’s largest lenders concerning improper foreclosure case documentation and other missteps lenders made to rush cases.

"We continue to see signs on a local and regional level that the frozen-up foreclosure process is beginning to thaw," Brandon Moore, RealtyTrac CEO, said in a statement. "The settlement sets forth clear guidelines for lenders and (loan) servicers to follow when foreclosing, which should allow them to push through some of the delayed foreclosures from last year."

But Moore also noted that lawsuits and state laws in some parts of the country will continue to constrain foreclosure volume.

"Other roadblocks to foreclosure are still in place at the state level, however, including legislation altering the foreclosure process and lawsuits against lenders," he said. "We expect to see somewhat uneven trends in local and regional foreclosure numbers going forward as lenders work through these additional legislative and legal roadblocks."

Hawaii Attorney General David M. Louie said last week that he expects the $25 billion settlement will help many local homeowners avoid or get out of foreclosure trouble.

The settlement will provide an estimated $71 million to the state, of which about $50 million will be available to finance loan modifications for borrowers. Another $9.3 million will allow borrowers to refinance loans, and $8.2 million will provide benefit programs for Hawaii homeowners including mediation and credit counseling.

"The fact that we can get refinancing going, that we can get reductions going, that we can put an end (to) or at least slow down and reduce in large part the number of new foreclosures that are happening, that helps the general housing market," Louie said last week.

Foreclosure actions against Hawaii homeowners hit an eight-month high in January. An earlier version of this story said it was a six-month high.