Isle foreclosure cases crept up in December

The number of new foreclosure lawsuits filed against Hawaii property owners stayed above 300 for a second consecutive month in December, as lenders continue to file more cases since state foreclosure law was overhauled in June.

The state Judiciary reported there were 341 new foreclosure cases filed statewide last month.

That figure is up from 327 in November, 196 in October and close to 60 or 70 in July, August and September.

During the first six months of last year — before sweeping changes to Hawaii foreclosure law took effect — the number of new cases ranged from 285 to 458 per month.

Despite the recent increases, foreclosure case volume since July has yet to top the volume in the same month for the previous year. But the margin is narrowing.

The 341 cases in December was 9 percent lower than the 375 cases in December 2011 before the law was changed. The year-over-year margin was 17 percent in November, 46 percent in October and between 60 percent and 80 percent in July, August and September.

Some local foreclosure attorneys predicted that new foreclosure rules would produce a drop in cases followed by a rebound as lenders and attorneys established a process to satisfy a new provision requiring that attorneys affirm the accuracy of all case documents lenders submitted.

Still, it’s difficult to tell what effect the new rules are having on homeowners struggling with delinquent mortgages.

Supporters of last year’s amendment to the foreclosure law, Act 182, believe the overhaul has spared homeowners from unfair lender practices and helped many people avoid foreclosure, in effect keeping foreclosures from being higher than they are.

Critics believe Act 182 has delayed resolution of troubled mortgages and added to the inventory of homes caught in foreclosure even as home values and the economy are improving.

Act 182 was the second time in two years the foreclosure law was overhauled. The earlier change, known as Act 48, took effect in May 2011 and led lenders to abandon an out-of-court process they were using for the vast majority of foreclosures. All pending out-of-court cases at the time were suspended, and it’s unclear how many cases were restarted in court or resolved in other ways such as short sales or deeds in lieu of foreclosure.