Harris Real Estate University students living in Hawaii……get ready for an incredible increase in foreclosures. Agents who are doing BPOs and Listing REOs…you are about to get very…very busy.

This article is from Honoluluadvertiser.

Foreclosure filings in Hawai’i rose to their highest level since the present real estate market downturn began, soaring a record 503 percent to 724 from 120 in the same month last year, real estate research firm RealtyTrac reported.

A decline in property values and continued constriction of home sales have made avoiding foreclosure harder for many people who can’t pay or refinance their mortgage in a poor economic climate that has included widespread cuts in wages and jobs.

Last month, the state’s unemployment rate hit a more than 30-year high of 6.5 percent.

Based on RealtyTrac’s count of total filings, Hawai’i’s 503 percent increase in March was second only to a 563 percent increase for North Dakota.

There was one foreclosure filing for every 700 households in Hawai’i. There were 29 states with a better ratio, which sharply contrasts with the position Hawai’i consistently had enjoyed before the middle of last year — among the 10 best states.

The national average was one filing per 375 households. Nationally, there were 341,180 foreclosure filings in March, up 46 percent from a year earlier.

James Saccacio, RealtyTrac CEO, said U.S. foreclosure activity in March reached a record level since the company began collecting and reporting data in 2006.

Saccacio said demand for homes is up in some harder-hit markets, but that is unlikely to offset a growing number of foreclosures in the pipeline accelerated by rising unemployment.

Among Hawai’i counties, Honolulu had the highest overall number of filings at 323, but the lowest rate per households at one filing per 1,037 households. The Big Island had 175 filings, or one per 444 households. Maui had 178 filings, or one per 365 households. Kaua’i had 48 filings, or one per 608 households.
increase in numbers

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While the general consensus from local economists and foreclosure attorneys remains that foreclosures are getting worse, the latest figures from RealtyTrac were inflated by a big congregation of foreclosure sale notices in March on properties counted in previous months as default notices.

The double counting is part of California-based RealtyTrac’s methodology, and results in an imperfect measure of how many homeowners are encountering foreclosure in Hawai’i and nationwide.

The totals by RealtyTrac attempt to present a rough picture of the foreclosure problem, as there is no readily achievable perfect way to count exactly how many people are losing their homes because lenders initiate foreclosure.

Some homeowners may receive a foreclosure notice and resolve the problem, perhaps by curing the default, restructuring the loan or selling the home before foreclosure auction. In that case, RealtyTrac would count one filing for such a property.

But if a homeowner loses their home at foreclosure auction, the property could be counted by RealtyTrac three times in different months — first as a default notice, then as a trustee sale notice and then again if the lender acquires the property in what’s called a real-estate-owned transaction.

According to RealtyTrac counts of only default notices, which are the first formal step in most Hawai’i foreclosures, there was a monthly average of 101 such filings from January to March, compared with 17 in the same three months last year. That’s a 494 percent increase.
difficult to count

Still, many observers don’t regard the present level of foreclosures to be as bad as what occurred in the mid-1990s during the last economic slump and real estate market downturn that hit Hawai’i.

Back then, there were typically 300 to 400 monthly foreclosures initiated usually by lawsuit, which made foreclosure cases easier to count.

Since then, nearly all foreclosures have occurred in a nonjudicial process that makes cases more difficult to count.

RealtyTrac said it collects data from more than 2,200 counties nationwide, representing about 90 percent of the U.S. population.

RealtyTrac includes commercial property in its count, which has a significant local impact because of Hawai’i’s sizable number of condotels and time-share units, many of which have faced foreclosure.

The March figures showed Nevada had the worst foreclosure rate at one filing per 56 households. The best rate was in Vermont, which had one filing per 77,859 households

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