Hawaiian Waves of Foreclosure Listings Coming

by Simon Lindsay on States

Hawaii, which has been largely outside the radar of foreclosures list in the past several months, experienced a staggering increase of 503 percent in foreclosure filings in March, according to data compiled by RealtyTrac.

In March, properties added to foreclosure listings increased the state’s foreclosure rate to 1 unit in every 700 housing units. A total of search724 households received a foreclosure filing, representing an overwhelming increase of 503 percent over February. This increase is the ninth straight month of foreclosure increases for Hawaii.

Hawaii foreclosures in March accounted for much of the state’s foreclosure activity in the first quarter of this year.

Daren Blomquist, marketing and communications manager of California-based foreclosure tracking enterprise RealtyTrac, said Hawaii has been behind in the past in foreclosure activity. He said signs are starting to indicate the state has more properties in danger of being added to foreclosure listings.

Foreclosure listings in the state are growing because of adjustable-rate mortgages taken by many borrowers are starting to being adjusted by lenders, increasing monthly payments to unaffordable levels. Job layoffs and the economic downturn have also been keeping some distressed homeowners from being to save their homes from foreclosure listings.

To help address the problem of foreclosure listings in Hawaii, a new think tank called Housing Hawaii was launched by Nani Medeiros, a housing advocate who worked as housing and homeless consultant under Governor Linda Lingle for six years. She has also worked for the state legislature in the areas of budgets and policies.

Medeiros reports that residential properties in Hawaii were among the world’s most unaffordable in the past two years. Now, she said, the average homeowner has lost about $24,700 in home values, largely because of the growth of foreclosure listings.

According to Medeiros, 77 percent of Honolulu homeowners are aged 52 and are eager to retire. But working couples in the city can not afford to buy houses because of their income, based on Hawaii Housing statistics. The additional pressure of foreclosure listings is clouding the housing dislocation in the state.

The rise in properties added to bank foreclosure lists is also expected to reduce state and city tax collections by an estimated $4 billion in 2010.

Medeiros is urging state officials to learn from the prevention initiatives of other states, such as state-backed loan refinancing schemes, mandatory loan modification schemes and provision of free foreclosure counselling to first-time homebuyers.