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The Honolulu Advertiser
Posted on: Thursday, May 13, 2010

Hawaii foreclosures rise in April even as recession eases

by Andrew Gomes
Advertiser Staff Writer

Real estate in Hawai'i's foreclosure pipeline hit a high for the year last month, signaling that homeowners continue to struggle with mortgage payments even as the economy and real estate market are showing signs of a slow recovery.

The increase in foreclosures in Hawai'i comes as the nationwide total dipped for the first time since the economy faltered more than two years ago, according to a new report.

Research firm RealtyTrac reported that 1,474 Hawai'i properties were in some stage of foreclosure in April. The figure was a little more than double the year-earlier figure of 684 properties, and was the highest this year next to the 1,302 properties in January. Only one other month had a higher count, and that was December at 1,534.

Relatively high levels of unemployment as well as property values that are still off from peaks a few years ago are largely behind the still-heavy foreclosure problem.

Nationally, foreclosure activity in April decreased by 2 percent from a year earlier. It was the first year-over-year decline for any month reported by RealtyTrac since the company began tracking foreclosures in 2005.

"April was the first month in the history of our report with an annual decrease in U.S. foreclosure activity," James Saccacio, RealtyTrac chief executive officer, said in a statement.

Saccacio said the April figures show that foreclosure activity nationally has begun to plateau but at a very high level that isn't expected to drop off in the near future.

Hawai'i was one of six states with foreclosure counts that at least doubled in April from a year before.

At one foreclosure filing for every 348 households, Hawai'i's foreclosure rate was 11th-worst in the country. It was also worse than the national average of one filing per 387 households.

Until early last year, Hawai'i had maintained one of the best foreclosure rates in the nation, but since then has sunk in the rankings. That's partly because home prices in other states crashed earlier and are now faring better, while Hawai'i's housing market experienced a more moderate downturn that only recently has shown signs of a nascent recovery.

Accurately quantifying distressed Hawai'i home mortgages is tricky using RealtyTrac data because of how the company counts foreclosures.

RealtyTrac reports three types of foreclosure-related filings on property default notices, trustee sale notices and lender repossessions and the data can include filings on the same property counted in different months.

The data also aren't limited to residential property, and include commercial property such as condotels and timeshare units.

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

Among Hawai'i counties, Honolulu had the most filings at 581, but the lowest rate, at one filing for every 580 households.

Kaua'i had the next best rate at one filing per 313 households, based on 95 total filings.

On Maui, the rate was one filing per 187 households, based on 353 total filings.

The Big Island had the worst rate, at one filing per 179 households, or 445 filings in all.

Statewide, the bulk of the foreclosure filings in April 1,093 of the 1,474 filings were trustee sale notices representing properties headed to auction.

Some 268 filings were lender repossessions.

There also were 113 default notices, which are filed in some but not all cases.

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