Hawaii mortgage woes up

The state was at 40th in September with 135 foreclosure filings

Foreclosures in Hawaii are increasing, according to a report released yesterday by the real estate research firm RealtyTrac.

The state's September foreclosure rate -- one filing for every 3,638 households -- ranked it only 40th among all the states, and far below trouble spots like Nevada and California. Nationwide there was one foreclosure for every 557 households.

Hawaii's 135 foreclosures last month amounted to a 6.9 percent drop from August.

But on a year-over-year basis, Hawaii's September rate is up 145 percent, ahead of the national rate of increase of 99 percent.

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Hawaii ranked 40th in the rate of foreclosure filings nationwide last month, up one notch from August, according to data being released today by RealtyTrac.

The company's September 2007 U.S. Foreclosure Market Report also found that the rate of foreclosure filings here grew faster than the national average.

"It's not too much above the national average, but the fact that the rate of foreclosures is increasing in Hawaii means that there are more people in Hawaii that are having trouble paying their mortgages," said Daren Blomquist, marking communications manager for the Irvine, Calif.-based company. "I don't want to minimize the problem that these people are having by saying that it's lower than in other states."

Hawaii reported 135 foreclosure filings in September -- a rate of one foreclosure filing for every 3,638 households, RealtyTrac said. That was a 114.29 percent jump over September 2006, but a 6.90 percent drop from the previous month's filings.

Nevada, California and Florida continued to post the top foreclosure rates nationwide.

The company tracks more than 1 million properties from nearly 2,500 counties across the country for MSN Real Estate, Yahoo! Real Estate and the Wall Street Journal's Real Estate Journal.

Nationally, RealtyTrac said foreclosures in September jumped 99 percent from year-ago levels to a total of 223,538, but went down 8 percent from the 32-month high in August.

"U.S. foreclosure activity experienced a fairly broad-based retreat in September, with 39 states reporting decreasing activity and national numbers down in all foreclosure categories -- defaults, auctions and bank repossessions," said James J. Saccacio, chief executive officer.

"It's too early to tell if September's numbers represent a one-month lull or if they could signify that more buyers and investors are getting back in the market and snatching up discounted foreclosure properties, thereby providing a release valve for distressed homeowners and overwhelmed lenders," he said.

Despite an overall decline in monthly foreclosure rates, the national number -- one for every 557 households --- was the second highest number for foreclosure filings that RealtyTrac has reported since January 2005, when it began issuing the monthly reports.

While Hawaii was among the states posting a decrease from the prior month, reduced affordability and rapid price appreciation could make it vulnerable to foreclosure driving market conditions, Blomquist said.

"It's generally true that market conditions are stronger in Hawaii where there are different forces at work than on the mainland," Blomquist said. "We would expect it to remain low in comparison to other states; however there is a point where if prices keep rising too quickly that affordability becomes an issue."

If the percentage of people who can afford a median home in Hawaii drops below 20 percent that could put the islands in the danger zone, Blomquist said, adding that affordability in California -- one of the states with the highest foreclosure rates -- dropped to 17 percent of the population in 2006.