New Non-Judicial Law for Foreclosing in Hawaii
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It has been six months now since Hawaii introduced a law that put the brakes on foreclosure operations. However, a trickle of foreclosure cases have come through the Circuit Court and not through non-judicial processing. Till the enactment of the law, many foreclosures had been rushing through the non-judicial channel.
According to RealtyTrac, foreclosures were seen to have decreased by about 66% last October from what it was in October 2010. This year, there were 427 foreclosures filed in October in Hawaii. In 2010, there were 1,271 foreclosure cases filed. The law became effective from May 5th of this year. Between the months of September and June, the foreclosure numbers were 414, 413, 390 and 344 respectively.
Foreclosure laws also ban lenders from going through the non-judicial route until a mediation plan has been offered to the house owners. Lenders must go through the legal process approved by the Department of Commerce and Consumers Affairs in their respective states.
The recently approved non-judicial process compels lenders to take part in the mediation program with eligible borrowers, if the latter asks for it. Eligible borrowers are generally those who have stayed in their houses for a minimum of 200 days. Foreclosure suits brought by homeowner associations are often excluded from mediation. Foreclosure actions against investors are also exempted from this mediation rule.
Local housing advocates also claim that the law is defective. They think that the new non-judicial method s will not be practical- they impose monetary finds for even the smallest transgressions. This has led many lenders to bring borrowers to court in order to foreclose on their properties.
According to the findings of the judiciary, 338 foreclosure suits were filed last October. In October 2010, the number was only 108. A rough estimate also indicates that judicial cases have numbered from 200 to 300 each month since last June.
In Hawaii, non-judicial foreclosures had always been popular for lenders. 90% of the cases hitherto were non-judicial because this process saved time and money.
There is a difference between court counts and the counts made by RealtyTrac. The court includes new cases that have been filed, auction notices as well as bank repossessions. However, RealtyTrac gets its data from various sources. RealtyTrac reported that 31 other American states had higher number of foreclosures than Hawaii; in this state the ratio was 1:1,208.
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