Several areas in the Big Island of Hawaii are experiencing an increase in the number of foreclosure properties. Kona tops the state in terms of high foreclosure rates in July.
Industry analysts said that Kona leads the foreclosure listings growth because many of the distressed properties in the area were second houses or investment properties. They said that with the drastic drop in property values in previous months, many homeowners decided to walk away from their distressed houses rather than spend more money on mortgage payments.
Last month Kailua-Kona posted foreclosure filings on 78 properties. This means that one in every 200 households received a foreclosure filing. In Waikoloa, 23 foreclosure filings were posted, meaning one in every 125 homeowners was at risk of foreclosure. In the area of Waimea-North Kohala, 16 foreclosure filings were reported, representing one in every 286 homes in danger of foreclosure.
In the East Hawaii area, foreclosure rates were up in Ocean View and Puna, mostly involving investment properties. In July, 21 properties in Puna and some areas in Ka'u east of Pahala received foreclosure filings, representing one in every 264 houses in danger of foreclosure.
According to industry analysts, aside from second and investment properties, a high number of primary houses in the region are in danger of foreclosure. They said that at risk of foreclosures are properties with owners who purchased or refinanced starting 2007.
They pointed out that a major factor driving the high foreclosure rate in the Big Island is its 11.5 percentage point unemployment. Analysts said that many homeowners who lost their jobs struggled to keep their mortgage accounts current and at the same time buy basic needs such as food and gas.
Industry experts said that distressed homeowners should not just give up and walk away from their properties even if they are worth less than the total mortgage they owed on them. Housing counseling services are provided for free by housing counselors certified by the U.S. Housing and Urban Development (HUD).
Statewide, the foreclosure activity rose to a record high last month. And the Big Island posted the second highest foreclosure activity with 197 filings, representing one in every 394 homeowners.
Industry analysts noted the long list of Hawaii Island foreclosure properties scheduled to be auctioned on September 11. But the problem is the lack of buyers on the scheduled auctions.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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