Foreclosures are Taking their toll in Hawaii

October 22nd, 2007

Filed under: Foreclosure, Foreclosure Crisis, Foreclosure Homes, foreclosure filings

The sub-prime market was created for those with bad credit and could not qualify for prime loans. It was hoped that by introducing it all and sundry would benefit and become a house owner. But nobody took into account the greed and predatory nature of Man trying to squeeze and choke another. When interest rates began to roar foreclosure notices became common creating panic and depression across the country.

Foreclosures are taking their toll in Hawaii also. In comparison to last year the numbers more than doubled last month. It is up by 114% in September 2007 compared to that of September 2006. Thus it is higher than the national average of rise of 99%.

The Hawaiians had bought houses beyond their means. Prices of real estate were soaring and people took easy foreclosure loans to get into them. Some of the loans were sub-prime loans where the interest was floating or ARM. It meant double jumps within a two to three years. When the time came for making higher payments the people buckled under. They just could not afford it. The result was foreclosure notices.

The situation in other states is worse. In Hawaii the ratio is 1:3,600 which puts it in the group of last ten, in nation wide figures. However the situation is slightly different here because of the various ethnic groups that reside. The natives have strong bonds and just cannot walk away without paying dues. The set of values here are different and that is why prices are not slumping here at the same rate as the mainland but holding on. This means there is plenty of equity left on the foreclosed houses. The people are having trouble no doubt but they are clinging on with hopes and firm determination not to relinquish hold.

The general advice is that they should act now without delay. The alternative is to hunt around for a fixed rate mortgage and shift from the ARM that inevitably leads to foreclosures. Another point is for those who are just about to buy a unit – be sure that it suits the pocket of the individual. Over reaching gets one nowhere but into a foreclosure mess. The average price of a condo is $300,000 and it is double that for a house.

It is expected that this high trend of foreclosures will continue for another year or so.

Via

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