Hawaii Housing News

News, Tips and Opinions About Hawaii Real Estate and Housing

Weekend Waves

by

Aloha, friends! Here are some snippets of activity from HawaiiHousingNews.com to keep you going through the sunny weekend:

A writeup by Janis Magin in Pacific Business News reports low appraisals on the Big Island are keeping home sales figures down. It’s not news to anyone that foreclosure rates on the largest island in Hawaii have been a problem. Foreclosed homes and short sales makeup such a large percentage of the total volume that this distressed inventory is keeping the entire market down – even affecting homes that aren’t in any distress situation at all. Is this something we change or do we have to plow ahead through the distressed inventory until we can right the ship? And is that even a possibility with the statewide foreclosure moratorium just put into law?

Here’s one for all you commercial real estate folks — or those of us who just like to shop. It looks like Ward Centers is going to put on a new face. Plans for a new parking garage and more retail stores are underway, all part of renovations by the Howard Hughes Corporation. Initial work will primarily be cosmetic – paint and landscaping. However, it’s the 900-stall parking structure that should help alleviate the circling around as people head to the movies, Dave and Buster’s or Big City Diner.

Shopping for a Waikiki condo for yourself or as a rental investment? Coldwell Banker Pacific’s 3rd annual “Waikiki is Open” will showcase multiple units throughout the tourist mecca. Try not to bump into clueless visitors in obviously “Hawaiian” $5.99 floral t-shirts abruptly stopping in the middle of the Kalakaua sidewalk poring over their maps to make sure they can find the nearest Starbucks.

Next up: your retirement. What? You don’t have one? It disappeared somewhere around 2005? Not to fear – a self-directed IRA can put you back in the driver’s seat. My friends Dan and Bill at Entrust Hawaii are having a FREE seminar this Sunday in the Paki II room over at the Bishop Museum from 3-5pm. I have one and it’s a fantastic financial vehicle for the right type of investor (hint: it’s called “self-directed” for a reason). Register HERE.

Governor Neil Abercrombie made some news this week and it had nothing to do about foreclosures. Our state leader is taking on Hawaii’s ever-growing homeless problem and we applaud his efforts. Let’s see how the new plans materialize, but anything to help people in need should at least be given some respect and some attention. Good luck to ya, Guv!

Lastly, it looks like the south and west shores is where the surf’s up this weekend with some modest 2-3s on both sides. Me? I’ll be doing some waterfall exploring behind Manoa before taking my longboard out to Cliffs. Have fun, everyone!

Abercrombie Signs Hawaii Foreclosure Moratorium Bill SB 651

by

On May 5, 2011, Hawaii Governor Neil Abercrombie signed into law SB 651 which is being called the nation’s toughest foreclosure bill on record, putting a supposed to end to robotic and other forms of unlawful or inappropriate foreclosures on Hawaii’s real estate property owners. Provisions of SB 651 enact a moratorium on all new non-judicial foreclosures through July 1, 2012 (owner-occupants only – does not apply to second homes). The new legislation gives owners the option to meet face to face with their lender before a foreclosure can occur.

“The credit for this today is, in fact, a reflection of what we try to be in Hawaii, which is good neighbors and good friends to one another,” said the Hawaii governor. “We want to try and avoid if we can, to put the consumer, the homeowner, in a position where they feel the entire institutional establishment is lined up against them.”

The primary objective of the mediated in-person meetings between mortgagor and mortgagee is that a compromise can hopefully be reached. This is a direct aim at the local notion that Hawaii’s high foreclosure rate (11th in the nation according to recent figures) can largely be attributed to a mental disconnect between Hawaii homeowners and mainland lenders.

However, residents currently in preforeclosure should not jump for joy just yet. This is not a free pass to avoid foreclosure in Hawaii. Homeowners will still be required to bring all documentation to mediation and prove that they can financially pay a modified loan, if that is their goal. At the other end of the table, the lender must show that it has the legal authority to foreclosure upon the mortgagee. This means demonstration of proof of chain of title.

How SB 651 Affects YOU

So what does this mean for the Hawaii homeowner currently in preforeclosure or in general trouble with their mortgage? Well, you might be able to take a deep breath and relax – a bit. You still need to do some legwork yourself to increase your odds of a successful loan modification, but you can also take some comfort under the umbrella of a new law designed for your protection.

If you’re a Hawaii real estate investor, then you may want to consider a change in your marketing strategy a bit since there may be fewer homeowners seeking a short sale and opting for loan mod’s instead. If you’re a foreclosure buyer, then it seems you’ll have to focus on judicial foreclosures instead – not the norm here in the Aloha State but they do happen.

And for the general resident, does this affect you? Do you expect to somehow share in the cost of this new program via new taxes? Is it worth it? How do you feel this will affect real estate prices in your neighborhood? Are you in favor of SB 651 or not?