Near the steps of the Kaua‘i County Courthouse Friday, an appointed auctioneer read off a list of 14 properties scheduled to be auctioned that afternoon, but none met the gavel. Instead, 13 were postponed and one was canceled. “About 80
Near the steps of the Kaua‘i County Courthouse Friday, an appointed auctioneer read off a list of 14 properties scheduled to be auctioned that afternoon, but none met the gavel. Instead, 13 were postponed and one was canceled.
“About 80 percent (of properties up for auction) get postponed, sometimes four times or more,” said Ron Margolis, Hawai‘i Life Real Estate short sale specialist. “The reason for the delays is not clear. It could be more time is needed to process the paperwork, it might be to stagger the volume.”
This process of extending foreclosure action is something that has been going on for the last few years, say local real estate agents.
Future delays will now be due to a halt in foreclosures ordered from banks like Bank of America Corp., GMAC, JPMorgan and PNC.
BAC’s moratorium on foreclosures began Friday, and it will remain in place until the lender has completed a review of its foreclosure filing practices.
The majority of the distressed loans on the island are held by BAC, which the bank inherited when it took over Countrywide Financial during its collapse in 2008.
“Banks in general are slow to catch up to Hawai‘i properties, as they had too many foreclosures in the Mainland states,” Kaua‘i Dreams Realty broker Julie Black said.
The new moratorium may be welcome news for delinquent borrowers facing bank action; however, it may also be a disincentive for buyers looking for distressed properties.
“All the buyers out there right now are bargain hunters,” said Gail Paris, REO broker for Vision Realty.
She has 10 REO listings and estimates that from the top of the market, the price reductions are in excess of 50 percent.
Of the 54 homes sold in September, Margolis said 26 were distressed sales, which include both short sales and foreclosures.
As of this week, there are 1,291 properties currently on the market in Kaua‘i, or 24 months worth of inventory at a rate of 54 sales per month.
More than three or four months of inventory is generally considered to be a buyers market.
Forty of the market’s current listings are active REOs, and another 28 are REOs currently in escrow awaiting close, Black said.
REOs make up about 20 percent of the sales volume.
“I think it’s going to take at least a couple of years for the market to clear,” Paris said.
“The bank is not even asking people to move out. They would rather have people living there than have it vulnerable to vandalism and thieves.”
One local property foreclosed three years ago, she said, and the former owners are still living in it in exchange for maintaining the property.
