Foreclosure actions against Hawai'i real estate remained high in March, but continued to be dominated by filings in pending cases as opposed to new cases, a trend that suggests a binge of bad loans may be working their way out of the housing market.

There were 1,097 foreclosure filings statewide last month, according to real estate research company RealtyTrac.

The figure was the third-highest recorded since the housing and financial markets were destabilized two years ago. The record was 1,534 filings in December, which was followed by 1,302 filings in January and 972 in February.

On a year-over-year basis, March filings represented a 52 percent increase from 724 in the same month last year. The percentage increase was the smallest since June 2008.

While the level of foreclosure actions continues to be troubling, observers note that relatively few filings counted by RealtyTrac involve new foreclosure cases.

RealtyTrac reported that 113 of the 1,097 filings were default notices, typically the first step in foreclosure. The bulk, or 654 filings, were auction notices, while 330 filings represented the last state of foreclosure, lender repossession.

Since November, the number of default notices had been under 100 until the run was broken last month.

Gauging the health of Hawai'i's housing market, however, can be tricky using RealtyTrac data, especially when looking at default notices. That's because the firm may not count all default notices since some aren't filed publicly. Most Hawai'i foreclosure cases are pursued outside court, meaning no foreclosure lawsuit is filed in most cases.

For this reason, RealtyTrac's monthly reports are regarded as a rough indicator of local foreclosures. In addition, RealtyTrac data can include different types of filings on the same property counted in different months, and doesn't exclude filings on commercial property such as condotels and time-share units.

Perhaps a better but less timely gauge is a quarterly survey of mortgage delinquencies by the national Mortgage Bankers Association, which in February published a report that suggested foreclosures in Hawai'i's housing market will continue to rise this year.

The association reported that 12,182 mortgages representing 7.3 percent of the market were delinquent but not yet in foreclosure at the end of last year, up from 8,981 mortgages a year earlier.

Also, there were 7,535 residential property loans, or 4.5 percent of loans statewide, in foreclosure at the end of last year, which was about twice as many as the year before.

Some industry observers note that Hawai'i's core housing market is faring better than foreclosure data suggest because a large number of foreclosures are occurring on Neighbor Island resort property, including time shares, that visitors snapped up during the real estate bubble.

RealtyTrac data by county showed that Honolulu had the most filings — 522 — but the lowest rate, at one filing for every 646 households.

Kaua'i had the next best rate, with 76 filings representing one per 392 households.

On Maui, there were 217 filings, or one per 305 households.

The Big Island had the highest rate, with 282 filings, which equated to one filing per 282 households.

HAWAI'I 13TH WORST

Compared with other states, Hawai'i's rate of one filing per 468 households was 13th worst among states, but better than the national average of one filing for every 352 households.

RealtyTrac said filings in March nationally were at a record high for any month since the company began issuing its report in January 2005.

James J. Saccacio, chief executive officer at RealtyTrac, said in a statement that national filings were more tilted toward the final stage of foreclosure, and suggested that lenders are starting to make a dent in the backlog of distressed property.