Is Hawai'i headed for an epidemic of home foreclosures that leaves whole neighborhoods or blocks of homes largely abandoned like what has occurred in some Mainland markets?

Statewide foreclosure filings, though rising at a fast clip for nearly two years, might not get that bad. But there is a growing concern that such a risk — no matter how big or small — should be better addressed with more foreclosure prevention efforts in local communities.

Housing Hawai'i, a nonprofit primarily concerned about affordable housing, recently has turned much of its attention to encouraging state and county governments, Hawai'i financial institutions and nonprofits to develop foreclosure prevention resources for homeowners.

Some initiatives put forth by the organization include a state Web site with links to foreclosure help, a local phone hot line, public service announcements and expanding presently thin ranks of certified foreclosure mitigation counselors.

"The time is now to start working on this instead of waiting till we're (as bad as) Las Vegas," said Craig Nolte, a community development manager with the Federal Reserve Bank of San Francisco. "The quicker the community gets a handle on this, the quicker they will find a bottom."

Nolte, whose region includes Hawai'i, has been presenting data including delinquent loans and foreclosures to local government officials, lenders and others in an effort to spur creation of more community-based foreclosure prevention resources.

Nolte said there needs to be more outreach to borrowers to help them refinance or modify loans, which can prevent future foreclosures.

Foreclosures in Hawai'i began consistently rising in mid-2007 from very low levels. According to California-based real estate research firm RealtyTrac, the average number of mortgage default notices per month from January to March this year was 101, up 494 percent from 17 in the same period last year.

By comparison, there were 300 to 400 foreclosure lawsuits filed per month on average during the 1990s economic slowdown — a period that didn't produce neighborhoods blighted by empty bank-owned homes or a precipitous drop in home values to the degree now hitting some Mainland markets.

Historically, about half of all foreclosure starts lead to the loss of a home.

Still, there is a large consensus that the recent steep rise in unemployment — which last month hit a more than 30-year high of 7.1 percent — will keep pushing more Hawai'i homeowners to fall behind on their mortgage payments. This worrisome trend, foreclosure prevention advocates say, needs to be addressed now.

A January report by the Pew Center for Responsible Lending predicts there will be 18,600 homes lost through foreclosure in Hawai'i over the next four years, including 5,600 this year. The four-year projection equates to an average of 388 foreclosures a month.

Charles Wathen, a developer and affordable housing advocate, fears that the Pew Center projection is low and there will be twice as many homes lost to foreclosure over four years, or 37,200. That projection equates to an average of 775 foreclosures per month.

"Foreclosures grow like a cancer," said Wathen, who is a Housing Hawai'i board member.

Local economist Paul Brewbaker of TZ Economics said the local, national and global economies in his view are too fragile to estimate how high foreclosures might rise in Hawai'i, but he suspects foreclosures won't be nearly as bad as the hardest-hit Mainland markets such as California, Las Vegas, Arizona and Florida.

Brewbaker said the recession is largely synchronized globally, and he believes Hawai'i's housing market has weathered the downturn fairly well because there isn't a big overhang of unsold new homes, home prices haven't plummeted and loan delinquencies remain relatively low.

According to the Mortgage Bankers Association, foreclosures were started on about 0.9 percent of mortgage loans in Hawai'i in the fourth quarter of 2008, up from about 0.4 percent in the 2007 fourth quarter and about 0.2 percent a year earlier.

However, foreclosure starts are overshadowed by serious loan delinquencies by nearly five to one, according to Hope Now, a national alliance of debt counselors and mortgage companies organized by the federal government to help consumers keep their homes.

Hope Now reports that while Hawai'i had 1,401 foreclosure starts in the fourth quarter, there were 4,893 loans 60 or more days delinquent. The delinquent loans represent 3.4 percent of Hawai'i mortgages counted by Hope Now.

Brewbaker said the figures remain relatively low in comparison with the Mainland, but he also concurs with Housing Hawai'i that it's prudent to prepare for the worst.

"The community should be concerned about the risks that have manifested in other markets," he said. "A proactive posture is extremely helpful. We're kind of lucky, let's take advantage of the opportunity (of having seen how foreclosures have exploded in other markets)."

Nani Medeiros, Housing Hawai'i's executive director, said she and Wathen aren't trying to scare people by suggesting foreclosures will become a plague in the local community, but it's important to take steps that help ensure that doesn't happen.

Medeiros, Wathen and Nolte shared their views recently with a group of local lenders, state housing agency officials, financial counselors and others — and implored participants to take action.

Housing Hawai'i said some fairly simple things that can be done include setting up a local phone hot line and Web site to connect people with foreclosure prevention resources.

Holding workshops in areas most troubled by foreclosures is another strategy, along with public service announcements.

Housing Hawai'i also suggested that a council or task force be formed to bring together government leaders, lenders and other stakeholders to address various points of view on the issue and produce action plans.

A similar task force in Colorado created a hot line in 2006 with foreclosure prevention options and lender negotiation assistance. The task force also obtained federal funding last year to hire foreclosure counselors and expand hot line services.

In Massachusetts, the state agency overseeing banks established a fixed-rate financing program for struggling homeowners, and put foreclosure information on its Web site including a list of housing counseling agencies.

A task force in Maryland helped introduce foreclosure prevention legislation passed by state lawmakers, and developed a program providing short-term emergency loans to help families stay in their homes while developing a long-term foreclosure avoidance plan.

Wathen said Housing Hawai'i with its staff of one needs government and industry stakeholders to come together and take on the challenge of improving local foreclosure prevention resources.

"We're just a group trying to put everybody together before (foreclosures) get out of hand," he said.

Nationally, Hope Now is a clearinghouse of foreclosure prevention services with a toll-free hot line and Web site.

The industry coalition reported that 812 Hawai'i homeowners were counseled through the hot line last year, up from 142 the year before.

Hope Now also said 4,664 Hawai'i homeowners avoided foreclosure between July 2007 and December 2008, including 2,924 who obtained repayment plans and 1,740 who got loans modified.

Nolte, with the San Francisco Federal Reserve Bank, said demand for these services is much greater than what's being provided, and that Hawai'i residents need similar resources in their community.

Some local resources do exist, including nonprofit and for-profit counseling agencies, but they are fragmented and sometimes obscured by illegal or unethical foreclosure prevention scams that can often discourage troubled borrowers from reaching out.

Local assistance providers also are often understaffed. For instance, the nonprofit Hawai'i HomeOwnership Center, established in 2003 to help people prepare to buy their first home, began offering foreclosure counseling in January with three employees certified by NeighborWorks America, a national nonprofit created by Congress.

Dennis Oshiro, the center's executive director, said demand for such services is more than his counselors can handle, and that more industry players need to get involved.

Since the beginning of February, the center received 182 requests for foreclosure assistance, while the three case workers reasonably can handle a little more than 100 cases a year.