Foreclosures have dropped to their lowest level in Sonoma County in six years, a decrease attributed to new state laws and other regulatory efforts aimed at keeping borrowers in their homes.
Banks seized 154 homes in foreclosure proceedings during the first quarter, down 42.8 percent from the previous quarter, according to a report Tuesday by San Diego information service DataQuick.
It was the lowest figure for the period since 94 homes were lost in foreclosure auctions in the first quarter of 2007, a time before housing prices took a historic plunge.
Foreclosures already had dropped significantly last year under unprecedented government efforts to offer refinancing, loan modifications and reductions in loan principal to troubled homeowners. But activity declined even farther when a package of new state laws, the Homeowners Bill of Rights, took effect Jan. 1.
“Default notices fell off a cliff in January, then edged up,” said DataQuick President John Walsh.
The number of foreclosures still may pick up somewhat later this year, Walsh said, “if lenders need to play a lot of catch-up.”
In the past five years, a total of nearly 10,000 local property owners have lost houses and condominiums to foreclosure.
Foreclosures peaked in Sonoma County in 2008, when 2,800 homes were taken back by banks or sold to third parties at auction. But foreclosures have been falling for four straight years, dropping sharply last year to slightly more than 1,200.
Statewide, more than 300,000 underwater or distressed homeowners received some type of assistance to stay in their homes, said Madeline Schnapp, director of economic research for ForeclosureRadar, a Truckee company that tracks foreclosure data. One result is that distressed properties no longer play as big a role in a state housing market that is relatively low on homes for sale.
“The reason you're seeing such a low inventory is that distressed properties have gone away very quickly, primarily due to government interventions,” Schnapp said.