Foreclosures leveling off?

Foreclosure activity showed signs of leveling off in Sonoma County during the second quarter even as it continued to spiral to unprecedented highs in other parts of the state, according to a study issued Tuesday.

Lenders sent 1,376 default notices to Sonoma County borrowers who fell behind on their mortgages, down 1.1 percent from the first quarter, when lenders issued 1,392 default notices, according to DataQuick Information Systems, a real estate research firm.

Statewide, default notices rose 6.6 percent from the first quarter, impacting a record 121,341 loans. The increase, however, was much smaller than seen in previous quarters.

“The small increase in defaults from the first to the second quarter may indicate that we’re nearing a plateau,” said John Walsh, DataQuick president. “We won’t know until the end of the year, but it may be that some lenders are starting to prioritize workouts with homeowners instead of grinding things through the foreclosure process. Of course, they may just be swamped and can’t handle processing any more paperwork.”

The housing slump is continuing to take a toll on homeowners in Sonoma County. Every week, more than 100 borrowers fell behind on payments or stopped paying their mortgages, triple the number from a year ago. Most purchased their homes near the peak of the housing boom in 2006.

Statewide, most of the loans that went into default last quarter were made between September 2005 and November 2006, according to DataQuick.

California homeowners were a median five months behind on their payments when the lender filed the notice of default. The borrowers owed a median $11,583 on a median $346,400 mortgage.

On home equity loans and lines of credit, homeowners were a median eight months behind on their payments. Borrowers owed a median $3,492 on a median $60,000 credit line.

A default notice is the first step in the foreclosure process. Of the homeowners in default, only 22 percent emerge from the foreclosure process by bringing their payments current, refinancing, or selling the home and paying off what they owe, DataQuick reported. A year ago, it was about 52 percent.