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Foreclosure activity in Sonoma County remains at or near a five-year low, and analysts attribute the slowdown to more short sales, a stronger housing market and more rules on banks.

Lenders in the third quarter sent county homeowners 597 notices of the default, the first step in the foreclosure process, according to DataQuick, a San Diego-based real estate information service. The number had decreased 33 percent from a year earlier and was the lowest since 462 notices were recorded in the second quarter of 2007.

Homeowners lost 304 houses and condominiums in foreclosure in the third quarter. That was higher than the 258 foreclosures from the previous quarter, but still lower than any other quarter since the end of 2007.

“I think we’re through the worst of it,” said James Madison, an agent with Coldwell Banker who specializes in bank-owned foreclosures. Even so, he and other agents predicted at least a few more years of foreclosure numbers above historic levels.

Since 2007, more than 10,000 county homeowners have lost their properties in foreclosure. The annual total peaked in 2008 at 2,820 homes and has slowly declined over the past three years, falling to 1,898 in 2011.

A year ago, foreclosure resales outnumbered short sales — a transaction where the price paid for the home is less than the amount owed on mortgage.

But this year the results reversed themselves and have shifted dramatically in the past three months. In the third quarter, there were 316 short sales, compared to 165 foreclosure resales, according to The Press Democrat’s monthly housing report.

For the quarter, such distressed properties amounted to 34 percent of sales, compared to 43 percent a year earlier.

DataQuick President John Walsh said across the state “we’ve seen short sales overtake the foreclosure process as the procedure of choice to deal with homeowner distress.”

He also suggested that the rise in home prices may be helping more troubled homeowners escape foreclosure, allowing them to sell their homes and receive enough to pay off the entire mortgage.

Other analysts this year have suggested that new banking rules also have cut the number of foreclosures. The nation’s biggest banks and state attorneys general agreed to new practices as part of the “robo-signing” settlement in February. Also, in California, the Homeowners’ Bill of Rights will take effect in January, specifically allowing homeowners to sue lenders for failing to follow new rules.

For California, notices of default in the third quarter declined 31 percent from a year earlier to 49,026. Trustees deeds, which record the loss of the home to foreclosure, fell 41 percent to 22,949.

— Robert Digitale

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