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Sonoma County foreclosure activity fell to its lowest level in nearly six years at the end of 2012, even as short sales became the primary way that distressed homeowners surrendered their homes.

The county recorded 452 default notices in the fourth quarter, according to real estate information service DataQuick. The notices, the first step in the foreclosure process, decreased nearly 45 percent from a year earlier and were the lowest for any quarter since 407 notices were filed in the first quarter of 2007.

Homeowners lost 269 properties to foreclosure, a decline of 31 percent from a year earlier. The quarterly number was the lowest since the third quarter of 2007 when 201 trustees deeds were filed to take back homes.

“Home values increased through most of 2012, and the rate of increase picked up toward the end of the year,” said John Walsh, DataQuick president. “That means fewer and fewer homeowners are underwater, where they owe more than their homes are worth. That in turn means they can sell and pay off the mortgage, or perhaps refinance at today’s low interest rates.”

Walsh predicted the increase in home values and the various government efforts to prevent foreclosures would lead to fewer trustees deeds filed this year.

Foreclosures peaked in the county in 2008, when 2,820 homes were taken back by the banks. By last year, the number had fallen to 1,228 trustees deeds.

During the past six years, more than 14,000 county homes have been surrendered to either foreclosure or short sales. That amounts to roughly one out of every seven county homes with a mortgage.

DataQuick analysts suggested foreclosures also are dropping because banks are allowing more short sales, where the home is sold for less than what is owed on the mortgage.

Last year the county recorded 1,246 short sales, the first time such transactions outnumbered foreclosures. In contrast, in 2011 there were 990 short sales and 1,898 trustees deeds recording the surrender of property.

Statewide, default notices fell to 38,212 in the quarter, a decreased of nearly 38 percent from a year earlier. Trustees deeds totaled 21,127, a decline of 32 percent from a year earlier.

— Robert Digitale

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