A nine-year drop in California foreclosure activity appeared to level off during the second quarter, the result of a maturing real estate cycle and cooler appreciation rates, a real estate information service reported today.

Lending institutions sent default notices to 12,408 California homeowners during the April-to-June period, down 14.4 percent from 14,501 for the first three months of the year, and down 0.9 percent from 12,520 for last year’s second quarter, according to DataQuick Information Systems.

Default notices (NoDs) peaked in 1996’s first quarter at 59,897. The low was last year’s third quarter with 12,145.

“We have to remember that a certain level of foreclosure activity is normal in any market. Current foreclosure rates are unnaturally low and we expect them to go up during the rest of this year as appreciation rates ease back,” said Marshall Prentice, DataQuick president.

The statewide median home price rose 16.7 percent during the second quarter to $433,000 from $371,000 a year ago. The year-ago rate of increase was 22.8 percent, DataQuick reported.

Southern California saw a slight year-over-year increase in foreclosure activity, while the San Francisco Bay Area and Central Valley saw slight decreases.

Mortgage loans are least likely to go into default in San Luis Obispo, San Francisco and Napa counties, according to DataQuick. The likelihood is highest in Central Valley counties.

Only about 10 percent of homeowners who end up in the default process actually lose their homes to foreclosure. Most are able to stop the foreclosure process by bringing their mortgage payments current, or by selling their home and paying home loan(s) off.

While foreclosure properties tugged property values down by almost 10 percent in some areas nine years ago, the effect on today’s market is negligible, DataQuick reported.

DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

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