NORTH BAY -- The number of North Bay homeowners entering default fell markedly in the third quarter of the year, part of a statewide trend that has brought defaults to their lowest level in more than three years, according to a new report by San Diego-based real estate data tracking firm DataQuick.[poll id="41"]

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Notices of default -- a first step in the foreclosure process -- fell 33.4 percent in Sonoma County compared to the same quarter in 2011, with 597 notices. In Marin County, defaults fell 18.3 percent, to 241. Napa County saw a 42 percent decline at 152 defaults, and Solano County defaults fell 34.7 percent to 918.

The number of trustee's deeds recorded in California, indicating a finalized loss of a home to the foreclosure process, was down 41 percent versus the third quarter 2011, according to the report. There were 22,949 homes foreclosed on during the quarter, down from an all-time peak of 79,511 in the third quarter of 2008 and up from an all-time low of 637 during the second quarter of 2005.

In Sonoma County, there were 304 trustee's deeds recorded during the third quarter -- 38.2 percent fewer than during the same period in 2011. That number fell 58 percent in Marin County, to 55. There were 42 percent fewer trustee's deeds recorded in Napa County, with 66, and 43.1 percent fewer in Solano County, at 518.

In the report, DataQuick CEO John Walsh noted that short sales have overtaken foreclosures as "the procedure of choice to deal with homeowner distress." He cautioned that the rate may change next year, following the expiration of a temporary debt-forgiveness feature in the tax code.

Short sales made up an estimated 26 percent of resale activity during the quarter, up from 22.9 percent in the prior year.

Meanwhile, foreclosure resales accounted for 20 percent of all California resale activity in the third quarter. That number was down from 34.2 percent during the same period in 2011.

Mortgage defaults were concentrated in zip codes where median home prices were below $200,000, with a median average of 8 defaults per 1,000 homes, according to the report. The majority of loans entering default were from the period between 2005 and 2007, with a median origination quarter of 2006 that the firm said indicates a period of weak underwriting standards.

Homes took an average of 7.9 months to go through the formal foreclosure process in September, down from 9.9 months a year before.

Of the roughly 8.71 million houses and condominium properties in California, 1.48 million have been involved in a foreclosure proceeding in the past five years. Of those 1.48 million, 847,067 completed the process and 633,00 were either sold or payments brought current.