The number of homes entering the foreclosure process declined steeply in September — but the drop is likely temporary.

The blue line on the accompanying graph represents how many Notices of Default, which are the nastygrams sent to delinquent borrowers, were delivered in September. The orange line tracks Notices of Trustee Sale, which inform said delinquent borrowers that their homes are about to be repossessed.

The graph makes it pretty clear that NODs dropped like a rock last month. We haven't seen a number of default notices this low since February 2007 — a breezier time, when it would have seemed laughable to suggest that mainstream media outlets would be publishing stock photos of Depression-era breadlines a year and a half down the road.

Trustee sale notices, for their part, more or less soldiered on.

It's pretty unlikely that the number of folks blowing off their mortgage payments dropped in half (and then some) in a single month. Instead, it appears that the statewide foreclosure legislation I mentioned a couple months ago is making itself known. The law inserts an extra 30 days into the period between an initial missed payment and the eventual NOD. It would explain why NODs fell off a cliff while NOTs remained relatively unchanged.

If the new law is at work, that blue line is likely to start heading up again within a month or two.

— RICH TOSCANO