After dropping like a rock in September, San Diego mortgage default notices declined again — mildly, this time — in October.

In last month’s report, I attributed the decline in default notices (NODs) to a new state law requiring an extra 30 days before homeowners can be put into foreclosure. But trustee sale notices (NOTs), which take place further along in the foreclosure process, slowed down considerably in October. Trustee notices can take place no sooner than 90 days after default notices, so the drop in NOTs can’t have been directly caused by the prior month’s drop in NODs.

The drop in trustee sale notices suggests that more than just the extra-30-days state law may be at work. Perhaps some of the many and varied bailouts underway have been causing lenders to hold off on initiating foreclosure activity. (If this is the case, however, Treasury Secretary Paulson’s just-announced switcheroo from propping up mortgage markets to goosing consumer spending could shake things up). Or perhaps lenders just took a breather as they did last November.

These are all just speculations, of course. The next couple of months should help us put the pieces together a little better.

— RICH TOSCANO

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