Thousands of homeowners in the Bay Area received delinquency notices last month, as lenders worked their way through a backlog of distressed mortgages that began building nearly a year ago, according to a report released Thursday by RealtyTrac.
"We're definitely seeing signs that lenders are ramping back up," said Daren Blomquist, of, an online foreclosure marketplace headquartered in Irvine.
Default notices are the first step in the foreclosure process and are sent to homeowners who are behind three months or more on their mortgage payments. But many of these homeowners actually have been delinquent for a year or more, Blomquist said. Lenders until recently have been bogged down in a robo-signing scandal, and default notices have been slow to go out.
"A lot of these are delayed or deferred foreclosures that under normal circumstances we would have seen earlier this year," he said. "But because of delays, many have not been making their payments for more than a year."
Lenders sent out nearly 3,500 default notices in October to homeowners in Contra Costa, Alameda, San Mateo and Santa Clara counties, according to RealtyTrac's data. That was up more than 10 percent from September but about even with September 2010.
"We're getting back close to where we were before all this robo-signing and foreclosure documentation controversy hit," Blomquist said.
Default notices were up 14 percent from last year in Contra Costa County and 18 percent in Santa Clara County and were almost unchanged in Alameda County. Only San Mateo County saw a drop.

More defaults could be on the way if the economy doesn't start adding jobs. Carlos Jimenez, a former state worker who lives in Tracy, said he's been out of work since June and is facing a grim choice -- make the credit card payment or pay the mortgage. It's not unlike the decisions thousands of families have had to make since the housing crisis began.
"You pay the credit card, because these credit card companies are worse than the banks," Jimenez said. His unemployment insurance runs out Jan. 7, and his wife's job is not covering their expenses. His efforts to get some relief from state and federal housing assistance programs have gone nowhere, he said.
Total foreclosure activity, including notices of trustee sale and bank-seized property, dropped 8.5 percent from a year ago but was little changed from September in the four counties.
Actual foreclosures, in which a bank sells a foreclosed home, were level with a year ago but up from September.
With so many more homes entering the foreclosure process now, actual foreclosures are expected to rise in the months to come.
Lenders still appear to be working their way through the backlog methodically, careful not to flood the market with foreclosed homes. Foreclosures often sell for 20 percent or more below the market price and can lower the value of surrounding homes.
The figures for default notices show that despite employment gains in some sectors such as tech, many Bay Areas homeowners continue to struggle to make their mortgage payments.
How quickly the default notices carry through to actual foreclosures depends on several factors: the volume of foreclosures being processed, how big a hit banks are willing to take on their balance sheets and the success of state and federal programs to prevent foreclosures.

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