Los Angeles County recorded 16,595 notices of default in the fourth quarter, according to Dataquick, a big drop from the 21,850 notices during the previous three months. This could be more evidence that the worst of the housing slump is over, but it could also be the calm before another wave of foreclosures hits L.A. and the nation in 2010. The state and federal government required lenders and loan servicers to slow the foreclosure process in the last three months and work with borrowers on loan modifications. Those efforts are pretty much running their course - without much luck - and the concern is that both lender and borrower are running out of options. A big jump in foreclosures could bring down prices and create a new housing slump. The median origination month for last quarter's defaulted loans was July 2006, at or near the top of the housing boom. From the Dataquick release:

"Mid 2006 was clearly the worst of the 'loans gone wild' period and it's taking a long time to work through them. We're also watching foreclosure activity start to move into more established mid-level and high-end neighborhoods. Homeowners there were able to make their payments longer than homeowners in entry-level neighborhoods, but because of the recession and job losses, that's changing. Foreclosure activity is a lagging indicator of distress," said [John Walsh, DataQuick president].

NOTICES OF DEFAULT

County/Region 2008Q4 2009Q4 Yr/Yr%

Los Angeles 14,410 16,595 15.2%

Orange 4,481 5,555 24.0%

San Diego 5,543 6,536 17.9%

Riverside 9,151 9,188 0.4%

San Bernardino 7,437 7,290 -2.0%

Ventura 1,308 1,657 26.7%

Imperial 496 503 1.4%

Socal 42,826 47,324 10.5%