When the public sees a story like this, they think that all is good, and getting better, from the U-T:

San Diego County had fewer mortgage defaults and foreclosures in the second quarter than it has had in the past three years, according to a report released today by MDA DataQuick, a real-estate research firm based in La Jolla.

Countywide, 5,458 homes went into default during the second quarter, a 45 percent drop from the total of 9,866 during the same period of last year. That’s the lowest number since the second quarter of 2007, just as the county was slipping into recession.

Foreclosures dropped 6 percent from 3,518 in the second quarter of 2009 to 3,315.

The same trend is showing up throughout California, with the number of defaults dropping for five consecutive months, resulting in a 44 percent year-to-year drop. Foreclosures, however, rose by 4 percent, driven partly by jumps in relatively pricy neighborhoods in Orange County, San Mateo, Marin, Los Angeles, Santa Barbara and San Francisco counties.

John Walsh, DataQuick’s president, said there were several reasons for the decline in defaults, including “motivated sellers and accommodating lenders” who have been doing more short sales; public policy, including tax incentives for homebuyers; and a rise in prices over the past year.

Walsh said that if prices continue to rise, “fewer homeowners will find themselves under water, which is a significant factor in letting a home go.”

Out of the 85 ZIP codes in the county, only two had a rise in defaults: Coronado and Del Mar. Two others had the same number this year as last year: Borrego Springs and the area around Rancho Santa Fe’s post office. Except for Borrego Springs, those neighborhoods are among the priciest in the county, with median home prices above $1 million.

DataQuick noted that statewide, mortgage defaults spread from lower-cost markets into more expensive neighborhoods, although that trend appears to be leveling off.

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