Lenders issued 70,051 notices of default (NODs) on California homes in Q210, down 43.8 percent from the second quarter of last year to the lowest level seen since 2007, according to the San Diego-based real estate research firm, MDA DataQuick.

     The Q110 level was the lowest since Q 207 when 53,943 NODs were filed in the state. The peak came in Q109 when lenders filed 135,431 NODs. The movement of defaults from the lower-cost markets to the more expensive neighborhoods is slowing. The most affordable zip codes represented 40.1 percent of all default activity in Q210, nearly level with the 40.9 percent share reported in the previous quarter. Home prices have come up  from the low over the past year. If they continue to rise, fewer homeowners will find themselves under water, which is a significant factor in letting a home go, said John Walsh, president of DataQuick.

     Of all homes foreclosed in the two years ending in March, 85.7 percent have been resold on the open market. A year ago,thatfigure was 83.5 percent. REO salesaccounted for 36 percent of all California resale activityin @210, down from 42.5 percent in the previous quarter. At its peak in Q109, REO made up 57.8 percent of all resales in the state.