RIVERSIDE – Fewer foreclosed homes were sold at auction last month in Riverside County – partly because some lenders suspended repossessions until more was known about a new law protecting borrowers in default – but the sales rate was still much higher than a year ago, it was announced Monday.

Riverside County ranked third in the state, compared to the other 53 counties, in foreclosures per capita, with a total 3,015 repossessed properties auctioned off in September – roughly one house for every 648 residents –according to Bay Area-based ForeclosureRadar.com.

The sales figure was down 12 percent from August, mirroring a statewide decline in foreclosure sales, which numbered 23,409 – 12.4 percent less than a month earlier, ForeclosureRadar.com reported in its monthly “California Foreclosure Report.”

ForeclosureRadar.com founder Sean O'Toole attributed the slide in foreclosure sales to lenders' response to SB 1137, a bill signed into law by Gov. Schwarzenegger in July, which requires lenders to attempt to meet with defaulting homeowners to identify possible ways to stave off foreclosure.

“Senate Bill 1137 has rendered analysis of current activity against prior foreclosure levels useless in understanding market conditions,” O'Toole said.

“What is important to watch now,” he said, “is how quickly lenders and trustees adjust to the new law. While it is unlikely foreclosures will return to previous levels, given the new requirements, we expect SB 1137 to have no long-term impact beyond delaying the foreclosure process for homeowners and slowing the overall recovery.”

SB 1137 mandates that before a lender can proceed with filing a notice of default against a property, the lender must first try to contact the borrower and determine whether a loan modification or other arrangements are possible to prevent foreclosure.

If a borrower fails to respond to a lender's communications, the lender can proceed with the foreclosure process once a month has elapsed from the time of the last attempt to make contact with the borrower.

Exactly when a borrower goes into default depends on the terms laid out in his or her mortgage agreement. Craig Smith, a Woodland Hills-based real estate attorney, said recently that some lenders are waiting six months before filing a notice of default, mainly because the market is in a trough and lenders are not in any rush to add another empty house to a growing inventory.

The number of foreclosure sales in Riverside County in September was 144 percent higher than a year ago, according to ForeclosureRadar.com.

San Bernardino County, which ranked seventh on the company's list, recorded 2,252 auction sales in September – 10 percent fewer than in August and 163 percent more than the year before.

The highest concentration of foreclosure sales was in Merced County, followed by San Joaquin County, according to ForeclosureRadar.com.