While the nationwide foreclosure rate continues to increase, California numbers are dropping. Thanks to the new foreclosure law enforced last September.

This law requires all banks and lenders to offer loan modification to delinquent homeowners. This gives these homeowners a chance to avert foreclosures before they could be served.

According to the data released by Foreclosure Radar, as early as September, the number of notices of default has decreased by as much as 61.8 percent and the number of homes put up for sale by auction also dropped by 47.3%. In actual figures, this is equivalent to 16,352 notices of default in September which is significantly lower than Augusts’ 42,790 filings.

These dropping figures continued to the next month. Data for October showed that California foreclosure rate is lower by 18 percent compared to that of September. The public and the state government are hopeful that this decrease will continue until the next year.

This drop in foreclosure rate can be directly attributed in the enforcement of the new law. Although loan modification has been around for years, few homeowners are even aware of this option. This California law brought widespread awareness to the homeowners.

Though this law and loan modification does not guarantee to be a “cure-all” solution to the current mortgage crisis, it is certainly an alternative to be considered. If the drop in foreclosure rates in California continues, then this can serve as a national model that can be followed by other states or even other countries. This could also mean that loan modification is a superior option in stopping foreclosure.