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FILE - In this May 28, 2009 file photo, a foreclosed home is shown in Mountain View, Calif. Lenders are ramping up efforts to avoid home foreclosures, but a report by bank regulators said Wednesday, Sept. 30, 2009, more than half of borrowers who get help fall behind again. (AP Photo/Paul Sakuma, file)

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More homeowners in the Bay Area received a notice of foreclosure — the first step in the foreclosure process — in September compared with a year ago while at the same time the number of foreclosed homes that became bank-owned properties declined.

Last month, 3,916 homeowners received notices of default, a 116.4 percent increase from a year ago, but 2,484 foreclosed homes became bank-owned properties, a 41.6 percent decrease from a year ago.

The slowdown in banks taking back homes after homeowners fail to bring payments up to date is likely the result of loan modification programs that are in place, said Daren Blomquist, marketing and communications manager for www.realtytrac.com, which released to the report today.

"All of that did have the effect of somewhat bringing down the (bank-owned properties) as lenders tried to figure out if (borrowers) qualified for any foreclosure prevention programs," he said.

The Obama administration's loan modification program, which rolled out in March, has helped about 500,000 homeowners lower their home loan payments, federal officials announced last week.

But while the number of people losing their homes to banks is down from a year ago, there was an 8.5 percent increase from the second to third quarter in bank-owned properties, said Blomquist. In the three-month period ending in September, 4,260 Bay Area homes became bank-owned properties, compared with 3,927 in

That quarter-to-quarter increase is linked to the foreclosure process working its way through earlier loan modification and foreclosure moratoriums aimed at keeping people in their homes, Blomquist said.

"There is still pent-up foreclosure activity that needs to work through. So we would expect (bank-owned) numbers to continue to ramp up as lenders work through more of the loans and figure out if they qualify for a loan modification or not,'' he said.

The RealtyTrac report defines the Bay Area as Alameda, Contra Costa, Marin, San Francisco and San Mateo counties.

Last month in the Bay Area, 3,107 homes, or 107 percent more than a year ago, entered the notice-of-trustee sale stage. That stage clears the way for a foreclosed home to be sold at an auction, either to a third-party or to the bank. In most cases, such homes end up becoming bank-owned properties.

Notice of trustee sales in the Bay Area stood at 7,937 in the third quarter, or a 22.5 percent increase from the second quarter. However, notices of default stood at 10,679 in the third quarter, a 3.4 percent decrease from the second quarter.