A recent surge in foreclosure cancellations may be attributed to a specific provision in California’s Homeowner Bill of Rights. According to a recent report by ForeclosureRadar, foreclosure cancellations in California spiked 62.1% from September to October and 36.7% over a one-year period. This increase in cancellations between September and October is the largest monthly jump since ForeclosureRadar began tracking foreclosures in September 2006.

They say the increase may be the result of a ban on dual-tracking. The Homeowner Bill of Rights doesn’t actually go into effect until next year, but ForeclosureRadar says that some lenders appear to have already started to the process of canceling foreclosures that fall into the dual-tracking category.

Sean O’Toole, founder and CEO of ForeclosureRadar, adds, “The California Homeowner Bill of Rights that takes effect in January 2013 is beginning to impact foreclosure trends. This is another example of where changes in foreclosure trends are driven by government intervention, and not necessarily economic recovery.” According to O’Toole, the elimination of dual-tracking may help avoid some unnecessary foreclosures. He does believe it will lengthen the process though and ultimately delay the recovery.

Foreclosures continue to decline around the western states, with fewer California properties entering the foreclosure process. In October, foreclosure starts fell 8% month-over-month. Arizona and Washington also saw monthly declines in foreclosure starts during the same period, with foreclosures falling 15% and 4.1% respectively.

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