The effect of new legislation in California may have slowed, but didn't altogether stop, a growing number of troubled borrowers nationally from defaulting on their mortgages or losing their homes to foreclosure during October. Foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 279,561 U.S. properties during the month, a 5 percent increase from the previous month and a 25 percent increase from Oct. 2007, according to data released Thursday morning by foreclosure listings provider RealtyTrac. While still up both month-to-month and compared to last year, the rise in foreclosures was muted by local legislation in California. The state's newly-enacted law, SB 1137, adds 45 days to the borrower notice period for new borrower defaults, and has helped new foreclosure filings fall dramatically in the state, and nationwide, given the state's prominence in overall housing statistics. “We’ve seen sharp declines in new foreclosure filings after legislation mandating delays to the foreclosure process was signed into law in several states — most notably in California, where overall foreclosure activity was down by double-digit percentage points for the second straight month in October, and where default filings were 44 percent below October 2007 levels,” said James J. Saccacio, chief executive officer of RealtyTrac. “Despite this, October marks the 34th consecutive month where U.S. foreclosure activity has increased compared to the prior year. “While the intention behind this legislation — to prevent more foreclosures — is admirable, without a more integrated approach that includes significant loan modifications, the net effect may be merely delaying inevitable foreclosures. And in the meantime, the apparent slowing of foreclosure activity understates the severity of the foreclosure problem in these states.” Underscoring how local legislation enacting what is essentially an involuntary moratorium on foreclosure activity tends to only temporarily stall foreclosures, initial foreclosure filings in Massachusetts soared 465 percent between August to September after being much lower than normal in June, July and August. That temporary lull happened after a new law took effect in May requiring lenders to give homeowners a 90-day right to cure notice before initiating foreclosure. More delays in foreclosures may be coming in the Golden State, as well; California governor Arnold Schwarzenegger announced last week that he will look to implement a 90-day moratorium on foreclosures. California stays in pole position, anyway California foreclosure activity in October decreased 18 percent from the previous month, but the state still posted the highest number of properties with foreclosure filings for the month — 56,954. That total was down from a peak of more than 100,000 in August, but was still up 13 percent from Oct. 2007, RealtyTrac said. Florida, Arizona and Nevada posted the second, third and fourth highest number of properties with foreclosure filings respectively in October. With 12,681 properties receiving a foreclosure filing in October, Illinois registered the nation’s fifth highest state total. The state’s foreclosure activity increased 24 percent from the previous month, and was up 31 percent from year-ago levels, as well. Sin City tops metro foreclosure rates While California posted the most foreclosures in terms of raw numbers, Las Vegas documented the highest metropolitan foreclosure rate among the 230 metro areas tracked in the report, with one in every 62 housing units receiving a foreclosure filing in October — more than seven times the national average. Foreclosure filings were reported on 12,155 Las Vegas area properties during the month, an increase of nearly 6 percent from the previous month and up nearly 104 percent from October of 2007. Four Florida metro areas posted foreclosure rates that ranked among the top 10 in October, led by Cape Coral-Fort Myers and Miami in the Nos. 2 and 3 spots respectively. Other Florida cities in the top 10 were Fort Lauderdale at No. 8 and Orlando at No. 10. California metro areas also accounted for four of the top 10 metro foreclosure rates in October, but that was down from previous months, when at least six California metro areas consistently ranked among the top 10. Stockton was the highest ranked California metro area at No. 4, with one in every 100 housing units receiving a foreclosure filing in October. Other California cities in the top 10 were Merced at No. 5, Riverside-San Bernardino at No. 7 and Modesto at No. 9. All four California metro areas experienced monthly decreases in foreclosure activity, thanks to the state-wide legislation. Write to Paul Jackson at