The West Coast states of Oregon and California experienced the largest annual drops in unlisted foreclosures in the first quarter, according to RealtyTrac.

Could the steep declines be attributed to the California Homeowner Bill of Rights and new foreclosure laws in Oregon?

RealtyTrac executives, and foreclosure attorneys, previously suggested default activity could shift in those two states with new state laws creating more legal liabilities for foreclosing parties.

Daren Blomquist with RealtyTrac has conceded in the past that new foreclosure laws – including mandatory mediation in Oregon and a new private right of action for foreclosure plaintiffs in California – could eventually slow foreclosures as financial firms rethink their strategies in those states.

Oregon also is waiting for the state Supreme Court to rule on a precedential Mortgage Electronic Registration Systems case that could impact foreclosure filings.

The latest first-quarter numbers from RealtyTrac definitely show similar trends in both states.

Annually the number of unlisted foreclosures – or distressed properties not yet up for sale – declined 50% in Oregon and 31% in California. This means fewer foreclosures are waiting in the wings in those states, a deep drop from a year ago.

Generally the number of unlisted foreclosures is falling more dramatically in nonjudicial foreclosure states, which California technically is.

But compare California to Texas and Arizona — both nonjudicial foreclosure states — and the drops in the West Coast states seem much more extreme. Texas and Arizona experienced lighter 15% to 11% annual drops in unlisted foreclosures year-over-year, respectively.  

The national situation shows the inventory of listed homes in some stage of foreclosure or bank-owned declined 43% annually in the first quarter. And this is occurring at a time of an inventory shortage.

But that decline only accounts for listed foreclosure inventory. Shadow inventory, or unlisted foreclosures still in some stage of the default process, actually increased 12% year-over-year nationwide, RealtyTrac says.

RealtyTrac believes this could be good news for states starving for inventory.

"Many of these properties will be listed for sale as short sales in the next six to 12 months, or go through the foreclosure process and eventually be listed for sale as bank owned in the next 12 to 18 months," the data agency said.

"Some of the biggest increases in unlisted foreclosure inventory were in New York, Florida, New Jersey, Washington and Illinois."

But in California and Oregon, unlisted foreclosures – or the shadow inventory is on the decline – which may suggest on the back-end, the system is readjusting itself in a manner that is specific to those two states.