Efforts by federal and state lawmakers to slow down the foreclosure process or make loan modification a more likely option for homeowners also are having an impact.Lenders also appear to be more amenable to short sales, when the bank agrees to accept less than what the homeowner owes on their mortgage, as a way to avoid foreclosing upon a borrower. In February, the mortgage industry agreed to pay $25 billion to settle allegations that many banks and mortgage servicers processed foreclosures without verifying documents. Another instrumental factor in the sharp slowdown in foreclosure activity: The pipeline of risky home loans made before 2008 is shrinking. Loans issued since then, after banks tightened lending standards, are less likely to go unpaid. "We're past the bulk of the high-risk loans that were most susceptible to foreclosure," Blomquist said. Even so, there are signs at the state level that more homes could end up in foreclosure in coming months. The trend is most evident in states such as New York, Florida and New Jersey. In those states, the courts play a role in the foreclosure process, prolonging the time it's taking lenders to tackle their backlog of foreclosure cases. Fourteen states saw an annual increase in foreclosure activity, which RealtyTrac measures as the number of homes receiving a default notice, scheduled for auction or repossessed by the bank. Of those, only two â¿¿ North Carolina and Washington State â¿¿ are not states where the courts are involved in foreclosures. Foreclosure moratoriums in New York, New Jersey and Connecticut in the aftermath of Sandy last month means it will take longer for lenders complete pending foreclosures, Blomquist said. All told, 89,209 homes entered the foreclosure process in October, up 2 percent from September, but down 19 percent from October last year, RealtyTrac said. Lenders repossessed 53,478 homes last month, a drop of less than 1 percent from the previous month, down 21 percent from October 2011. Home repossessions have declined on a monthly basis the past 24 months.