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An apparent decline in California's pre-foreclosure activity ... something seen even in Kern ... could be an illusion, one foreclosure firm reports.

Bank of America's takeover of Countrywide could have created July's drop in default notices, ForeclosureRadar says.

That's because Countrywide loans accounted for more than 90 percent of Cali's defaults recorded since April, the firm says. July's drop in default notices could simply be due to administrative and procedural delays from the merger, a ForeclosureRadar analayst says.

In Kern, default notices peaked in April. Here are numbers from the Kern County Recorder's office for 2008:

July: 1,227

June: 1,259

May: 1,272

April: 1,303

March: 1,259

February: 1,177

January: 1,175

That's 8,672 default notices so far in 2008.

Default notices are the first step in possible foreclosure. A borrower has about 3 months to correct a defaulted loan before the lender can schedule the property for public auction. The auction notice allows at least another 3 weeks to right the loan before repossession.

Separately, folks are talking about "shadow inventory," (a nod to BakersfieldBubble for pointing this out) or the backlog of foreclosed homes that haven't yet hit the resale market. That inventory alone could drag down values and stifle demand for new construction for a good chunk of time.

In Kern, the pace of foreclosures has hit record levels in 2008, county filings show. Since January, 4,956 Kern properties have foreclosed.

Appraiser Gary Crabtree's preliminary market report for Bakersfield home sales in July showed almost 70 percent of the 484 sales were "distressed" listings ... homes already foreclosed or "short" sales made to avoid foreclosures.

— Gretchen Wenner, staff writer