After rising for four years in a row, the number of foreclosures in Lancaster County fell last year — dramatically.

According to courthouse records, 765 foreclosures were filed here in 2011 — a 43 percent drop from the 1,334 foreclosures recorded in 2010.

It's the lowest number of foreclosures recorded here since 2000 — but the numbers may not stay this low.

Attorneys, Realtors and others who handle foreclosures speculate that the drop — which matched a national decline in foreclosures — can be attributed to several factors. Those include a growing reluctance among banks to seize houses; faulty documentation and other problems in the foreclosure process that caused some banks to pause; and a growing number of buyers who are seeking loan modifications.

Some also think the drop-off in foreclosures reflects the fact that Lancaster County's economy, and housing market, remains stronger than most.

"The tagline that 'All real estate is local' is actually true," said Jason Burkholder, a Realtor with Weichert, Realtors-Engle & Hambright in Lancaster. "In Lancaster County our economy suffered somewhat, but we're not like one of the 'sand states' [like Nevada] where foreclosures are still going up."

RealtyTrac, an online marketplace that tracks foreclosed properties, last week said that nationally, banks repossessed 25 percent fewer properties in 2011 compared to 2010.

But Darren Blomquist, RealtyTrac's director of marketing communications, attributed this to "foreclosure processing delays" rather than a recovering housing market.

Analysts are predicting that foreclosures nationwide will rise again in 2012 as those "delays" are overcome.

And there's some indication that this may already be happening. The number of foreclosures in Lancaster County in December spiked to 110 — by far, the highest single-month total of the year (February's 79 foreclosures was second).

The county averaged 63.8 foreclosures per month in 2011 — down from 111.2 per month in 2010.

Mitchell Sommers, an Ephrata attorney who handles foreclosures, said he'd noticed the decline, but "the amount really surprises me."

In part, he believes the drop "is a Lancaster County thing." Homeowners here, he believes, are less likely to walk away from "underwater" properties, amd are more likely to attempt a short sale or loan modification.

Short sales — transaction in which the seller's mortgage lender agrees to accept a payoff of less than the balance due on the loan — have risen significantly here. Conducting a search of the Multiple Listing Service, Realtor Burkholder said that as of late December, there were 3,122 active listings in the county — and 228 of them, 7.3 percent, were short sales.

According to newspaper records, there were 100 short sales in Lancaster County in 2010, 62 in 2009.

"In the past years, lenders simply weren't equipped to handle short sales effectively and so they foreclosed, but as they took greater losses nationwide, most larger lenders found they were forced to pursue short sales to reduce their losses," Burkholder said.

He said short sales are "better for the community" than foreclosures because "sellers are able to sell homes to buyers with less damage to their credit and with less of a negative effect on surrounding homes' values. Buyers get great deals and lenders are able to reduce their losses as much as possible."

Others who don't want to sell are entering into the loan modification process, said attorney Sommers — a long, "tortuous" process.

"But it's precisely due to the fact that it is so long, and due to the fact that more banks are holding off while those modifications are proceeding ... that it's having the effect of driving foreclosure rates down," Sommers said.

Nationwide, many lenders also backed off foreclosures in the past year after courts, lawmakers and state attorneys general investigated whether banks or mortgage servicers violated laws by failing to follow proper foreclosure procedures.

"Those foreclosure processing delays mean much of the foreclosure activity that under normal circumstances would have occurred in 2011 is being deferred to 2012," RealtyTrac's Blomquist told TheStreet.com. "This new wave will not bring foreclosure numbers back to the levels we saw in 2010, but they will create a sort of double-peak pattern after the artificial trough in 2011."

The number of foreclosures in Lancaster County rose steadily between 1999 and 2003, held steady through 2007 — and then began to take off.

In 2007, 885 foreclosures were recorded here, an average of 73.8 per month. In 2008 the number rose to 1,100, 91.7 per month; in 2009, 1,319 averaging 109.9 per month; and peaking in 2010.

Still, according to RealtyTrac, Lancaster County's foreclosure rate remains significantly below both the state and national rates. In November, according to RealtyTrac, one of every 579 homes in the nation received a foreclosure notice. Statewide, it was one in every 1,577 homes. In Lancaster County, it was one in every 4,365 homes.

Stephen Trapnell is corporate communications manager for Susquehanna Bancshares Inc., parent of Susquehanna Bank — which foreclosed on more homes here in 2011 than 2010. Trapnell said "this is likely just due to normal monthly fluctuations rather than a trend."

"Lancaster County's housing market does seem more stable than many areas of the country," Trapnell said. "It didn't see the same level of over-inflated rise in prices from the housing bubble, and so the impact of that bubble collapsing wasn't quite as severe. Also, we found that many local homeowners stuck with predictable fixed-rate mortgages, as opposed to more exotic loan products where payments could adjust upward dramatically."

Local banks do few foreclosures. According to courthouse records, Susquehanna Bank did 18 foreclosures in 2011. Wells Fargo, by contrast did 246.

Despite the relative health of the local economy and housing market, the number of homeowners seeking help to avoid foreclosure hasn't abated here, said Lowell Jantzi, division manager of financial and homeownership services for Tabor Community Services.

"We're still getting a lot of phone calls," Jantzi said. "The number may have decreased slightly, but not to the extent foreclosures have."

At the same time, he said, funding for counseling programs has been cut dramatically. "The HEMAP [Homeowners Emergency Mortgage Program] was cut in this year's budget," Jantzi said. The program, run by the Pennsylvania Housing Finance Agency, saw its funding fall from $10 million to $2 million.

Federal programs have also been trimmed, Jantzi said. "There's really not assistance available for homeowners at the moment," he said.

"But the demand still seems to be there."

Gil Smart is associate editor of the Sunday News. Email him at gsmart@lnpnews.com, or phone 291-8817.