After tapering off for more than a year, foreclosure activity picked up during the third quarter in California and Sacramento, according to a report released Tuesday.

But it wasn't clear whether the increase meant the housing market is going south again.

Instead, it's more likely that lenders simply sped up the rate at which they issued default notices – the first step in the foreclosure process, said the author of the report, market researcher MDA DataQuick.

The report does suggest, however, that the housing market still has a ways to go in recovering from an epic collapse. The volume of defaults "is still bad in historical context, but it's nowhere near what it was," said DataQuick analyst Andrew LePage.

Beyond that, LePage and others said it's unclear how future foreclosure actions will be affected by state and federal investigations into allegations that some major lenders used flawed methods in processing foreclosures. The third-quarter figures don't take into account the suspension of foreclosures by Bank of America, one of the largest mortgage lenders in the state.

"The next quarter is a total wild card at this point," said Dustin Hobbs, spokesman for the California Mortgage Bankers Association.

In the third quarter, lenders and loan servicers in greater Sacramento issued 8,341 default notices, according to DataQuick. That was up 26 percent from the quarter before, although it was lower than the same period a year ago.

To read the complete article, visit www.sacbee.com.