Foreclosure filings declined in California and the Bay Area in the fourth quarter of 2011 as the housing market improved and lenders evolved their policies for home repossessions, according to a report released Tuesday by DataQuick, a real estate service in San Diego.

“We are certainly seeing a lower level of foreclosure activity than a year or two ago,” said DataQuick President John Walsh. “The question is, how much of that decline is due to market conditions, and how much is due to policy changes that try to address economic distress?”

In the Bay Area, lenders filed 10,012 notices of default, the formal first step in the foreclosure process, in the final three months of the year, DataQuick said. That was down 16.6 percent from the same time in 2010. Statewide, 61,517 notices of default were filed, down 11.9 percent from the previous year.

The trend carried through to trustee’s deeds, the final step in the foreclosure process. In the Bay Area, a total of 4,831 trustee’s deeds were recorded in the fourth quarter, a 16.2 percent decline from 2010. In California, 31,260 trustee’s deeds were filed, an 11.8 percent decline.

The numbers are still high by historic standards, but are down compared with the rise in foreclosures four years ago.

As the housing market finds its footing and the economy adds jobs, the number of homeowners forced into foreclosure tends to drop.

“Once prices stabilize or start going up a little, fewer people get pushed into the distressed arena because there is a better chance that they will be able to refinance or sell the house and clear their loan,” said Andrew Le-Page, a DataQuick analyst. “Or they decide to fight to hang on. If prices were still going down, they might decide to throw in the towel.”

Lenders, which have come under ferocious criticism for not being more responsive to struggling homeowners, also have altered the way they handle late payments. Some of those changes stemmed from the 2010 robo-signing scandal that uncovered sloppy foreclosure paperwork.

“Five years ago, almost all mortgage payment delinquencies would have triggered a default notice after a certain amount of time,” Walsh said. “Strategies now include short sales, refinances, interest rate changes, principal reduction, as well as just plain waiting longer. It will be interesting to see how this plays out as the economy improves and the housing market finds its footing.”

Much of the housing distress remains concentrated in lower-cost inland areas where overbuilding was rampant during the housing boom. San Francisco, San Mateo and Marin remain the three California counties where mortgages are least likely to go into default, DataQuick said.

Across the Bay Area, there were 5.7 notices of default for every 1,000 homes in the fourth quarter. That concentration ranges from a low of 2.9 notices of default per 1,000 homes in San Francisco to a high of 10.7 such notices per 1,000 homes in Solano County. Statewide, the average was 7 notices of default per 1,000 homes.

For trustee’s deeds, the Bay Area had 2.7 per 1,000 homes, ranging from 1.2 per 1,000 homes in San Francisco to 6 in Solano. Statewide, there were 3.7 trustee’s deeds per 1,000 homes.

“We’ve worked through the worst of it,” LePage said.

E-mail Carolyn Said at csaid@sfchronicle.com.