NEW YORK - Mortgage foreclosure filings dropped in January but the decline may prove only temporary as housing-rescue efforts fall short of addressing current drivers, a report released on Thursday showed.

Foreclosures are by far one of the biggest threats to the housing market, which remains highly vulnerable to setbacks and heavily reliant on government intervention. If foreclosures continue dropping it would be one of the strongest signals yet the market is on the path to recovery.

Foreclosure filings -- including mortgage default notices, house auctions and home repossessions by banks -- were reported on 315,716 properties in January, a decrease of nearly 10 percent from December, but up 15 percent from the year-earlier month, real estate data firm RealtyTrac said.

One in every 409 U.S. housing units received a foreclosure filing in January, Irvine, California-based RealtyTrac said in its January 2010 U.S. Foreclosure Market Report.

Furthermore, more than 300,000 properties received foreclosure filings for an 11th straight month, Irvine, California-based RealtyTrac said.

While January's decrease may indicate foreclosure prevention efforts are gaining traction, the data has been volatile in recent months and foreclosures appear poised to rise again.

January foreclosure numbers are exhibiting a pattern very similar to a year ago: a double-digit percentage jump in December foreclosure activity followed by a 10 percent drop in January, James J. Saccacio, chief executive officer of RealtyTrac, said in a statement.

If history repeats itself we will see a surge in the numbers over the next few months as lenders foreclose on delinquent loans where neither the existing loan modification programs or the new short sale and deed-in-lieu of foreclosure alternatives works, he said.

REOs, or real estate-owned properties, activity nationwide was down 5 percent from the previous month but still up 31 percent from January 2009; default notices were down 12 percent from the previous month but up 4 percent from January 2009; and scheduled foreclosure auctions were down 11 percent from the previous month and up 15 percent from January 2009, RealtyTrac said.

High unemployment and wage cuts have hurt the ability of many home owners to pay monthly mortgage payments. Unemployment was 9.7 percent in January, according to the Labor Department.

Many lawmakers, advocacy groups and housing experts say the government's Home Affordable Modification Program, or HAMP, has fallen short because of its failure to adequately address negative equity, or underwater mortgages.

Negative equity has been one of the biggest banes of many homeowners, making many unqualified for home loan refinancing and preventing some from selling their homes. Borrowers in negative equity are more prone to defaults and foreclosures.

SUN BELT STILL HURTING

Despite a year-over-year fall in foreclosure activity of nearly 18 percent, the foreclosure rate in Nevada, once one of the hottest U.S. real estate markets, remained highest among U.S. states for the 37th straight month.

One in every 95 Nevada housing units received a foreclosure filing during the month -- more than four times the national average.

A 4 percent month-over-month increase in foreclosure activity boosted Arizona's foreclosure rate to second highest among the states in January. One in every 129 Arizona housing units received a foreclosure filing during the month.

Foreclosure activity decreased by double-digit percentages from the previous month in both California and Florida, and the two states registered nearly identical foreclosure rates -- one in every 187 housing units receiving a foreclosure filing.

California, the most populous U.S. state, had a foreclosure rate statistically higher by a slim margin and ranked third highest among the states, while Florida's foreclosure rate ranked fourth highest.

Other states with foreclosure rates among the nation's top 10 were Utah, Idaho, Michigan, Illinois, Oregon and Georgia, the report showed.

(Editing by Andrew Hay)

California Mortgage Foreclosures