Foreclosure filings increase at slower rate; banks helping out

— -- Foreclosure filings in August were up 27% compared with the same month a year ago, but that's a significantly slower pace than in previous months, according to data released Friday.

Nationwide, 303,800 homes received at least one foreclosure-related notice in August, up 12% from July, RealtyTrac said. That means one in every 416 U.S. households received a foreclosure filing last month.

August's increase, however, was smaller than the two prior months. June and July both had year-over year increases in foreclosure filings of 50% or more. Still, the total number of foreclosure filings is the highest since RealtyTrac began issuing its report in January 2005.

RealtyTrac monitors default notices, auction sale notices and bank repossessions.

Another report said top banks and savings-and-loans increased their efforts to keep troubled borrowers in their homes in the second quarter.

Lenders modified 112,353 first-lien mortgages, up 56% from the previous quarter. A total 140,155 payment plans were put into effect, up from 136,367, putting the number of changes to help homeowners at 252,508.

The data, issued jointly by the Office of the Comptroller of the Currency and the Office of Thrift Supervision, also show that foreclosures rose to 288,740 in the second quarter from 278,857 in the first quarter. Delinquencies also increased.

"As banks continue to work through this portion of the credit cycle, we are watching closely to ensure they have safe and sound risk management strategies in place," Comptroller John Dugan said.

RealtyTrac said more than 90,893 properties were repossessed by lenders nationwide last month — up from 43,141 in August 2007.

The three states with the highest foreclosure rates were Nevada, California and Arizona, in that order, RealtyTrac said. Florida, Michigan, Georgia, Ohio, Colorado, Illinois and Indiana rounded out the top 10, although Michigan, Georgia, Ohio and Colorado all reported lower rates than a year ago.

Weak sales, sinking home values, tighter home loan lending practices and a slowing economy hamstrung by high fuel prices has left some homeowners with few options to avoid foreclosure. Many can't find buyers or owe more than their home is worth and can't refinance into an affordable loan.