Foreclosures in Massachusetts fell sharply in August even as lenders launched more foreclosure proceedings against delinquent homeowners, according to a Boston firm that tracks local real estate activity.
Foreclosures declined nearly 35 percent from a year earlier, Warren Group reported, but initial proceedings, known as foreclosure petitions, soared by more than 150 percent from August 2008. The year-over-year increase was elevated by a change in state law last May that forced lenders to delay initial proceedings, and kept the number of them artificially low in subsequent months, said Timothy Warren, the firm’s chief executive.
The mixed data suggest a housing market and economy that are improving, but remain weak and vulnerable to reversals.
“Foreclosures are down, and that’s very positive, but until unemployment starts heading in the other direction, we’re going to see more people entering the foreclosure process,’’ said Warren. “We’re not out of woods yet.’’
A large share of foreclosure proceedings are resolved before the lender takes the property. Homeowners often pay delinquencies, renegotiate payments, or sell. Last year, for example, more than 21,000 foreclosures were initiated. About 12,000 were completed.
State and federal governments have launched programs to help homeowners avoid foreclosure. Yesterday, Secretary of Housing and Urban Development Shaun Donovan said the federal government is on target to modify mortgages to help about 500,000 struggling homeowners to keep their homes.
Meanwhile, the local economy and housing market have shown signs of stabilizing. The Massachusetts unemployment rate rose above 9 percent last month, but total job losses slowed to just 400. Home prices in Greater Boston have risen over three consecutive months, according to the S&P/Case-Shiller index, considered by analysts as the best gauge of home prices. Single-family home sales jumped 12 percent in July, as compared to a year earlier, according to Warren Group.
The pace of foreclosures has slowed, too, declining on a year-over-year basis for seven consecutive months, according to Warren Group. Foreclosures in the first eight months of the year are down more than 30 percent from the same period in 2008.
Foreclosure auctions also declined last month, falling 22 percent from a year ago. Through August this year, auctions were also down 22 percent compared to the first eight months of 2008.
Robert Gavin can be reached at rgavin@globe.com. 
