The foreclosure plague seems to have reached its peak and started to fade, but the recovery is still fragile.

The number of foreclosure filings of all types — including notices of delinquency, auction notices and repossessions — fell during the first six months of 2010, according to RealtyTrac, the online marketer of foreclosed properties.

There were 1,654,634 properties with foreclosure filings, a 5% decline compared with the previous six months. That equates to 1 out of every 78 homes being at risk.

Unfortunately, the pace of bank repossessions quickened, with nearly 270,000 homes lost to foreclosure during April, May and June, a 5% increase over the three winter months.

James Saccacio, CEO of RealtyTrac, called the report a “tale of two trends.”

He pointed out that the filings data showed improvement because fewer properties were entering the foreclosure process. Part of that is because lenders are now more committed to modifying defaulting mortgages or allowing homeowners to sell their homes for less than they owe.

At the same time, lenders have cleared many properties out of the foreclosure pipeline, finalizing repossession proceedings rather than allowing homes to sit in limbo.

However, there is still much inventory to move through the system and experts aren’t sure how bad it will be.

“While the foreclosure problem is being managed on the surface,” Saccacio said, “a massive number of distressed properties and underwater loans continue to sit just below the surface, threatening the fragile stability of the housing market.”

Hardest hit states

As they have for many months now, the “sand states” led the nation in foreclosures during the first half of the year. One in 17 Nevada households, or 64,429, received a filing. That is the highest rate of any state.

The number of California homes with filings came to more than 340,000, the highest total of any state.

Florida had more than 277,000 filings, or 1 for every 32 households; Arizona had more than 91,000, 1 in 30 homes.

Lenders repossessed 45,000 Calif. homes during the three months ended June 30, more than in any other state. Nevada, with a much smaller population, had nearly 11,000 repossessions, about twice the rate of the Golden State.

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