Foreclosure activity fell in 14 of the top 20 U.S. metropolitan areas in the first quarter compared with a year earlier, even though total U.S. foreclosures rose, RealtyTrac said on Thursday.

The declines in some big metro areas, however, reflected government efforts to stem foreclosures and did not indicate that the tide of foreclosures has turned, RealtyTrac said.

The Sun Belt continued to lead in foreclosures, with four Sun Belt states accounting for all of the 20 metropolitan areas with the highest rates in the first quarter, the real estate data company said.

But the majority of those top metro areas, with populations over 200,000, reported decreasing foreclosure activity compared with the first quarter of 2009, RealtyTrac, based in Irvine, California, said.

California accounted for 10 out of the top 20 metro foreclosure rates, followed by Florida with seven, Nevada with two, and Arizona with one, RealtyTrac said in a quarterly report.

Foreclosure activity declined on a year-over-year basis in eight of 10 biggest metro areas.

The decreasing foreclosure activity in some of the nation's top foreclosure hot spots in the first quarter is largely the result of government intervention and other non-market influences, and not a sure signal that those areas are out of the woods yet when it comes to foreclosures, James J. Saccacio, chief executive of RealtyTrac, said in a statement.

He said a federal government program designed to encourage short sales, which was launched April 5, may have caused delays in the initiation of some foreclosures. In a short sale, a lender agrees to accept a sales price that is less than the amount owed on a mortgage.

RealtyTrac said 77 percent of large U.S. metropolitan areas posted year-over-year increases in foreclosure activity. Foreclosure activity nationwide increased 16 percent from the first quarter of 2009.

Las Vegas continued to post the highest foreclosure rate in the first quarter, with one in 28 housing units receiving a foreclosure filing, or 3.51 percent, 4.9 times the national average.

A total of 28,480 Las Vegas housing units received a foreclosure filing during the quarter, up nearly 13 percent from the previous quarter but down 19 percent from the first quarter of 2009.

Foreclosure activity also spread beyond the Sun Belt, with unemployment quite possibly the biggest driving factor.

Foreclosures are by far one of the biggest threats to the U.S. housing market. Improvement in the housing market bodes well for the U.S. economy, as it points to better demand in the sector where the first signs of the latest recession took root.

(Editing by Leslie Adler)

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