NEW YORK - U.S. home foreclosures actions spiked in March and set a quarterly record despite federal programs to combat the unrelenting pace that homeowners are defaulting on mortgages, RealtyTrac said on Thursday.

The government aid, intensified in late March, has so far failed to overcome the staggering effects of nearly double-digit unemployment and wage cuts on borrowers.

Foreclosure activity jumped 19 percent to a monthly record in March, driving first-quarter actions up 7 percent from the prior quarter and 16 percent from a year ago to a record of more than 932,000 properties.

One in every 138 U.S. households got a foreclosure filing in the quarter such as a notice of default, auction or bank repossession.

Banks took back more than 257,000 properties in the quarter, a record high, putting repossessions on pace to shatter last year's record of more than 918,000 properties.

If there's going to be a modification program that really has a material effect this year, it's not there yet, Rick Sharga, senior vice president at RealtyTrac, told Reuters. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ See related graphic at ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Government and lender efforts to alter loan terms for borrowers at risk of losing their homes have resulted in more temporary than permanent fixes, delaying the inevitable.

Foreclosure auctions were scheduled for the first time on nearly 370,000 properties in the first three months of 2010, a quarterly record, up 21 percent from the same time last year.

As lenders go through these modification program options and short sale options and decide that loans don't qualify for either, they're going to start processing more of these into foreclosure and putting them back on the market, Sharga said.

The most likely scenario is that we will be working through this inventory of distressed property well into 2013, he added.

More than 3 million U.S. households are likely to get a foreclosure notice this year, topping last year's record 2.8 million, RealtyTrac forecasts.

The government last month dedicated $14 billion to its efforts to tackle under water mortgages and high unemployment that propel more borrowers to default on their largest asset. To see related factbox, click on [ID:nN26146440].

Principal reduction is one element of the enhanced program, which many housing experts contend needs to go even further to really make a dent in the foreclosure crisis.

A congressional watchdog said Wednesday that re-default is the bane of the Obama administration's $75 billion Home Affordable Modification Program, with billions of dollars spent to delay rather than prevent foreclosures. Read story at [ID:nN14195527].

Notice of default, the first stage of the foreclosure process, rose 1 percent in the first quarter from the prior quarter, flattening at an elevated level.

The burdensome supply of unsold homes, inflated by foreclosures, is widely seen being placed back on the market by banks in a managed way to avert a new freefall in prices.

Home prices have lost about 30 percent, on average, from 2006 peaks.

But the logjam of house to be sold also means that we won't see much in the way of real recovery in pricing until we get through all of this, said Sharga.

Nevada posted the highest foreclosure rate among states for the 14th straight quarter, with one in every 33 housing units getting a filing.

Arizona was in second place for the third straight quarter, followed by Florida and California. In each of these states, massive overbuilding and speculative investment during the housing boom resulted in the deepest losses during the bust.

Unemployment helped drive up foreclosure activity in Utah by 75 percent from the first quarter of 2009, the highest annual increase among states with top-10 foreclosure rates, to put it in fifth place.

Michigan, Georgia, Idaho, Illinois and Colorado were the other states with the highest foreclosure rates.

Foreclosure activity in 10 states accounted for more than 70 percent of the total actions in the first quarter, RealtyTrac said.

California alone accounted for 23 percent of it, followed by Florida, Arizona, Illinois and Michigan. Georgia, Texas, Nevada, Ohio and Colorado were the other states with the highest number of foreclosure actions.

(Editing by Chizu Nomiyama)