The number of foreclosures in Lancaster County is up 5 percent for the first seven months of the year — but the pace may be slowing.

According to figures from the Lancaster County Prothonotary's office, 816 foreclosures were filed here from January to July, up from 779 during the first seven months of 2009.

That's an average of 116.6 foreclosures per month so far this year.

But the figure for each of the past three months has been below this. In May, 82 foreclosures were filed in the county courthouse — the lowest monthly total since November 2008. In June, 112 foreclosures were filed; in July, 110.

Still, the foreclosure rate here remains significantly higher than it was just a few years ago. The average number of foreclosures per month has risen from 73.8 in 2007 to 91.7 in 2008, to 109.9 last year.

Dr. Antonio Callari, a professor of economics at Franklin & Marshall College and director of the F&M Local Economy Center, said the reason for foreclosures now may also be different.

"They are now more driven by the sorry state of the economy [unemployment, and especially the long-term nature of it] than by the collapse of the real estate market," said Callari in an e-mail.

"If so, the latest news about the relatively large drop in personal income in Lancaster certainly creates an expectation that we will see foreclosures here pick up the pace from the level they reached as a result of the real estate crash," he said.

Recently, the Intelligencer Journal/Lancaster New Era reported that personal income here dropped 2 percent in 2009, the largest single-year decrease among Pennsylvania's 14 metropolitan areas — the first decline here in at least 40 years.

"The crash itself didn't hurt this area as much as other areas, so real estate held its own here relatively well through the first quarter of 2010," Callari said. "But, with the effects of unemployment kicking in now, one has to be concerned about a further weakening of the real estate market here too, and an increase in the pace of foreclosures."

Foreclosures only result in sheriff's sales about one-quarter of the time, as many homeowners are able to work out a deal with the lender before the house goes on the block.

Still, sheriff sales here also are on the rise. In 2009, 361 homes were sold at sheriff's sale, up from 313 in 2008 — a 15 percent increase. In the first four sales of 2010, 221 homes were sold. Two more sales are scheduled this year.

Nationally, RealtyTrac reported last week that foreclosures rose 4 percent in July over the previous month — but, as is the case in Lancaster County, the number is actually down from the July 2009 total.

However, the Associated Press reported that the number of homeowners who have fallen behind on payments is still high, and borrowers are being permitted to remain in their homes longer — in part because lenders are reluctant to add to the glut of foreclosed homes on the market.

Lenders have been overwhelmed by the volume of defaulting properties, the AP reported. RealtyTrac estimates more than 1 million American households are likely to lose their homes to foreclosure this year.

The Obama administration has introduced several programs in an attempt to slow the wave of foreclosures, but these have met with mixed success at best.

Mitch Sommers, an Ephrata attorney who has worked with several clients who have applied to the federal government's Home Affordable Modification Program, or HAMP, said, that at best, the program provides modest relief. At worst, "it's cumbersome, inefficient and so bad it almost had to have been designed that way."

Part of the broader Making Home Affordable Program created by the Financial Stability Act of 2009, HAMP was designed to have borrowers work with lenders to reduce monthly payments. "The way it works is, you get into what's called a trial period where you pay three months at a reduced rate," Sommers said. "That reduction is fairly substantial, but they caution you, this may or may not be what your mortgage is eventually modified to, and we're not even promising you'll get modified at all."

For example, he said, a $1,500 monthly mortgage might be knocked down to $800 for the three-month trial period. "But when you get the final approval, it might be $1,250," he said.

"For some people, that might be enough," he said. "But this isn't a grand slam — it's a bunt single."

And the frustration factor is high. Sommers said he's filled out forms only to have lenders tell him the forms were misplaced or lost: "A month and a half would go by and my secretary would call and get the message, 'We didn't receive any of these things.' Meanwhile we're looking at the fax, looking at the overnight package [receipt] — we sent them," he said. "So they'd say, 'Well, could you send them again?'

"One thing if you're in foreclosure — if you know you're going to walk away from your house, it gives you an opportunity to take the money [that might otherwise be spent on mortgage payments and taxes] and use it to move ... by dragging it all out, these people are spending money they could be otherwise using" to start over.

The Obama administration has announced that the Department of Housing and Urban Development will offer $1 billion in no-interest loans to help homeowners who have lost income to avoid foreclosure.