Property foreclosure activity in Hawaii declined 2 percent last month, but the small improvement appears to be part of a nationwide artificial reduction tied to difficulties of lenders processing cases.

There were 953 Hawaii foreclosure actions in February, compared with 972 in the same month last year, according to data from real estate research firm RealtyTrac.

February was the third consecutive month of lower year-over-year foreclosure filings in the state, and the number of filings compares with a peak of 1,629 in August. But local foreclosure attorneys and housing advocates do not believe the wave of homeowners on the verge of losing their homes is receding.

That’s because several big banks have frozen foreclosure proceedings over the past several months to clear up questionable case documentation and processing issues that have been challenged by some borrowers in court.

Nationally, the number of foreclosure actions in February plummeted 27 percent from a year earlier. That was the biggest decline since RealtyTrac began issuing foreclosure reports in 2005, and put the number of filings in February at 225,101, or the lowest level for any month in three years.

James Saccacio, chief executive officer of California-based RealtyTrac, said in a statement that February foreclosure activity was affected by a short month that had some significant bad weather. But the main reason for the slowdown in filings was the reaction to allegations of improper processing by some lending giants including Bank of America, JPMorgan Chase and GMAC Mortgage, he said.

"The bottom line is that the industry is in the midst of a major overhaul that has severely restricted its capacity to process foreclosures," Saccacio said. "We expect to see the (foreclosure) numbers bounce back, but that will likely take several months."

By state, Nevada had the worst foreclosure rate at one foreclosure for every 119 households, or 9,553 foreclosure filings total. Vermont had the best rate at one filing per 62,849 households, or just five foreclosure filings.

Hawaii’s rate was one filing per 541 households, which was 10th worst nationally. Hawaii has been at or close to the 10th worst spot for several months.

By county, Honolulu had the lowest rate of foreclosure filings last month at one for every 825 households, though filing volume was the most at 410.

The Big Island had the worst foreclosure rate at one filing per 270 households, or 299 filings in all.

Maui County — comprising Maui, Molokai and Lanai — had a rate of one filing per 362 households, or 184 filings total.

There were 60 foreclosure filings on Kauai, or one per 502 households.

Statewide, most Hawaii foreclosure filings were auction notices, with 543 such filings. Another 329 filings were lender repossessions that end the foreclosure process, and 84 filings were default notices that typically begin the foreclosure process.

RealtyTrac doesn’t count multiple notices on the same property in the same month, but does count different types of filings in different months, which can give a somewhat inflated view of the number of properties facing foreclosure.

RealtyTrac also doesn’t exclude commercial property from its count, which means popular vacation property in Hawaii such as time shares and condominium-hotel units can be among RealtyTrac’s tally.