The number of foreclosures started by lenders in Massachusetts during the month of September declined from a year earlier, according to a new report by The Warren Group, publisher of Banker & Tradesman. The September number was also lower than the total foreclosures recorded in August.

In September, lenders filed 2,358 petitions to foreclose – which marks the first step in the foreclosure process in Massachusetts – a 6.7 percent drop from 2,527 a year earlier. Foreclosure petitions in September also dropped about 20 percent from 2,961 in August. Foreclosure petitions have exceeded 2,000 since February. A total of 20,964 foreclosure petitions have been filed so far this year statewide, down 3.1 percent from 21,635 during the same period in 2009.

In the third quarter, foreclosure petitions dropped to 7,626, down 2.5 percent from 7,822 petitions initiated during the same period last year. This is the largest amount of petitions to foreclose recorded during a quarter this year; there were 6,577 and 6,761 in the first and second quarters, respectively.

"We saw more moderate activity in September, with petitions declining by almost 7 percent from one year ago and down 23 percent from the preceding month of August. Earlier this year, petitions were rising at a dramatic clip, including months when the increases were 80 percent to 121 percent," said The Warren Group CEO Timothy M. Warren Jr.

He added: "We will have to wait until the October statistics are tabulated to see the impact from Bank of America’s decision to halt foreclosures in Massachusetts, pending a review of its paperwork and procedures. From what we can see at the present time, Bank of America is involved in about 2,000 pending foreclosure cases in the Bay State."

Meanwhile, the number of completed foreclosures increased for the ninth straight month in September. A total of 890 foreclosure deeds were recorded, a 26.6 percent jump from 703 in September 2009. Foreclosure deeds dropped from August’s 1,207 foreclosures. This is the first month since February when foreclosure deeds fell below 1,000. Year-to-date foreclosure deeds rose more than 58 percent to 10,777, up from 6,796 a year earlier.

Foreclosure deeds in Massachusetts also spiked in the third quarter. A total of 3,344 homes were seized to foreclosure, up from 2,054 in the third quarter 2009. However, this is the fewest number of foreclosures recorded during any quarter this year. There were 3,449 and 3,984 deeds recorded during the first and second quarters, respectively.

"Although foreclosure deeds increased from a year ago, this is the lowest level we’ve seen so far this year. If fewer people are losing their homes to foreclosure that bodes well for the housing market as a whole," Warren said.

The number of auction announcements tracked by The Warren Group increased for the second straight month in September. Auction announcements jumped 12.4 percent to 2,111, compared to 1,878 in September 2009. A total of 22,567 auction notices were tracked by The Warren Group this year, up more than 77 percent from 12,681 auctions announced during the same period last year.