Foreclosure filings nationwide dropped 27 percent to 681,153 in the first quarter compared to the same time last year, according to online foreclosure marketplace RealtyTrac.

Compared to the fourth quarter 2010, first quarter foreclosure filings nationwide dropped by 15 percent.

For the month of March, nationwide foreclosure filings were down 35 percent to 239,795 from the 367,056 reported for March 2010, according to a RealtyTrac. However, compared to February, foreclosure filings increased by 7 percent.

"The nation’s housing market continued to languish in the first quarter, even as foreclosure activity fell to a three-year low," said James J. Saccacio, RealtyTrac CEO. "Weak demand, declining home prices and the lack of credit availability are weighing heavily on the market, which is still facing the dual threat of a looming shadow inventory of distressed properties and the probability that foreclosure activity will begin to increase again as lenders and servicers gradually work their way through the backlog of thousands of foreclosures that have been delayed due to improperly processed paperwork."