Home foreclosure activity dipped by 9% in April according to the latest data from RealtyTrac. The company collects foreclosure data from across the country and acts as an online marketplace featuring more than 1.5 million properties.

“In April, almost 334,000 U.S. households received a foreclosure notice,” said Rick Sharga, Senior Vice President of RealtyTrac. “This is a 9% drop from the previous month and a 2% drop from a year ago. This is the first time in 51 months where we’ve actually seen the numbers drop compared to the previous year.”

While any drop in foreclosures is positive, Sharga warns the decline should not be seen as a trend.

“You really can’t read too much into a one month drop. We’ve seen monthly drops before, sometimes followed by an incredible spike,” Sharga said, predicting further instability in the marketplace as banks work to manage inventory levels of homes in foreclosure.

“If you like the analogy of a pig and a python where the python is trying to process this pig- the banks are currently trying to clean-up what it is they’ve swallowed a year ago and trying to get all of the properties processed and back into the marketplace but, there’s a much bigger pig yet to be swallowed and that’s the 5 million home loans that are delinquent,” said Sharga.

Many desperate home owners are struggling to hold onto their properties through loan modification but more than half of borrowers in the United States who do so default again with a year.

According to a joint report released this week by the Office of the Comptroller of the Currency and the Office of Thrift Supervision the re-default rate of loans modified in the first quarter of 2009 was 51.5 percent.

Real Estate expert Danny Griffin runs his own company and says loan modifications are often a short term solution for a problem that stems from over-reaching.

“What a loan modification is doing when somebody simply can’t keep up with it is prolonging the inevitable and the inevitable being a short sale or a foreclosure,” said Griffin who believes too many home owners are buying properties they simply can not afford.

“So all those people that are here and maybe they had a loan modification, maybe it took a little bit of the pressure off, however, there’s still downward pressure on salaries and wages. So, it’s not like all of a sudden there was a big bag of money dropped on the door step that makes everything okay,” said Griffin. “It’s still the struggle to even meet the modified loan. So the truth is, the problem emanates from the original decision to purchase something that put them right here.”

RealtyTrac expects record breaking foreclosure figures in the years to come before the market finally stabilizes.

“Last year we saw the number of households receiving a foreclosure notice jump from 2.3 million to 2.8 million. This year we’re forecasting somewhere in the order of 3.1 to 3.2 million households receiving a foreclosure notice which would set yet another record and it’s likely we will exceed that at least marginally in 2011,” said Sharga.

“We will not be through disposing of the inventory of bank properties until late 2013 and at that point the market will finally have a chance to become fully healthy,” Sharga said, referring to a bright point that is still years away.