It’s been relatively calm on Hawaii’s home foreclosure front during the past several months, but the storm could soon return.

Foreclosure activity in Hawaii real estate declined for a fourth consecutive month in March, falling 37 percent from a year earlier, according to a report industry research firm RealtyTrac released yesterday.

The count — 691 foreclosure filings last month — was the lowest in nearly two years. It was also less than half the record 1,629 reached in August.

But RealtyTrac and local foreclosure attorneys say recent declines likely will be over soon when several major lenders resume more normal processing of delinquent mortgage cases after resolving issues with improper case documentation.

Marvin Dang, a Hono­lulu foreclosure attorney, said he expects a rebound as early as this month or next month.

"There should be some increases in foreclosures, though it’s hard to say how much," he said.

Daren Blomquist, a RealtyTrac spokesman, said rebounds after the artificial lulls have already occurred in a few other states, and the trend most certainly will follow for Hawaii.

"Over the last three or four months, the (foreclosure) numbers have just fallen off a cliff," he said. "It’s really too sudden of a decline to say that it’s a true market recovery."

Some lenders began announcing in October that they were voluntarily holding back on filing new foreclosure cases or selling repossessed homes after their loan documentation practices were called into question and rejected in some courts.

Since then, lenders including Bank of America, JPMorgan Chase and GMAC Mortgage have been addressing deficiencies. If problems are resolved, there will be a backlog of delinquent mortgages to process, though the size of a resurgence may be limited by processing capacity and take several months or more to return to more normal levels.

Eventually as the economy recovers, foreclosure filings will subside, but industry observers say it’s too soon to predict when that will likely happen given present instability in the economy and housing market.

Last month, foreclosure filings nationally fell 35 percent to 239,795 from 367,056 in March 2010, which represented the highest monthly total since RealtyTrac began publishing the data in 2005.

The national rate last month represented one foreclosure filing for every 542 households.

Hawaii had the 16th highest rate at one filing for every 746 households.

The worst rate was in Nevada, where there was one filing for every 88 households.

Kauai had the next best rate at one filing per 793 households, and the lowest number of filings at 38.

On Maui there were 161 filings, or one for every 414 households.

The worst rate was on Hawaii with one filing per 397 households based on 203 filings.

RealtyTrac counts three types of filings in its data that can occur at different stages of the foreclosure process — initial default notices, auction notices and lender repossessions.

Statewide, most Hawaii foreclosure filings, 365, were auction notices. Another 280 filings were lender repossessions, while just 46 filings were default notices.

The methodology produces a somewhat imprecise measure of how many homes are in the process of foreclosure because RealtyTrac counts different types of filings on the same property if they occur in different months, which means some properties may be counted in more than one month.

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.