Despite an uptick in prices and a more balanced supply of homes on the market -- signs that the housing market may have turned the corner -- foreclosures continued to increase across the nation in the first quarter.

During the first three months of 2010, 16 percent more households received a foreclosure-related filing such as a default notice or a scheduled sheriff's sale than in the first quarter of 2009, according to RealtyTrac's foreclosure market report. Foreclosure-related filings rose 7 percent compared with the last quarter of 2009. Ten states -- led by California, Florida and Arizona -- account for nearly three-quarters of the nation's foreclosure activity, the report found.

In Minnesota, one in every 253 households received a foreclosure-related notice in the first quarter -- an increase of 28 percent over last year's first quarter and flat with the fourth quarter of 2009. Still, foreclosure-related notices were 13 percent lower than they were in the third quarter last year, when filings peaked in the state. Minnesota is 26th-highest in the nation for the rate of foreclosure-related notices received.

Ed Nelson, spokesman for the Minnesota Homeownership Center, has said he expects that the number of homeowners who ultimately lose their homes to foreclosure will be similar to what was seen in 2009, when 23,019 foreclosures occurred. That was down 12 percent from 2008.

Separately, the government's Home Affordable Modification Program (HAMP) announced Wednesday that 57,000 more homeowners had their mortgages modified in March, bringing the total of troubled borrowers with HAMP loan modifications to more than 1.1 million.

In Minnesota, there were 13,852 active trial modifications and 4,948 permanent modifications granted in March for a total of 18,800. Of the 165,217 HAMP modifications started by Wells Fargo, 30,014 were permanent and 9,162 were pending permanent status. Add the modifications that Wells Fargo has approved using its own standards to the government total, and the bank had a combined total of 523,336 modifications.

However, a report by the independent Congressional Oversight Panel found the program falls short and leaves many homeowners struggling to make ends meet. In a report released Wednesday, the panel said that the administration projects only 1 million families will end up with lower monthly payments as a result of the program. Six million families are more than two months behind with their payments, and 200,000 more families receive foreclosure notices each month.

Elizabeth Warren, who heads the independent panel set up by Congress, warned that borrowers who have their monthly payments lowered as a result of the program still could lose their homes because the payments remain high and many Americans are facing new financial strains.

"Redefault signals the single worst form of failure" by the Treasury Department, said Warren, who is a professor at Harvard Law School. "Billions of taxpayer dollars will be spent and families will nonetheless lose their homes."

The Associated Press contributed to this report. Kara McGuire • 612-673-7293