New York -- Industry measures to keep homeowners out of foreclosure have slipped, according to a report issued by a group of state attorneys general and state banking regulators.

Nearly eight out of 10 seriously delinquent homeowners are not on track for any loan workout or loss mitigation assistance, says the State Foreclosure Prevention Working Group.

The group recently issued its analysis of subprime mortgage servicing performance for the period February through May 2008. In a previous study, the group found that seven out of 10 homeowners were not on track for loss mitigation. In its most recent study, the group found that there were 40,000 fewer loans in loss mitigation in May 2008 than there were in January 2008.

"While some progress has been made in preventing foreclosures, the empirical evidence is profoundly disappointing," the group said about the findings.

"Servicers appear to have reached the 'low-hanging fruit' of subprime loans facing interest rate resets, while not developing effective approaches to address the bulk of subprime loans which are in default before interest rate resets," the group continued.