Foreclosure activity in Colorado for January fell to lowest level in about five years, but the mortgage servicing settlement deal could spark additional activity, the Colorado Division of Housing said. 

The state had 1,939 foreclosure filings last month, down 28.2% from 2,699 filings in January 2011. Meanwhile, foreclosure auction sales fell 23.3% in January to 1,150, which is the lowest since 2007 and down from 1,499 last year.

"Foreclosure filings during January fell to levels well below any other January since 2008, and this continues a trend of diminished foreclosure filings activity that we’ve been seeing since the fall of 2010," said Ryan McMaken, a spokesman with the Colorado Division of Housing. "In year-over-year comparisons, foreclosure filings have now fallen for fourteen months in a row, which suggests a well-established trend at this point."

Still, McMaken says the recent  settlement between state attorneys general and servicers could push foreclosure activity up again.

"There have been some indications that some servicers have been holding back on foreclosure processing until the deal was final," McMaken said. "But it's hard to predict how that would pan out here in Colorado and whether that would be enough to reverse the present downward trend."