Foreclosure starts rose 20% in August from the prior month to the highest level of the year and mortgages facing foreclosure are delinquent an average of 611 days, the highest level yet. Lender Processing Services' (LPS) mortgage monitor report for August showed foreclosure starts fell more than 12% from a year earlier, and the national delinquency rate is 8.13%, which is 2.5% lower than the prior month. In late August, the Federal Deposit Insurance Corp. said the combined delinquency rate on mortgages held by major banks dropped to 6.68% in the second quarter, the lowest level since the third quarter of 2009. First-time delinquencies accounted for nearly one-quarter of new delinquencies in August, according to LPS. And 23% of the nearly 46 million loans that were current at the end of August are at risk of foreclosure due to negative equity. LPS said more mortgages moved back into delinquent status from foreclosure in August than ever before, "suggesting that process reviews and potential loss mitigation activity are continuing." The company said the average delinquency process in non-judicial states is about six months shorter than judicial states, where backlogs remain extremely high. LPS said loans delinquent more than 90 days declined to 2008 levels in August. Florida, Mississippi, Nevada, New Jersey and Illinois had the highest percentage of loans in delinquency or foreclosure. The states with the lowest rates of non-current loans were Montana, Wyoming, Alaska, South Dakota and North Dakota. Write to Jason Philyaw. Follow him on Twitter: @jrphilyaw.