After a 30% climb over the last four years, foreclosures will decline in 2010, according to research from University Financial Associates (UFA), a risk management firm based in Ann Arbor, Mich. Dennis Capozza, the professor finance with the Ross School of Business at the University of Michigan and founding principal of UFA, points to a combination of a slowing of house price depreciation, a reviving economy, tighter underwriting of recent loans and the “burnout” of poor-performing vintages from three to five years ago. “Working against the welcome decline in foreclosures is the steep increase in unemployment, which will interact with the large numbers of homeowners who are underwater to prevent even greater declines in foreclosures that could have been expected without high unemployment,”  Capozza said. Every quarter UFA  analyzes representative mortgage loans in the serviced portfolio of all outstanding mortgages and estimates the probability of prepayment and default in every month of the loan’s future life, according to the report. Analysts input loan-to-value ratios, credit scores and UFA’s own zip code level economic scores into the quarterly assessment. UFA collects zip code level analysis to extrapolate a national forecast. Write to Jon Prior.