It may be hard to believe, but sometime, somehow, the foreclosure crisis will actually ease. But I really don’t think that this will happen anytime soon.

Home prices dropped 2.6% nationwide during the last three months of 2010, pushing many more borrowers underwater, according to a quarterly real estate market survey from Zillow.com.

Now more than 27% of homeowners with mortgages owe more than their homes are worth. That’s up from 23.2% a quarter earlier. The numbers are considerably worse in the states that have badly hurt by the crisis such as CA, AZ, NV, and FL with the average being over 35%.

That will surely lead to higher foreclosure rates soon. That’s because being underwater is second only to unaffordable payments in leading to foreclosure, according to Zillow’s chief economist, Stan Humphries.

Additionally, the report found that more than one-third of all homes nationally were sold at a loss in December. That trend has been on a steady uptick for the past six months, as homeowners try to find ways around foreclosure or out from under their homes. The primary method being used by homeowners is the short sale. While the timeframe can be several months for approval, the banks are increasingly getting better at approving these transactions.

The so-called robo-signing events of the fall when banks’ foreclosure paperwork came under scrutiny forced the number of underwater mortgages higher since repossessions through foreclosures were halted by many banks until they addressed the issues and straightened things out. This postponed the foreclosures from being cleaned out of the system therefore many more homes stayed underwater rather than foreclosing.

The moratoriums have been only temporary, however, and the defaults that had been stopped up in the foreclosure pipeline are starting to move forward more quickly with increases expected over the next few months.

In addition, most of the banks have paid back the money that was given to them from the government in 2008 and started to become profitable again. At this point the days of homeowners being allowed to stay in their home for up to 2 years without making mortgage payments are over. They are speeding up the foreclosure process so that they can get these non-performing mortgages off of their books and move forward.

Unfortunately, this bump in the number of foreclosures adds to the likelihood that more homes will be dumped onto an already bloated market. That would just further depress home prices, continuing the vicious cycle that has plagued the industry for several years.