After 10 months of declining foreclosure numbers, filings increased on a monthly basis in August, rising 7% from July’s level, according to data released today by RealtyTrac. On an annual level, foreclosure filings—which include default notices, scheduled auctions, and bank repossessions—were still down 33% from the previous year, with August marking the 11th consecutive month of annual declines.

The month’s uptick came from default notices, which were up 33% from July. While still down 18% from August 2010, August saw the most dramatic monthly filings increase in four years. In total, 78,880 U.S. properties received their first default notice during the month. Both foreclosure auctions and lender repossessions saw declines from July to August, dropping 1% and 4%, respectively.

A surge has been long-awaited as banks have been negotiating paperwork and robo-signing issues that have been creating a backlog of anticipated foreclosure actions. August's increase seems to indicate that banks have resolved the delaying issues.

"The pig in the pipeline analogy is appropriate here," said Daren Blomquist, a RealtyTrac spokesman, on a call with Builder yesterday. "Now it’s default notices. In a few months you’ll see that [bulge] appear in the auction category. It’s kind of a messy pattern."

But even with the anticipated waves, Blomquist says RealtyTrac doesn’t foresee a return of the filing levels the industry saw last year. "The peak is past," he said. "We’re probably going to see a couple more mini peaks in activity over the next few month as some of the paperwork issues are worked out. It’s going to be a saw-toothed recovery."

Scheduled auctions are also showing big swings in states where auction notices are the first public foreclosure notice: Oregon saw a 19% increase on a monthly basis; Georgia gained by 22%; and Colorado saw an increase of 51%. However, despite those gains, auction notices in all those states were still down year-over-year.

On a state-by-state basis, Nevada continues to hold the record for the highest rate of foreclosure filings. August saw a 3% decrease in Nevada filings overall, fueled by a 30% month-over-month decline in scheduled auctions and a 6% drop in repossessions. But in a sign of pain to come, the state’s default notices gained by 31% from July.

California had the second highest foreclosure rate in the nation in August. The state saw a 55% monthly increase in default notices.

Overall, five states—California, Florida, Michigan, Illinois, and Georgia—accounted for 53% of total foreclosure activity for the month.

For metro areas, the cities that are struggling the most found signs of more pain to come in August's report. Nine of the top 10 foreclosing metros experienced double-digit monthly increases in default notices. With a foreclosure filing rate of five times the national average in August, Las Vegas continued in the No. 1 spot. Eight of the cities on the list were in California, with Reno, Nev., rounding out the top 10.

Claire Easley is a senior editor at Builder.

Learn more about markets featured in this article: Las Vegas, NV, Greenville, SC.