) -- Foreclosure activity increased 7% in August, according to RealtyTrac, a group that monitors the market.

A total of 228,098 U.S. properties entered some stage of foreclosure - default notices, scheduled auction or bank repossessions - last month.

Default notices in particular increased by 33% in August, indicating lenders may be starting to push backlogged distressed properties through the pipeline.

"It feels almost like the industry hit the reset button this month," Rick Sharga, senior vice president of Realty Trac, told sister site


. He attributes some of the spike to judicial proceedings, such as the

N.J. Supreme Court decision

that allowed four out of five major banks to resume foreclosure filings on distressed homes.

Otherwise, "lenders have just decided to move forth on some of these loans," he says.

While the data still illustrates a year-over-year decline in foreclosures filings, it is a marked improvement over July's news that lenders' reluctance to repossess properties due to lingering paperwork concerns and a poor housing market could keep

1 million distressed homes on the market

well into 2012.

The decision to push forward is an important one since RealtyTrac has

long argued that property values

won't go back up until a large number of distressed properties come off the market.

"We don't know yet if this is a beginning of a trend, but there is a good chance we might see might see a return to a more realistic foreclosure numbers," Sharga says.

State-by-state, Nevada posted the highest rate of foreclosures for the 56th month in a row, with one in every 118 housing units receiving foreclosure filing last month. It was followed by perennial second-place finisher California, where one in every 226 properties entered foreclosure, and Arizona, where one in every 248 housing units did the same.

Other states with high foreclosure levels include Georgia, Idaho, Michigan, Florida, Illinois, Colorado and Utah.

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