NEW YORK ( TheStreet) -- Foreclosure activity increased by just less than 1% in the third quarter of 2011, according to RealtyTrac. However, the firm says a higher rate of default notices indicates lenders may finally be taking the brakes off of foreclosure proceedings. "We're seeing the numbers go up after three straight months of quarterly decreases," says James Saccacio, chief executive officer of RealtyTrac. According to the data, one in every 213 U.S. housing units entered some stage of foreclosure - default notice, auctions and bank repossessions - during the third quarter. Foreclosure filings were reported on 214,855 U.S. properties in September, a 6% decrease from August 2011 and a 38% decrease from September 2010. But Saccacio says there is "evidence that this temporary downward trend is about to change direction, with foreclosure activity slowly beginning to ramp back up." He points to default notices - the first stage in the foreclosure process - which were up 14% from the first quarter of 2011, as banks finally begin to push through the shadow inventory that accumulated as a result of low housing prices and the robo-signing controversy of 2010. "U.S. foreclosure activity has been mired down since October of last year, when the robo-signing controversy sparked a flurry of investigations into lender foreclosure procedures and paperwork," Saccacio says. "It's time to press play again." Saccacio believes foreclosure rates will return to higher levels in the coming months. However, even if banks resume a high number of foreclosure filings in the near future as predicted, the robo-signing controversy will not be without lasting effects on the market. RealtyTrac finds foreclosure processing and sales timelines are at record highs. U.S. properties foreclosed on in the third quarter took an average of 336 days to complete the process, which was up from 318 days in the second quarter and is the highest number of days going back to the first quarter of 2007. State by state, Nevada continues to post the nation's highest state foreclosure rate with one in every 44 housing units with a foreclosure filing in the third quarter.
California posted the second-highest foreclosure rate, where one in every 88 housing units had a foreclosure filing during the quarter, followed by Arizona, where one in every 93 housing units had a foreclosure filing. Other states with high foreclosure rates include Georgia, Florida, Utah, Michigan, Idaho, Illinois and Colorado.