Bank seizures of U.S. homes fell in the third quarter but an upswing in default notices suggests foreclosures could start to rise again, a report by RealtyTrac said on Thursday.
Default notices were filed on 195,878 properties in the third quarter, jumping 14 percent from the previous quarter and the first increase in five quarters.
Notices were down 27 percent from the same time a year ago.
Foreclosures fell 4 percent to 196,530 homes and were down 32 percent from the third quarter 2010.
Even so, some states saw significant increases, including Massachusetts, which surged 62 percent from the second quarter.
Foreclosure activity was halted temporarily late last year due to claims that lenders relied on "robo-signing," where documents were signed without reviewing the case files.
"The trend to me shows the front end is now starting to flow a little bit," said RealtyTrac chief executive James Saccacio.
"I would venture to say the new loans that will go into foreclosure should clear quicker because you've got now the correct paperwork." Total foreclosure filings — which include default notices, scheduled auctions and bank repossessions — were up 0.3 percent from the previous quarter and down 34 percent from a year ago.
For September, default notices fell 10 percent to 70,710 after hitting a nine-month high in August.
Foreclosures last month totaled 65,047 homes, edging up 0.4 percent from August.
Nevada had the country's highest foreclosure rate last quarter, with one in every 44 homes with a foreclosure filing.
While foreclosures in Nevada decreased from the second quarter, default notices jumped more than 15 percent.