Also, foreclosure filings were reported on 198,853 US properties in March, a 4% decrease from February and a 17% decrease from March 2011. March’s total was the lowest monthly total since July 2007, and also the first monthly total below 200,000 since July 2007.

“The low foreclosure numbers in the first quarter are not an indication that the massive reservoir of distressed properties built up over the past few years has somehow miraculously evaporated,” says Brandon Moore, CEO of RealtyTrac. “There are hairline cracks in the dam, evident in the sizable foreclosure activity increases in judicial foreclosure states over the past several months, along with an increase in foreclosure starts in many judicial and non-judicial states in March. The dam may not burst in the next 30 to 45 days, but it will eventually burst, and everyone downstream should be prepared for that to happen—both in terms of new foreclosure activity and new short-sale activity.”

The housing market still has to navigate through treacherous territory littered with several potential foreclosure minefields, Blomquist tells GlobeSt.com. “Those minefields are primarily the backlog of postponed foreclosures built up over the past year because of processing and paperwork delays, particularly in judicial foreclosure states (RealtyTrac data shows 715,000 properties in the foreclosure process, plus another 630,000 already foreclosed but not yet sold by the banks), the large pool of seriously delinquent borrowers who haven’t even started the foreclosure process (about 1.5 million. according to the Mortgage Bankers Association), and the even-larger pool of homeowners who are seriously underwater on their mortgages (RealtyTrac data shows 12.5 million of these nationwide).”

RealtyTrac will release its first-quarter foreclosure sales report on May 31, Blomquist tells GlobeSt.com. The nationwide surge in foreclosure activity that he expects to see around August through November is due to lenders pushing through foreclosures on properties that didn’t qualify for short sales or loan modification or other foreclosure alternatives. “We’re already seeing foreclosure activity jump from a year ago in many states, primarily judicial foreclosure states like Florida, Illinois, Indiana and Pennsylvania, but that trend will expand more broadly later in the year.”

The 26 states that primarily use the judicial foreclosure process combined accounted for 243,074 properties with foreclosure filings during the quarter, an increase of 8% from the previous quarter and an increase of 10% from first-quarter 2011, the report revealed. Also, the nationwide decrease in foreclosure activity was caused primarily by decreasing activity in states that use the non-judicial foreclosure process. These 24 states combined, along with the District of Columbia, had 329,854 properties with foreclosure filings during the quarter, more than half the national total, but a decrease of 8% from the previous quarter and a decrease of 28% from first-quarter 2011.

In addition, first-time foreclosure starts—either default notices or scheduled foreclosure auctions depending on the state’s foreclosure process—increased 7% from February to March, the third straight monthly increase. Foreclosure starts in March exceeded 100,000 for the first time since November 2011, although they were still down 11% from March 2011. Nevada, California and Arizona posted the top state foreclosure rates, and California, Florida and Illinois posted the top foreclosure activity totals.

Average foreclosure timelines appear to be turning a corner in some bellwether states. The average time to foreclose in California was 320 days, down from 352 days in the previous quarter and the second straight quarterly decrease after 12 straight quarterly increases. The average time to foreclose also decreased in Colorado, Utah, Massachusetts, Nevada, Michigan and Maryland.

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