The foreclosure process and REO activity increased in January; is now expected to increase and accelerate according to RealtyTrac’s report.

The foreclosure bottleneck is beginning to loosen, according to RealtyTrac’s U.S Foreclosure Market Report released Thursday. According to the report, foreclosure filings — which include default notices, scheduled auctions and bank repossessions (REO) — rose 3 percent in January.

Foreclosure filings were reported on 210,941 U.S. properties in January, or one if every 624 U.S. homes. That’s a lot, but marks a 19 percent decrease year-over-year.

Brandon Moore, chief executive officer of RealtyTrac, believes it’s just the beginning of the uptick in foreclosures and REO:

“Although overall foreclosure activity was down from a year ago for the sixteenth straight month in January, we continue to see signs on a local and regional level that the frozen-up foreclosure process is beginning to thaw,” Moore said in a press release Thursday. “Foreclosure activity increased on a year-over-year basis for the first time in more than 12 months in Florida, Illinois, Indiana and Pennsylvania, following a pattern we saw in late 2011 in states such as California, Arizona and Massachusetts.”

“We expect the pattern of increasing foreclosures to continue in the coming months, especially given the finalized mortgage and foreclosure settlement reached in early February between 49 state attorneys general and five of the nation’s largest lenders,” Moore wrote. “The settlement sets forth clear guidelines for lenders and servicers to follow when foreclosing, which should allow them to push through some of the delayed foreclosures from last year.”

Moore expects to see uneven trends in local and regional foreclosure numbers going forward due to the “roadblocks [to foreclosure] still in place at the state level.”

Nevada, California and Arizona posted the highest rate of foreclosures by state. Nevada had the highest foreclosure rate for the 61st straight month — one in every 198 homes received a foreclosure filing — but experienced a 52 percent year-over-year decrease in foreclosures.

Despite their high foreclosure rates, all three states saw year-over-year drops in foreclosure filings.

The RealtyTrac report listed foreclosure activity by type:

Default notices: A total of 58,362 U.S. properties received their first default notice in January. That’s a 22 percent year-over-year drop nationwide, but default notices increased from last year in Connecticut, Massachusetts, Florida, Maryland and Pennsylvania.

Foreclosure auctions: Nationwide, the number of scheduled foreclosure auctions rose 1 percent month-over-month but experienced a 20 percent year-over-year drop. Even so, some states — including Minnesota, Massachusetts, South Carolina, Indiana and Illinois — saw big increases in the number of scheduled auctions.

Bank repossessions (REO): REO activity increased nationwide by 8 percent month-over-month in January, but decreased by 15 percent year-over-year. REO activity increased by more than 30 percent in Wisconsin, Connecticut, Illinois, Indiana, New Hampshire and Massachusetts.