Lenders overall foreclosed on fewer homes with 52,380 American properties going through the foreclosure process in August, a 2% drop from July and a 19% decline from August 2011.

Daren Blomquist, vice president of RealtyTrac, said foreclosure activity in the majority of nonjudicial foreclosure states continued to fall in August with Washington state remaining a notable exception. Its foreclosure activity increased 38% annually.

Blomquist expects this trend to resurface with nonjudicial foreclosure states moving through the default process at a steady pace while judicial foreclosure states experience sudden fluctuations up and down as legislation and courts stall foreclosures, pushing them later on the calendar.

“The rebounding activity in Washington state is likely the result of lenders catching up with foreclosures delayed by a state law that took effect in July 2011 and allowed homeowners facing foreclosure to request mediation,” said Blomquist. “This rebounding pattern will likely be repeated in the coming months in other states that have passed legislation delaying the foreclosure process.”

Judicial foreclosure states such as Florida, Illinois, New Jersey and New York exhibited the effects of deferred foreclosures with default notices ticking up, pushing foreclosure rates higher in August.

“Previous to August, the nation’s top two state foreclosure rates have been from those four nonjudicial states every month since December 2010,” Blomquist added.

Instead, Illinois ended the month of August with the highest foreclosure rate. The  state had one out of every 298 homes facing a foreclosure filing. This is the first time Illinois has taken the top spot since the survey was launched in 2005. 

Twenty states — including New Jersey, New York, Maryland, Illinois and Pennsylvania — saw year-over-year increases in foreclosure activity. It was the opposite in the majority of nonjudicial foreclosure states with activity levels falling 31% annually in those combined jurisdictions.

About 15 nonjudicial foreclosure states and Washington, D.C., did experience monthly foreclosure activity increases. Those states included Arkansas, Utah, Colorado and Washington, where monthly foreclosure activity levels rose anywhere from 23% to as much as 61% in Arkansas.