There was an 18% year-on-year increase in July foreclosure filings, according to RealtyTrac. The month saw 92,845 filings.

That is one new foreclosure filing for every 1,245 households.

"While foreclosure activity continues to remain slightly below historical averages, there looks to be a significant amount of upward pressure on foreclosure rates in the next few months," siad James J. Saccacio, chief executive officer of RealtyTrac.

"First, the billions of dollars in ARMs projected to reset in the third and fourth quarters could increase monthly mortgage payments for many homeowners," Saccacio explained. "And the cooling real estate market exacerbates the problem for these homeowners by making it tougher for them to sell at a high enough price to pay off their loan balance."

Colorado had the highest rate of foreclosures in the country, with a new foreclosure filing for every 480 households. The state has had the highest foreclosure rate for five straight months.

Colorado saw an increase of 3% in foreclosure filings for the month, and a 55% increase for the year. The state reported 3,810 households entering some form of foreclosure.

Nevada had the second highest foreclosure rate for the second month in a row. There was one new foreclosure filed for every 533 households. There was a 31% increase in foreclosures for the month with 1,626 households entering some stage of foreclosure.

Texas led the country in the most foreclosures with 12,103 filings. The state has remained in this position for eight consecutive months. There was a 15% increase in foreclosures when compared to June.

Six states, including Texas, Florida, California, Michigan, Ohio and Illinois, represented 54% of the nation's foreclosure activity in the past month.