Foreclosure activity surged last month across about half of the nation's states, including in Indiana, as banks tackled a backlog of homes with mortgages that had gone unpaid yet remained in limbo due to delays stemming from foreclosure-abuse claims.

The increase occurred across 26 states where the courts supervise the foreclosure process. In contrast, the 24 states where the courts do not play a role in the process saw activity decline in February, foreclosure listing firm RealtyTrac Inc. said Thursday.

Indiana saw default notices climb 37 percent in February compared to February 2011. Scheduled home auctions were up 92 percent from the previous year.

Overall, Indiana ranked 13th among states in foreclosure rates, with one foreclosure out of every 685 households. Nevada topped the nation with a ration of one foreclosure for every 278 housholds.

While uneven, the pace of foreclosures is accelerating following a $25 billion settlement reached last month between the nation's biggest mortgage lenders and state officials. The settlement was over the industry's alleged foreclosure abuses.

Major banks temporarily put foreclosures on hold in the fall of 2010 after claims surfaced that lenders and mortgage servicers were processing foreclosures without verifying documents. As a result, many homes that would have normally ended up foreclosed were left in a procedural limbo, particularly in states where courts play a role in the process.

But that logjam has begun to ease, and banks are moving to sort out their roster of problem mortgages.

"We're not just seeing an increase in properties starting the foreclosure process, as we have in previous months, but we're starting to see dramatic increases in properties completing the foreclosure process in many of those judicial foreclosure states," said Daren Blomquist, a vice president at RealtyTrac.

That means potentially more foreclosed homes hitting the market this year that could drag down the value of neighboring homes.

Among states with a judicial foreclosure process, foreclosure activity rose 2 percent last month from January, and climbed 24 percent from February last year, the firm said.

Foreclosure activity across states without a court-supervised process fell 5 percent in February from the previous month and declined 23 percent from a year earlier.

RealtyTrac bases foreclosure activity on filings that signal when a home is in some stage of the foreclosure process: an initial default notice, a scheduled home auction or a home repossession, which is when a property goes back to the lender.

Overall, U.S. foreclosure activity dipped 2 percent from January and was down 8 percent from February last year.

Taken individually, some states registered far higher increases in foreclosure activity last month.

Default notices, the first step in the foreclosure process, edged up 1 percent nationally last month from January, but fell 7 percent on an annual basis. But several states posted big annual increases, including Hawaii (321 percent), Maryland (157 percent) and Florida (33 percent) — all three states where courts play a role in foreclosures.

Initial default notices fell sharply in several states, including Nevada (89 percent) and Michigan (72 percent). New York bucked the trend of other judicial states, posting an annual drop of 44 percent in default notices last month.

Banks repossessed 63,834 U.S. homes last month, down 4 percent from January and a decline of 1 percent from February last year, RealtyTrac said.

Once more, the national figures don't tell the whole story, however.

Repossessions skyrocketed in February versus a year earlier in Massachusetts (114 percent), North Carolina (95 percent), Florida (90 percent) and Georgia (76 percent), among other states.

"At the end of the day in 2012, we are going to see an increase in foreclosures nationally from 2011," Blomquist said.

RealtyTrac projects foreclosures will rise 25 percent this year to more than 1 million homes. Last year, lenders took back 804,000 homes.

More than 6 million homeowners were either behind on their mortgage payments or in foreclosure at the end of last year, by some estimates. And about a quarter of all U.S. homeowners, some 11 million, are underwater on their homes, owing more on their mortgages than their homes are worth, according to CoreLogic, a real estate data firm.

At the state level, Nevada continued to post the nation's highest foreclosure rate last month, with one in every 278 households in the state receiving a foreclosure-related filing. That's more than twice the national average.