Foreclosure filings for July rose 32 percent over a year ago and seven percent over June, according to RealtyTrac. One in every 355 US homes received a default notice, was scheduled for auction or was repossessed by a bank last month

“July marks the third time in the last five months where we’ve seen a new record set for foreclosure activity,” noted James J. Saccacio, chief executive officer of RealtyTrac. “Despite continued efforts by the federal government and state governments to patch together a safety net for distressed homeowners, we’re seeing significant growth in both the initial notices of default and in bank repossessions.”

Is this the surge of “shadow” foreclosures predicted by many? Not quite. RealtyTrac’s numbers include filings as well as sales, and it is taking longer and long for properties for work their way through the system, especially in California where notice of default filings surged in December and have remained high ever since, according to Sean O’Toole at ForeclosureRadar. Notices of Trustee Sale have also surged, setting a new record as recently as May. Does that mean foreclosure sales will soar in California for months to dome? Or is the “shadow surge” a myth?

The top four states for foreclosure activity in July were California, with 108,104 properties receiving a foreclosure filing; Florida, with 56,486 properties; Arizona, with 19,694 properties; and Nevada, with 19,535 properties. Together these four states accounted for nearly 57 percent of the nation’s total foreclosure activity.

RealtyTrac does not break down its data by loan type, so it is hard to know how large a role high risk loans and resets of ARMs are having on playing in the foreclosure picture today, but the continued, heavy geographic concentration of defaults suggests that subprime and option ARM loans, which were heavily marketed on those four states, remain a powerful if not dominant cause of defaults.

Subprimes and option ARMs no longer are being sold and their impact on the national foreclosure picture will abate soon as they reset, if they have not done so already. However, unemployment as a factor in defaults clearly is playing a greater role than a year ago. Strategies like the Administration’s foreclosure prevention program, which is based on keeping families in homes by reducing payments, probably won’t help families facing foreclosure due to unemployment. And the foreclosure crisis will continue. Because unemployment is linked to the overall economy, the foreclosure crisis will lessen only as employment improves. Today’s weekly unemployment report made it clear we have a long way to go. The Labor Department said the number of newly laid-off workers filing claims for unemployment benefits rose unexpectedly to a seasonally adjusted 558,000, from 554,000 last week. Analysts were expecting new claims to drop to 545,000.

The next Mortgage Bankers Association delinquency survey, due out soon, does break down delinquencies by loan type and will shed valuable light on the nature of the foreclosure crisis at this point in time.