Just over seven months ago, the real estate market was hit with a prediction: there would be nearly one million delayed foreclosures that should’ve hit in 2011 but instead would arrive in 2012. This prediction was based off of the virtual halt in the national foreclosure process in 2010 caused by foreclosure fraud scandals that rocked the market and sparked the nationwide debate and controversy over robo-signing, rubberstamping, and other illicit practices.

That same controversy led to the recently-signed National Mortgage Settlement Agreement, which was (partially) intended to help prevent some of the same abuses that led to so many foreclosures from 2007 to 2010. But what about the one million delayed foreclosures from 2010 that would hit in 2012?

It turns out that prediction could be coming true.

According to recent data, foreclosure rates are continuing to rise. January foreclosures are up 3% from December’s numbers, and while that number is still 19% from January 2011, more foreclosures and bank repossessions are taking place than previously.

With the mortgage settlement officially out of the way, the road seems clear for foreclosures to begin again in earnest. There were roughly 804,000 home foreclosures in 2011; in 2012, that number is expected by some to rise by 25% to one million foreclosure properties. Because there is such a massive backlog of home foreclosures in the system, that number could increase even more in 2013 before foreclosure rates begin to level off.

According to the report, the states with the highest foreclosure rates include Nevada, California, Arizona, Georgia, Michigan, Florida, Illinois, Delaware, Colorado, and Indiana – which shouldn’t surprise anyone who has been following the foreclosure market for the past few years. Florida could easily zoom to the top of the list if Governor Rick Scott has his way and Florida’s judicial foreclosure process changes to a non-judicial one. The same goes for New York, where the average foreclosure is in the system for over 900 days. Chances are significantly higher for Florida following that path than New York.

With a flood of foreclosures headed to markets, foreclosure investors are undoubtedly eyeing the upside potential with hunger. This trend will undoubtedly lower home prices further, which in and of itself could contribute to more foreclosure properties as people become unable to sell their homes or refinance their homes with negative equity.

At this point, the only act that would prevent severe market distortion is the government’s foreclosures-into-rentals program becoming wildly successful.