The number of foreclosures across the U.S. dropped in May, according to RealtyTrac.  From the release:

Default  notices (NOD, LIS) were filed for the first time on a total of 58,797 U.S. properties  in May, a 7 percent decrease from the previous month and a 39 percent decrease  from May 2010. May’s total was the lowest number of monthly default notices  since December 2006 — a 53-month low.

Foreclosure  auctions (NTS, NFS) were scheduled for 89,251 U.S. properties in May, an increase  of 3 percent from the 31-month low hit in April, but still down 33 percent from  May 2010. May’s monthly increase followed eight straight monthly decreases in  scheduled foreclosure auctions.

Bank repossessions (REOs) decreased on a monthly  basis for the second straight month in May, with 66,879 U.S. properties  repossessed by lenders during the month — a 4 percent decrease from the  previous month and a 29 percent decrease from May 2010. Since the so-called  robo-signing controversy came to light in October 2010, REO activity has  followed a rollercoaster pattern, with five monthly decreases and three monthly  increases.

Still, the inventory of repossessed homes continued to rise, as lenders are having a hard time selling them.  Read the full release here.