Foreclosure rates slowed in May; now the market can slug out its interpretation. Will investors pay attention to these better numbers, or rue the looming outlook?

In May, foreclosure rates fell 6%, according to RealtyTrac, with more than 321,000 households receiving at least one foreclosure-related notice last month. But it was still 18% higher from the same time last year and the third straight month with more than 300,000 households receiving a foreclosure filing.

In a normal economy filings generally fall around 100,000 a month.

And this slowdown in foreclosures might not last for long. The mortgage industry has only recently resumed cracking down on delinquent borrowers after foreclosures were temporarily halted by mortgage finance companies

Fannie Mae

and

Freddie Mac

, as well as other lenders; those moratoriums are set to expire during the next few months.

Banks repossessed about 65,000 homes in May, up from 64,000 in April, due to big increases in several states including Michigan, Arizona and Nevada.

One in every 398 U.S. homes received a foreclosure filing last month, according to the foreclosure listing firm's report.

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