MIAMI, Florida - June 10, 2010 - Florida held onto to its ranking in May as the third worst state in the nation when it comes to foreclosures, according to a RealtyTrac report.

One in every 174 Florida properties received a foreclosure notice last month. Only Nevada and Arizona were worse.

But May’s foreclosure rate in Florida is higher than April’s when 1 in every 182 homes saw a foreclosure action.

The good news for South Florida is that as a region this May brought fewer foreclosure actions than last May, RealtyTrac data showed.

Jack McCabe of McCabe Research & Consulting of Deerfield Beach, said the spike in Miami-Dade County, which had the most speculative investment in South Florida, might be attributable to better efficiencies in processing properties.

But he said any improvements now being seen across South Florida would be washed away if oil from the Gulf spill makes its way onto South Florida beaches in a hurricane storm surge.

“They’d walk,” he said of South Florida homeowners. “There is no way they could sell them for anything.”

Peter Zalewski, managing partner of real estate consultancy Condo Vultures in Bal Harbour, attributes the drop to lenders, who are trying to save money and time by focusing on short sales instead of foreclosures.

“It’s very simple - in ‘07 when things began, it took six months to close a property out and cost a bank $40,000. Now it takes 18 months to close and $100,000,” he said. “Banks are making a financial decision to short-sell rather than taking on the laborious process of foreclosing.”

Miami-Dade County fared the worst in the region with a 31% spike in foreclosure actions in May compared to April. But year-over-year, the county saw a slight decrease in foreclosure activity of less that 1%. Overall, there were 7,700 foreclosure filings, with 1 in every 127 homes receiving a foreclosure notice.