Foreclosure filings in July dropped 9.7% from the same month last year, the second straight month of yearly declines, according to RealtyTrac, an online foreclosure marketplace. After a 1% yearly increase in May, filings declined 6.9% on an annual basis in June and the nearly 10% drop in July. There were 325,229 properties that received a foreclosure filing in July, a 4% increase from May. It also marks the 17th consecutive month that foreclosure activity exceeded 300,000, said James Saccacio, CEO of RealtyTrac. Saccacio added that default notices were down from the previous year for the sixth straight month in July as servicers and lenders have escalated repossessions (REOs) to near-record levels. In July 97,123 properties received a default notice, a 28% decrease from July 2009 but a 1% increase from the previous month. Default notices are down 32% from the 142,064 peak in April 2009. But 92,858 properties went back to the banks as REO in July, the second highest monthly total since RealtyTrac began tracking them in April 2005. It's 1% below the peak in May when there were 93,777 REO properties reported. Nevada holds the highest foreclosure rate of any other state for 43rd consecutive month. There, one in 82 houses received a filing in July, and 13,727 total properties received a filing. That is a 7% uptick from last month but a 30% decrease from last year. July marks the 10th straight month of yearly decreases for Nevada. Arizona held the second highest foreclosure rate. There, one in every 167 houses received a foreclosure filing, even though filings dropped year-over-year for the sixth straight month. Florida was third, where one in 171 houses received a filing. California registered the fourth highest, where one in 200 houses received a filing. On the metropolitan-statistical area (MSA) level, the top-10 areas are showing a "bumpy downward trend," according to RealtyTrac. While those areas all showed decreases from last year in July, five of them had decreases from the previous month. The Las Vegas-Paradise area, where one in 71 houses received a foreclosure filing in July, had a 9% increase from the previous month. Filings in the Cape Coral-Fort Meyers, Fla. area increased 21% from June, and the Phoenix-Mesa-Scottsdale area had a 19% climb, the two biggest increases in the country. Write to Jon Prior.