The year-end inventory of foreclosed homes at Fannie Mae fell for the first time since the housing downturn.

In 2011, Fannie reduced its REO inventory 27% to roughly 118,500, according to its fourth quarter financial filing. Levels increased every year since 2007.

For the first time since the collapse, Fannie sold more REO than it repossessed. In 2011, the government-sponsored enterprise acquired nearly 200,000 properties and sold more than 243,000, the most in the company's history.

Total repossessions of REO homes declined nearly 24% from the year before, due mostly to the slowdown caused by servicers correcting affidavit and other documentation problems.

Fannie vendors continued to sell REO for slightly more than half of the unpaid principal balance left on the loan before foreclosure. In 2011, REO net sales price equaled roughly 55% of the UPB on the loan, down from 57% the year before. In 2006, it was 83%.

The Federal Housing Finance Agency began a pilot program in February to more efficiently sell bulk REO held by Fannie and Freddie Mac to investors.

More than 23% of the Fannie Mae REO inventory is located in California, the most of any other state at the end of last year. The next closest is Florida, at 11.5%.

However, Fannie waited the longest on Florida foreclosures.

According to the filing, the average amount of days between the last mortgage payment and the completion of the foreclosure process was 890 days in Florida on Fannie Mae loans. California, a nonjudicial state, was second at 529 days.

According to RealtyTrac, the longest foreclosure timeline in the country resides in New York at more than 1,000 days. But New York loans make up just 5.6% of the Fannie single-family book of business, according to the filing.