Fannie Mae and Freddie Mac are managing bifurcated REO inventories because of the robo-signing effect on different areas of the country.

The two mortgage giants owned more than 173,000 repossessed homes as of March 31, a 20% reduction from 218,000 held at the same point last year, according to their first quarter financial statements.

Combined, the GSEs sold more than 77,000 REO and acquired 71,500 homes through foreclosure.

But in the middle of 2010, mortgage servicers began freezing foreclosure proceedings in 23 states in which the foreclosure process runs through judicial courts. The servicers had to fix reams of paperwork signed en masse without proper signatures or notarizations. The practice led to consent orders with federal regulators and a $25 billion settlement with 49 state attorneys general.

But holding up the process took a toll on investors.

Most of the REO that Fannie holds is in California, but that is about to change.

Fannie holds 11,789 REO in the Golden State, which is a nonjudicial foreclosure state, according to its filing. That number is down from 21,800 as of the end of March last year, meaning it was allowed to sell off nearly 10,000 more properties than it took in.

In Florida, which is a judicial state and where robo-signing was a major problem, Fannie's REO inventory declined only to 10,401 from 13,871 last year.

For Freddie, the bifurcation was more prominent.

Freddie reduced its inventory of REO in the West to 10,954 from 17,768 one year ago, according to its filing. Meanwhile REO held in the Southeast actually increased to only 13,983 properties from 13,838 last year.

Overall, Freddie reduced its inventory by just 9% over the year ending March 31. By comparison, Fannie was able to reduce its REO holdings by 25% over the same time. However, Fannie holds more than 114,000 properties, nearly twice as many REO as Freddie, leaving it more exposed to extended foreclosure timelines.

Foreclosures completed on Fannie Mae mortgages over the last 12 months spent an average 641 days in the system since the last mortgage payment made, up from 529 days for foreclosures completed in the 2011 calendar year and 479 days in 2010.

"Many servicers are also subject to consent orders by their regulators that require the servicers to correct foreclosure process deficiencies and improve their servicing and foreclosure practices," Fannie disclosed in its filing. "This has resulted in extended foreclosure timelines and, therefore, additional holding costs for us, such as property taxes and insurance, repairs and maintenance, and valuation adjustments due to home price changes."