US: Freddie Mac auctions 1,968 delinquent loans, Fannie Mae opens bids

In this article

Written by

Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

About Kooky and Shaka →

Freddie Mac said on 8 October 2026 that it had sold 1,968 deeply delinquent home loans at auction, with a combined balance of about US$428 million. The news release names two winning bidders across four pools, and one of them took three of the four.

On the same day, Fannie Mae announced its own sale of non-performing loans: about 1,217 deeply delinquent mortgages with US$259.9 million still owed on them, plus a small pool of about 27 loans in the Dallas-Fort Worth area. Bids on those are due later in October and in early November.

These are not auctions of houses. What changes hands is the loan itself, and with it the right to collect, to modify or, in the last resort, to foreclose. For anyone who follows distressed property in the United States, the two releases together show how much of this stock is moving, at what kind of price, and under what conditions for the borrowers who still live in the homes.

Freddie Mac news release, 8 October 2026.

What Freddie Mac sold

According to the Freddie Mac release, the loans are non-performing residential first-lien mortgages, described as deeply delinquent, and they come from the company's mortgage-related investments portfolio. They were offered through what Freddie Mac calls its Standard Pool Offering, or SPO. Marketing began on 16 September 2026, so the route from offer to named winners took about three weeks. Settlement is expected in December 2026.

The sale was split into four pools of very different sizes. The largest holds 911 loans and US$189.0 million of unpaid principal balance, the amount borrowers still owe. The smallest holds 153 loans and US$39.3 million. The four balances add up to US$428.0 million and the four loan counts to 1,968, which matches the totals in the release.

VRMTG ACQ, LLC won the three larger pools. Added together they come to US$388.7 million and 1,815 loans, which is about 91 per cent of the balance sold and about 92 per cent of the loans. Igloo Series VII Trust won the fourth pool, the smallest.

The loans themselves are ordinary in size. Dividing the total balance by the number of loans gives an average of about US$217,500 per mortgage. Freddie Mac's own pool averages run from US$207.4K in the first pool to US$256.9K in the fourth, with US$211.1K and US$241.2K in between. The smaller the pool in this sale, the larger the typical loan inside it.

How to read the cover bid

The release does not publish the winning prices. What it gives, pool by pool, is the cover bid, which the release defines as the second-highest bid, expressed as a rough share of the unpaid principal balance.

That is a useful number even without the winning price. In an auction the winner has, by definition, offered more than the bidder behind it, so the cover bid sets a floor under what the buyer paid. For the three larger pools the second-best offer was in the mid 90s, or the low to mid 90s for the third pool. In plain terms, at least one losing bidder was ready to pay somewhere around 95 cents for each dollar still owed on mortgages that have not been paid for well over a year.

The fourth pool stands apart. Its cover bid was in the mid 80s, roughly ten points below the first two. The release offers no explanation, and none is given here. What the published figures do show is that this is the smallest pool, with the highest average balance.

A cover bid also says something about competition. A second-best offer in the 90s means the winner was not bidding alone: more than one qualified buyer wanted these loans at close to their face amount.

Homes worth more than the debt

One line of the release helps explain those prices. For each pool Freddie Mac gives a percentage that it labels a BPO-weighted CLTV. The release, as read for this article, does not spell the abbreviations out. The figure is read here in the sense the trade usually gives it: what is owed on a property set against what the property is estimated to be worth.

In the two largest pools the debt is about half of the estimated value of the homes. In the other two it is about two thirds. In every pool, on that reading of the figures, the homes are worth clearly more than the loans secured on them. That is the setting in which bidders offered prices close to the full balance: the security behind each loan is, on average, larger than the loan.

It also matters for the households concerned. A borrower who owes half of what the home is worth is in a very different position from one who owes more than the home would fetch. The release does not say what share of these borrowers will keep their homes, and no forecast is made here.

The loans have been in trouble for a long time. The average delinquency is 17 months in the first pool, 15 in the second, 21 in the third and 18 in the fourth. Weighting those four averages by the number of loans in each pool gives about 17 months for the sale as a whole. Freddie Mac also says that about 51 per cent of the aggregate balance, roughly US$218 million of the US$428 million, is made up of loans that had already been modified once and then fell behind again.

What the buyers must do for borrowers

Winning a pool does not give the buyer a free hand. Freddie Mac states that purchasers must honour the loss-mitigation agreements that already exist on the loans, must solicit distressed borrowers for additional assistance, and must complete any loss-mitigation action that is pending at the time of sale.

Fannie Mae's announcement sets out a similar list for its own buyers, in more detail. They must offer loss-mitigation options that are sustainable for the borrower and honour modifications that are approved or in process. Before foreclosing on any property that is not vacant or condemned, they must offer a waterfall of options, which may include principal forgiveness. If foreclosure cannot be prevented, the home must be marketed to owner-occupants and non-profits first. Fannie Mae describes that last requirement as similar to FirstLook.

Day-to-day dealings with borrowers are handled by servicers. Freddie Mac lists four on the loans it sold: Select Portfolio Servicing, NewRez (Shellpoint), Selene Finance and Rocket Mortgage (Rushmore Servicing). BofA Securities and First Financial Network advised Freddie Mac on the transaction.

For agents and investors who work with distressed property, the owner-occupant rule in the Fannie Mae terms is the practical point. Where one of these loans does end in foreclosure, the home is to be offered first to people who will live in it and to non-profits, before other buyers.

Fannie Mae's sale, announced the same day

Fannie Mae's release of 8 October, titled as an announcement of a sale of non-performing loans, covers two offerings. The first is the larger pool: about 1,217 deeply delinquent loans with US$259.9 million of unpaid principal balance. That works out at about US$213,600 a loan, close to the Freddie Mac average. Bids are due on 27 October 2026.

The second is what Fannie Mae calls a Community Impact Pool, the twenty-ninth it has offered. It is far smaller, about 27 loans with US$5.7 million of unpaid principal balance, and it is concentrated in one place, the Dallas-Fort Worth area. Bids on it are due a week later, on 3 November 2026. Both offerings are marketed with BofA Securities, Inc., the same firm that co-advised the Freddie Mac sale, and both are open to qualified bidders.

Taken together, Fannie Mae is offering about 1,244 loans and US$265.6 million of balance. Add the Freddie Mac auction and the two releases of 8 October cover about 3,212 mortgages and roughly US$693.6 million.

Fannie Mae's newsroom shows that this is a steady rhythm. It lists an earlier sale announced on 19 August 2026, the winners of its latest non-performing loan sale on 21 September, and the winner of its twenty-eighth Community Impact Pool on 29 September. The new offering comes nine days after the last of those announcements.

The dates that follow

Neither story ends with the releases. Freddie Mac has a second, smaller offering still open, and Fannie Mae's two deadlines fall within the next four weeks.

The Extended Timeline Pool Offering, or EXPO, is described by Freddie Mac as the smaller of its two offerings. Its bids are due on 23 October, more than two weeks after the standard pools were awarded. After that, the next fixed point on Freddie Mac's side is the settlement of the four pools just sold, expected in December 2026.

One figure is left open. Freddie Mac's list of news releases shows that the offering was announced on 16 September as a US$474 million non-performing loan sale, while the release of 8 October reports about US$428 million sold. The difference is US$46 million. The material from the two releases does not say what accounts for it, so it is recorded here as a gap, not explained.

How large this is, and what is missing

Freddie Mac puts the sale in a longer series: since 2011, it says, it has sold US$11.4 billion of non-performing loans. The US$428 million sold this time is a little under 4 per cent of that total, a single step in a programme that has now run for some fifteen years.

It would be useful to set these sales beside fresh figures on foreclosures across the country, but there are none dated this week. The most recent foreclosure post on the news pages of the data firm ATTOM is its state-by-state report for August 2026, published on 18 September, and no third-quarter report had appeared there by 9 October. The two loan sales are therefore among the few dated items this week on the distressed end of the housing market.

They give a narrow view, but a precise one. They cover only loans held by two companies, and only those the companies chose to sell. Within that limit they show loans that are 15 to 21 months behind on average, secured on homes estimated to be worth well above the debt, with second-best bids mostly in the 90s as a share of the balance.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

About Kooky and Shaka →