Fannie and Freddie Put New Distressed-Loan Pools on the Market

Fannie Mae and Freddie Mac each announced non-performing loan activity on Thursday, Oct. 8. Fannie Mae put two new pools on the market, and Freddie Mac reported the results of a $428 million sale while setting a bid date for a smaller offering.

Why this matters: These sales move long-delinquent loans from the GSEs to private investors and their servicers. The buyers inherit borrowers in distress, and the sale terms set rules for how those borrowers must be treated.

Cover: bundled stacks of loan files with a small model house. Illustration created for mortgage.news; it does not depict a real person, property or document.

Fannie Mae's offering

According to Fannie Mae, the larger pool holds about 1,217 deeply delinquent loans with $259.9 million in unpaid principal balance. Its 29th Community Impact Pool holds about 27 loans totaling $5.7 million, all in the Dallas-Fort Worth area. Bids on the larger pool are due Oct. 27, 2026, and on the Community Impact Pool by Nov. 3. BofA Securities is marketing the sale with Fannie Mae.

Freddie Mac's sale

Freddie Mac said it sold 1,968 deeply delinquent loans with a balance of about $428 million in four Standard Pool Offerings. Three pools went to VRMTG ACQ, LLC and one to Igloo Series VII Trust. Average delinquency ranged from 15 to 21 months by pool, and about 51% of the balance consisted of loans that had been modified before and became delinquent again. Settlement is expected in December. Bids for a smaller Extended Timeline Pool Offering are due Oct. 23. mortgage.news covered the Freddie results in more detail here.

The borrower protections in the terms

Both companies attach servicing conditions. Fannie Mae requires buyers to honor approved or in-process loss mitigation, including modifications, and to offer delinquent borrowers a waterfall of options, which may include principal forgiveness, before starting foreclosure, except on vacant or condemned property. If foreclosure cannot be avoided, the property must be marketed first to owner-occupants and nonprofits.

Freddie Mac says buyers must honor existing loss mitigation agreements, solicit distressed borrowers for more help except in limited cases, and complete pending loss mitigation actions.

What it means for investors and servicers

For bidders, the near-term dates are Freddie's Oct. 23 deadline and Fannie's Oct. 27 and Nov. 3 deadlines. For servicers taking on these loans, the protections mean workout capacity and borrower outreach need to be in place at transfer, not after.

Practical takeaway

• Investors: register through each GSE's seasoned-loan pages for pool data and bidder requirements.
• Servicers: plan for honoring in-flight modifications and owner-occupant marketing rules from day one.
• Borrowers whose loan is sold: watch for a servicing-transfer notice, and keep any approved workout documents.