Public and Private Loan Sales: Early 2026 Market Signals
Recent announcements show increased activity across both public and private loan sales. On 12 September 2025, HUD released details on a sale of 1,165 vacant HECM notes with a total balance of about $352 million. For Q1, new NPL supply from Fannie Mae and Freddie Mac is expected to reach roughly $500 million. These moves point to a steady, predictable pipeline on the public side.
More unexpectedly, the private market has been far more active. Lenders with exposure to recent subprime auto lending bankruptcies accelerated loan sales to strengthen liquidity. After full write-offs connected to Tricolor, First Brands, and PrimaLend, several banks executed secondary market transactions to recover value and stabilize their balance sheets. The volume was higher than anticipated and reflects broader efforts among affected institutions to improve cash positions.
In my opinion, given current trends, additional private sales are likely through year-end and into Q1. Public agencies appear committed to maintaining consistent offerings, while private lenders continue to adjust portfolios in response to credit losses and capital demands.
Overall, the market is entering 2025 with elevated transaction activity and strong motivation to offload distressed or non-core assets.
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Recent announcements show increased activity across both public and private loan sales. On 12 September 2025, HUD released details on a sale of 1,165 vacant HECM notes with a total balance of about $352 million. For Q1, new NPL supply from Fannie Mae and Freddie Mac is expected to reach roughly $500 million. These moves point to a steady, predictable pipeline on the public side.
More unexpectedly, the private market has been far more active. Lenders with exposure to recent subprime auto lending bankruptcies accelerated loan sales to strengthen liquidity. After full write-offs connected to Tricolor, First Brands, and PrimaLend, several banks executed secondary market transactions to recover value and stabilize their balance sheets. The volume was higher than anticipated and reflects broader efforts among affected institutions to improve cash positions.
In my opinion, given current trends, additional private sales are likely through year-end and into Q1. Public agencies appear committed to maintaining consistent offerings, while private lenders continue to adjust portfolios in response to credit losses and capital demands.
Overall, the market is entering 2025 with elevated transaction activity and strong motivation to offload distressed or non-core assets.
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