On January 21, HUD issued a notice in the Federal Register announcing its intention to sell approximately 2,500 home equity conversion mortgages (HECMs) secured by occupied properties, with a total loan balance of about $730 million. The notice stated that the sale, scheduled for February 10, will consist of due and payable Secretary-held HECMs where both the borrower and any spouse are deceased and heirs have not claimed the properties. The agency described the initiative as intended to reduce financial risk to the FHA’s Mutual Mortgage Insurance Fund and to expedite the disposition of defaulted assets. HUD noted that it would make the Bidder Information Package — outlining sale structure, loan pool composition, and bidding procedures — available to qualified bidders on or around January 7.

According to the notice, the HECM loans will be sold without FHA insurance and with servicing released, using an “open competitive whole-loan sale method.” Eligibility requirements for bidders included submitting a confidentiality agreement and qualification statement, with specific exclusions for entities debarred from federal business, those with revoked mortgage-related licenses, and certain related parties. HUD stated that this sale does not establish a policy for future transactions.