The short answer is 69.4% of broker price opinion. That is what 1,061 defaulted reverse mortgages sold for in HUD's most recent vacant loan sale — roughly sixty-nine cents against the estimated value of the houses securing them. But the way that number is reported is easy to misread, and the spread underneath it is where the real information sits.
Three prices, three very different numbers
HUD reports each bid three ways, and the same auction looks cheap or expensive depending on which you read:
| Measured against | Pool total | Bid as % |
|---|---|---|
| Unpaid principal balance — principal only, no accrued interest or fees | $146.9M | 131% |
| Updated loan balance — principal plus accrued interest, insurance premium, servicing fees and advances | $321.3M | 60% |
| Broker price opinion — estimated market value of the property | $277.8M | 69.4% |
The 131% figure is the one that misleads. Bidders did not pay a premium. These are reverse mortgages that have been accruing interest, insurance premiums and servicing advances for years after the borrower died — the updated balance is more than double the original principal. Paying 131% of principal is paying 60% of what is actually owed.
Only the BPO percentage tells you anything about property value, which is why it is the number worth tracking.
The debt exceeds the collateral
Across the pool, the updated loan balance of $321.3M sits against $277.8M of property value — the debt is roughly 16% larger than the houses are worth. That is not incidental. It is the structural reason these loans reach HUD at all: a reverse mortgage is assigned once the balance hits 98% of the maximum claim amount, and it keeps accruing from there.
Pricing varies by state, and not by a little
Every loan in this sale was bid individually, so the state spread reflects real underwriting rather than pool composition.
Winning bid as a percentage of broker price opinion. Selected states; pool average 69.4%.
The pattern is legible once you know what drives it. New York and New Jersey price at the bottom — both are judicial foreclosure states where taking possession can run years, and every month of that is carry cost the bidder has already priced in. Iowa and Delaware sit lower still. Arizona and Connecticut, at the top, are cheaper and faster to work through.
Florida clears at 67.3%, below the pool average, despite being the largest state in the sale at 130 loans. Judicial foreclosure again.
What that spread is actually measuring: the cost of time. Roughly thirteen points separate Arizona from Iowa on identical asset types. That gap is foreclosure timeline, redemption periods, and how hard it is to clear title on an unsettled estate in that jurisdiction — converted into a price.
Who bought, and at what
| Winning bidder | Loans | Bid | % of BPO |
|---|---|---|---|
| GITSIT Solutions | 309 | $41.7M | 66% |
| CFS15 Grantor Trust | 200 | $39.1M | 73% |
| AAMG FC Properties | 84 | $15.7M | 67% |
| LLACG Community Investment Fund | 73 | $13.4M | 73% |
| Carrington Mortgage Services | 58 | $11.4M | 68% |
| RCAF Loan Acquisition | 55 | $9.8M | 68% |
| LB-Flat Series VI Trust | 49 | $12.9M | 77% |
| Beltway Capital | 37 | $9.0M | 69% |
GITSIT took 29% of the sale on its own and bid below the pool average at 66% of BPO — scale buying discipline rather than paying up for volume. At the other end, Firelight Capital paid 78% and LB-Flat 77%, both on small, concentrated positions.
The outlier is WFL Homes at 18% of BPO across fifteen loans. A bid that far below everyone else usually means the collateral is close to worthless — condemned, tax-encumbered, or in a market with no exit — and the buyer is pricing the paper rather than the house.
Bidders concentrate geographically
Most winners were not buying nationally. Carrington took only Florida and Maryland. Phalanx Capital bought Puerto Rico exclusively. Fairworth 365 took Maryland and DC. Buzz Buys was 69% Florida. Even GITSIT, buying across 41 states, put 17% of its balance in Maryland alone.
What this means if you are pricing distressed residential
- Roughly 70% of BPO is the institutional clearing level for vacant, deceased-borrower, unsettled-estate paper bought in bulk with full diligence.
- Judicial foreclosure states trade five to ten points cheaper. If a seller is comparing offers across states and expecting one price, that is why they differ.
- Ask which balance a percentage refers to. The same bid is 131%, 60% or 69% depending on the denominator, and the first of those is meaningless.
- BPO is not an appraisal. HUD's own glossary is explicit about that — it is a licensed professional's estimate from sales trends and comparables, on properties frequently unavailable to enter.
Related: why nonprofits now win half of every HUD loan sale — the 50% priority reservation, the federal grants behind it, and what it means for private buyers.
We buy what comes out the other side
Every loan in this sale ends as a house that somebody has to sell. Investor Trustee Services buys single-family assets from HVLS and HNVLS purchasers as principal — pool tails, occupied assets, clouded title priced in rather than excluded. We also buy directly from heirs before the note ever reaches an auction.
Peter Quinones · peter@investortrusteeservices.com
All figures from the FHA Office of Asset Sales HUD-Held Vacant Loan Sale 2026-1 Sale Results Summary, sale date 9 December 2025, transaction specialist Falcon Capital Advisors LLC. Bidder-level dollar figures above are winning bid amounts derived by applying each bidder's reported bid percentage of BPO to their reported BPO value, and are rounded. Loan counts reflect loans offered; actual loans delivered at settlement may be fewer where a loan loses HVLS qualifying status. Investor Trustee Services is not affiliated with, endorsed by, approved by, or acting on behalf of HUD or FHA. Nothing here is investment advice or a valuation of any asset.
Related: how HUD’s HVLS and HNVLS programme works · who buys distressed property portfolios
Also in this series
- 4,200 vacant houses just went up for sale at once
- ITS founder joins NAHR as a Charter Member
- What the ROAD to Housing Act actually says
- The 350-home line now runs through HUD’s loan sales
- Who bought HVLS 2026-1 — and what the bidding tells you
- The shift to nonprofits in HUD distressed loan sales
- HUD distressed property sales, explained
- Who buys distressed property portfolios?