NPN Pricing and Thoughts

[Joshua Andrews]

First off I'd like to thank everyone on BP who has been providing valuable feedback to me over the last few months. I am in the early stages of building my note investing business, and thus have questions. I can think of no better place to use as a reference other than BP, so thank you to everyone who has contributed.

I'd like to get your thoughts on note pricing. Specifically non performing 2nd lien mortgages which are underwater. I'd first like to acknowledge that I'm aware there are many variables which determine pricing. As such I'm looking for basic estimates to give me some kind of benchmark when placing bids.

I am looking at scenarios which contain the following:

- 2nd lien mortgages which are non performing

- 1st mortgage is performing

- Primary residence

- CLTV is underwater, typically from 105% to 160%

- Loan has been delinquent for at least 2 years or more

- Non judicial foreclosure states only

I'm aware that we bid on UPB. That being said, I have seen bid recommendations for assets similar to the above with pricing ranging from 5% to 25% of UPB.

For you experienced note investors out there my question for is this. What range would you be offering or think is fair given an asset with these characteristics?

I appreciate the feedback!

Josh