Servicing fees and actual returns

[Michael L.]

Hi all,

Still trying to wrap my head around the basics of note investing. It seems that to calculate actual returns, you need to of course factor in your acquisition costs,  but also the servicing costs. FCI charges $15 per month to service, and an additional $15 per month for escrow accounts.

So for low value notes, with payments of only around $100-200 per month, doesn't this servicing fee represent a large amount of the actual interest received, to the point that the long term actual APR on investment is quite low or zero?