Current Price for Performing Notes

[Alicia Prokos]

What prices are investors currently paying for a solid performing note with a decent loan to value, say 75% or so, for a house worth <$100k?  Is it 90+ cents on the dollar, or is it lower for collateral worth <$100k?  I am trying to understand what is the true range of prices for performing notes of various levels of risk, purchased off public exchanges.  Thanks

[Bob Malecki]

Performing notes are sold based on desired IRR as @Dennis Weber mentions. Typical pricing is 8-10% annualized return. So for example, a $100K note that has a 7% rate with 360 month term will have a monthly P&I payment of $665.30. Let's assume that there are 300 payments left on the term with an unpaid principal balance of $94,131.59

If you want to buy it at a 10% IRR, you would pay $73,214.42. If the seller had it priced for a 9% return your cost would be $79,278.23. Performing debt is generally sold based on a fixed yield.

Bob