Why sell a note for less than face value?
Just curious, it’s never made sense to me why someone who originated a loan for $100k for instance would sell it at a discount. If I spend $100k, then collect 12 payments (seasoning) and then sell it for $90k or so (something less than face value) a year later... I haven’t made money. So, other then being a “distressed” seller of a note and needing the cash right away, why would I sell a performing note for less than face value? The math doesn’t make sense. So what’s the flaw in my logic?