Valuing a note for sale

[Jess Hewitt]

I have a note that I would like to sell.  Help me arrive at a value.  Here are the details

Original Note:  $48,500, 8% interest, 30 years, secured by first lien on $70k property, typical note terms.

Date: 12/9/2009

Current Value:  $41,505

Payments:  $505.88/month includes $120/month escrow for insurance and property taxes, No payment missed, 3 payments late but not by more than 30 days.

Escrow:  -$800 now but payment will be increased for negative balance and increased taxes/insurance.

My guess is its worth $55,340 valued at 6%

[Bob Malecki]

Hi @Jess Hewitt using my present value calculator and assuming a remaining term of 256 months and P&I payment of $385.88, the price for a sale at a 6% return would be $55,649.65. I don't know of anyone who would pay more than the current UPB though.

Since you have a decent amount of remaining term, you could sell a partial of 120 months $34,757 at 8% and get the "tail" of the remaining P&I term which looks to be $14,647 of interest and $30,067 in principal. 

This way your total income would be approx $79,472 if you are willing to wait for that tail income when you get the loan reassigned to you in month 121.

Bob