%Yield & Risk - Posted by Charles - DFW
Posted by Charles - DFW on March 31, 1999 at 22:08:37:
Thanks for your response.
I called on an add selling performing 1st & 2nd lein notes. He faxed me a spreadsheet of the loans he was selling.
Most of them were 2nds, at 5% LTV with a CLTV of 90-95%, and 13-14% interest. Most were 180 payments, and 6-12 months old.
I asked him what kind of yield I should be expecting and he said he normally does a little more than 18%, but because these have seasoning, it should be a little less.
I really didn’t think 6-12months seasoning was that significant. Plus isn’t a 90-95% CLTV very risky, more risk than I should take. The credit rating of the borrowers was listed as A to A- with some Bs.