What is a non-performing note?

Free quote non-performing mortgage note

A performing note is one where the payments are made on time by the homeowner to the note holder.
The non-performing note is essentially a note that is in default and can no longer expect repayment against the original terms of the note.
Non-performing notes and non-performing loans are terms used interchangeably.

Investors buy non-performing notes because of the discounts that come with “buying distressed assets”.
In this case the principal in the investment is secure because the value of the collateral (the property) is so much more than the price paid for the non-performing note.

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