01
Entire Note
One owner holds the full right to scheduled payments, subject to servicing, documents, and borrower performance.
module 03
Partials and front-end payments.
A partial note sale lets one investor buy a defined portion of the payment stream while the seller keeps a later portion. The structure can reduce the buyer's time horizon, but it also adds document and servicing complexity.
partial structure
The same note can support two interests.
The source deck frames a long note with 203 payments and a front-end sale of 120 payments. That leaves the seller with a retained back-end position.
02
Front-End Partial
A buyer receives a defined number of early payments, such as the next 60 or 120 monthly payments.
03
Back-End Interest
The seller keeps later payments after the partial is satisfied, which can align incentives if structured properly.
example math
Front-end value is about timing.
In the deck example, the front-end buyer pays for 120 payments rather than the whole 203-payment stream. The shorter horizon can make the investment smaller and easier to underwrite.
If the borrower prepays or defaults, the parties need the documents to explain who receives money, who controls decisions, and how the retained interest is protected.
review checklist
Partials need clean rules.
Payment Waterfall
Confirm exactly who gets each borrower payment and when the front-end buyer is fully satisfied.
Default And Payoff
Clarify how early payoff, missed payments, foreclosure, modification, or reinstatement will be handled.
Servicer Instructions
The servicer should have written instructions matching the partial agreement and reporting needs.
Document Review
Assignments, collateral documents, insurance, taxes, and lien priority still matter even in a shorter investment.