A Full Purchase note offer allows the seller/note holder of an existing cash flow instrument (seller carry-back loan, structured settlement, etc) to sell the entire remaining balance/remaining payments owed to said holder, to a third-party buyer for a lump sum of cash.
If a private asset holder decides to sell the entire loan that is considered a full purchase buy-out. The takes all of the risk out of the hands of the seller/holder and transfers said risk to the third-party investor.
The seller can completely walk away from the loan-servicing responsibilities, money in hand.
The asset seller will never receive the full amount owed to them if they elect a full purchase buy-out, due to the many risks associated with the servicing and maintenance of a mortgage note (or business note) such as: risks of non-payment, risks of declining property/collateral values and of course risks of foreclosure to name a few.
A buyer has to calculate, predict and off-set some of those risks when initially pricing a loan for acquisition. This is why borrower credit score, current property value (not sales price, equity in property (or down payment collected by holder at the origination of the loan) are so important.
In this economy, 4 out of every 10 private loans on the secondary mortgage market do in fact, go into foreclosure (for whatever reason). This is where the mortgage note discount comes into play. When opting for a full purchase option, the discount is always steeper than the discount associated with a partial purchase note offer due to greater risk for the note investor.