Loan-to-value (LTV) is the loan balance divided by the collateral's value. It measures how well-secured a credit is: a low LTV means a large equity cushion; an LTV above 100% means the loan exceeds the property's value — the loan is under-secured.
LTV largely determines how a non-performing loan prices: a well-secured (low-LTV) credit can price near balance, while an under-secured (high-LTV) credit prices toward collateral value less the cost to realize it.
The loan balance exceeds the property's value — the credit is under-secured, so a sale prices to the collateral rather than the balance.
It frames the recovery: low LTV supports a price near balance; high LTV moves the price toward collateral value.
From a recent appraisal or BPO and the property's income — see how buyers price a CRE loan.