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High-Performance Boat Financing Still "Extremely Limited"

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Old 04-05-2011, 09:01 PM
  #21
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Originally Posted by TexomaPowerboater View Post
Exactly my point. Lots of businesses had to close down as a direct result of dried up lending, that includes boat businesses. Its obvious the bailouts didn't work.

I don't think its irresponsible to buy a new boat with a loan anymore than it is to buy a new car. They both lose their value the minute they are driven away. Gap insurance covers the difference in case of a loss. The irresponsible lending blame lies in homeownership.
Big difference between primary transportation and a toy. Lots of businesses depended on two things, the Middle Class, or, people pretending to be rich. Both of those groups lost out.

Boats are secondary, and always a luxury item. People will ditch them faster than a car or a house, and they did. The real aholes left their boats and their cars.

The irresponsible lending was everywhere, cars, boats, RV's, houses, home equities and cash outs.

You'd not even be on this board if not for the bailouts, and I doubt anyone would be. The banks didn't do what they were supposed to, that's for sure. But I can tell you this, money is being lent, and I'm looking at it as we speak. These low mortgage rates don;t come around every day.

Economics is a third language in this country.
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Old 04-05-2011, 09:09 PM
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As I understand it, the problem isn't necessarily that there aren't laws or that people don't get caught. I am not a lawyer, but at the very least I see a combination of grand theft—removing big-dollar engines from a boat that no longer belongs to you—and maybe even fraud. The problem is that the bank, more often than not, ends up with an asset missing key parts and, at best, has to go through the trouble and expense of not just recovering those assets (engines and drives) if they haven't been thrashed but getting them back in the boat in which they originally belonged.

Forget legality for a moment. Think like someone lending money. Think like a banker. If the "collateral" you're lending on—the boat itself—has a good chance of being devalued before you can repossess it if that becomes necessary, why would you even bother making the loan?
You are exactly right Matt. They actually want to lend money, they are just kind of scared of certain assets right now.

Removing big engines is not ok and if the bank perfects the liens correct it is fraud. On the other hand, it is hard to enforce. The same situation is happening with people ripping out fixtures from a house that is going in foreclosure. It is illegal, but hard to enforce.

The market is tight but not dead. I would encourage people to try some of their community lending institutions first. If you have a good relationship, it will help. If not, you are just someone that they don't know who walked in to finance an asset that they really don't understand.

Think like a banker, that is a good way to look at it. They want business, but they don't want to lose. Who does?
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Old 04-05-2011, 09:11 PM
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Days of sign a 20 yr note and drive off in your toy are gone (as they should be). I believe in keeping your credit spotless and having a relationship with a lender. I have financed two boats in the last year with relative ease. I had to document my current one. And had to have healthy down payments. While it can be frustrating you can't blame lenders that are not in the boat selling business.
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Old 04-05-2011, 09:46 PM
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Originally Posted by Matt Trulio View Post
As I understand it, the problem isn't necessarily that there aren't laws or that people don't get caught. I am not a lawyer, but at the very least I see a combination of grand theft—removing big-dollar engines from a boat that no longer belongs to you—and maybe even fraud. The problem is that the bank, more often than not, ends up with an asset missing key parts and, at best, has to go through the trouble and expense of not just recovering those assets (engines and drives) if they haven't been thrashed but getting them back in the boat in which they originally belonged.

Forget legality for a moment. Think like someone lending money. Think like a banker. If the "collateral" you're lending on—the boat itself—has a good chance of being devalued before you can repossess it if that becomes necessary, why would you even bother making the loan?
I asked a builder still in business and he says banks and credit unions do not always tie the drives and engines to the asset agree as stated by another post.

I found it laughable some of the interest rates I was quoted on my 36 cat when I asked about a possible loan. It was a joke.

If you want a regular boat, no problem, it is just the high performance market that has dried up.

A million dollar yacht, come on down, a 130 mph cat forget it without bring some vaseline.
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Old 04-05-2011, 09:52 PM
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Originally Posted by VtSteve View Post
You'd not even be on this board if not for the bailouts, and I doubt anyone would be. The banks didn't do what they were supposed to, that's for sure. But I can tell you this, money is being lent, and I'm looking at it as we speak. These low mortgage rates don;t come around every day.

Economics is a third language in this country.
LOL, lending has not changed one bit since the bailout. The government lied about the bailouts and your lieing to yourself if you think we wouldn't be around if it not for the government. The government caused this mess and they will continue to cause more of them until you pull your head out of your azz and realize what so many people have already learned, which is that "government is not the solution to our current problem, government is the problem." This lending mess isn't that much different than the savings and loan crisis of the 80's, which the government also pretended to fix only to repeat their ignorant mistakes 15 years later. The only people that benefited were the skum sucking bankers that by chance had political ties to the white house.

Economics is my first language, try me.
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Old 04-05-2011, 10:07 PM
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Originally Posted by TexomaPowerboater View Post
LOL, lending has not changed one bit since the bailout. The government lied about the bailouts and your lieing to yourself if you think we wouldn't be around if it not for the government. The government caused this mess and they will continue to cause more of them until you pull your head out of your azz and realize what so many people have already learned, which is that "government is not the solution to our current problem, government is the problem." This lending mess isn't that much different than the savings and loan crisis of the 80's, which the government also pretended to fix only to repeat their ignorant mistakes 15 years later. The only people that benefited were the skum sucking bankers that by chance had political ties to the white house.

Economics is my first language, try me.
I would have to disagree with you about lending not being available to business.

There was a time a year and a half when working lines were drying up and hard to renew. Expansion money and capital investment money was getting real tough, even with institutions you had a long term relationship with.

Now, money is out there and readily available if you are credit worthy. You can acquire a working line of capital if needed and there is even SBA money on the streets.

The funny thing about this type of lending is, it is available if you do not need it. If you truly need it, it's impossible to acquire just like it always has been.
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Old 04-05-2011, 10:58 PM
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Interesting read once again Matt!

From the other perspective/other side of the coin. Lenders are not working with the debtors at all, in some cases forcing the surrender of the vessel.

What do you do if you have a buyer, deal set but there is a 20K difference/ negative equity on the sale? If the boat goes away and the debtor continues to make the same payment to knock out the 20K everyone wins. Boat is gone, new buyer is thrilled and bank gets paid in full. If the debtor doesn't pay the bank is out the 20K, if the debtor pays in full the bank is paid in full. If the boat is gone to the new buyer, no storage/insurance/usage/maintenance costs so the chance of a paid in full loan is higher for sure.

I recently got jammed in a real estate deal for about -250K (my end), closing didn't happen in March. I reached out to the bank last year to try to get rid of the boat that was costing me money and wasn't getting much usage. I had a buyer and the spread was about 18K at the time. They wanted no part of it, so when my closing didn't happen last month I simply called and told them to come and get it since a re-organization was in my future to offset my -250K real estate time bomb. Took them two weeks to get it and I just got a letter today offering to return it if I send them the March/April payments in the next 20 days. I had a ton of fun with that boat for the 6 years I owned it but it isn't a priority right now. I suspect they will lose double the 18K spread that existed last October depending on how long it sits.

I put 20K down financed only the boat, I paid the sales tax/bought the trailer and extended warranty outright (not part of loan). Market fell apart on everything, loan was higher than current value so there isn't many options. I couldn't dump 18K into the sale to make it go so the bank got stuck. Banks will only end up with more cars/boats/RV's etc unless they can figure out alternative programs.
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Old 04-05-2011, 11:05 PM
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I'm about 30k upside down on my boat.But I signed my name on the contract so it will continue to be paid as agreed.My word means more to me than 30k which is probably why I have an 850 credit score.
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Old 04-05-2011, 11:15 PM
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I'm about 30k upside down on my boat.But I signed my name on the contract so it will continue to be paid as agreed.My word means more to me than 30k which is probably why I have an 850 credit score.
Yeah I'm with you on that but FL is one of the states that allows deficiency judgements on real estate. That is the ticking time bomb that allows them 5 years to sue you and 20 years to collect (plus 8% interest or whatever the court allows). I'm protecting myself from that, the boat was thrown in because no trustee would allow it anyway!

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Old 04-05-2011, 11:50 PM
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Bravo Expensive Date, I'd also wager you'd have no problem walking onto your bank tomorrow and after a 15 minute conversation have a check in hand for your next toy.

To each their own but I also have a problem with people expecting the bank to just suck it up and take the losses, it wasn't the banks that wanted the toys and bigger houses, yes they were reckless with lending guidelines, but it was us who signed on the line saying we could pay for what we wanted so IMHO we should follow through on our end not expect the bank to suck up our negative equity.
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