High-Performance Boat Financing Still "Extremely Limited"
 

Still an uphill battle, http://speedonthewater.com/component...remely-limited.

V-hull's that run less than 100mph?? or did you mean over 100mph..

No Doubt Matt,
Just look at the auction boats on the market. Many do walk away. It is definitely bad for the guys who could make payments with 25 to 50 percent down.
Good Article.
Thanks

Still no problem with my credit union. Really pays off to have history with a particular branch and the manager if at all possible.

Will NEVER use Bank of America.

Less than 100 mph.

+1

If you are in the market or will be in the market for a performance boat make friends with a local credit before you shop. Ours also does on the spot approvals.

Another impediment to lending on go-fast boats? Historically speaking, they make poor collateral for financial institutions, thanks to unscrupulous owners who, when facing default, strip the boats of their engines—and sell them—prior to repossession.

Good read..

I know some will disagree but I prefer to use home equity.

Clear title, lower rates, tax deductable interest.

No kidding. if i could get the loan i would have a 39 top gun in the driveway.
My credit union would do it but it has to be a california registered boat, ( not to many Cigs on this coast) :(

Wait a minute. The feds said if we spent trillions bailing out banks it would fix all that...........

The bailouts were meant to return the financial institutions to solvency, and to free up liquidity so businesses could keep their doors open. I don't recall anyone ever saying that the bailouts were meant to clear the slate so we could return to the days of Wild Wild West lending.

The quote below seems to indicate pretty good reasons for the "Why", and even points to a specific problem unique to the target market.

So no, the bailouts were not intended to return us to irresponsible lending, or irresponsible borrowing.

Don't confuse him with facts. He's a Teabagger. Teabaggers only believe the lies they are told.

Yeah, crap, either side could just blame Bush or Obama for the problem of bailouts, and they'd both be happy and go their own way mumbling to themselves.

Is there a number percentage wise of how many loans went bad.I know there were a lot of boats floating around as repo's the last few years,but there are a lot that are being paid as agreed.

The problem seems to be people who strip their drives and engines out of their boats when the payments get tough. There needs to be a law enacted that allow this type of fraud to be handled as a crime and the people that do this should pay for it dearly. Until they tie the drives and engines to the HIN, apparently nothing stops this theft, which prevents a lot of people who need financing to not have access to it.

Oh christ almighty, the last thing we need is another law. The smart financing companies include the engines in the secured asset agreement.

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.

You mean like this one?

Obama: "My health care plan will NOT mandate individuals by health insurance"

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?

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.

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?

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.

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. :evilb::angry-smiley-038::angry-smiley-038::evilb:

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.

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.

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! :eek:

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.

Loan process began on Monday the 28th, I contacted Matt at Offshore Financial and explain to him I have 2004 Lavey Craft MCOB with a single 525 i want to purchase. Offshore Financial did my previous Power Quest too. 1st bank says NO performance boats, period. 2nd bank said ok, but @ 7 7/8% and 25% down, now I was really getting discourage when Matt hit the right bank, and the right terms for me. We had to do a lil smooshing on that it was a 'BOW RIDER". It's weird I thought that it would be a long hard boat search, but it wasn't. Sold my boat in two days and had a deposit on another in 4, not bad in today's mess. Good luck

Bravo to you! I've been paying out $2k a month for five years on a house I don't live in. The ex is refinancing now, and amazingly, got a 4.5% apr. That will free me up some cash each month, but also I get nailed on taxes without any exemptions or child credits.

I can't believe the number of people that walked away from house they bought, still can afford, but want out so they can get something cheaper at today's low prices. Imagine if the stock market worked like that since 1999. An enormous amount of the problem.

A story. I know two people that flipped houses in Florida, and told me I was nuts for not getting in on the gold rush. They left two houses for dead, which later molded up. After a lengthy foreclosure, they are now ranting and raving that they can't get a mortgage to buy some more at today's fire sale prices :eek:

I hope I can match your 850 score after this anchor of a house is off of me. I've never failed to repay a dime, and don't intend to start now.

VT,
I hear ya on the frustration of people WHO can afford to keep paying, but CHOOSE NOT to, and walk away!! I know of a couple in our hood, he's a airline pilot for SW and she's a flight attendant, no kids, obviously make decent money between the 2 of them. Well, they have a house on the same canal as 1 of our rentals, and a condo over on Cocoa Beach. They are upside down on both properties, and stopped paying the mortgages on both about 6 months ago. They are still living in the house..... Now I heard from a neighbor the other day, that they have found a new home that is going to be owner financed, (Idiot) and they are going to STRIP their present homes of everything they can!!!!!!!!!!:angry-smiley-038:
That is just wrong, and if I see this guy, I will tell him so! These people just chap my azz doing this....
Dean

There are deadbeats everywhere and there will continue to be so until we make harsh punishments for their actions. We let it happen.

The people that screw themselves and then think nothing of making it our problem, really chap my azz. And dont get me started on the a-holes that leverage the **** out of their homes and boats and then strip them of all the value (and profit from doing this), then tell the bank to come and get the dead carcass. We have them here among us... IMO time should be spent behind bars for doing this crap.

I explained to the bank how my 342 is a cruiser. I guess it is compared to a lot of the hardware out there:coolcowboy:

No need for a new law, the law already exisits. As part of the loan agreement the borrow is agreeing to make the payments but also agreeing to maintain the collateral as well. So when people sell off the engines and drives, they are STILL responsible for the deficiencies and they will be pursued for it.

Not sure who your bank was but there are several lenders that are making boat loan modifications and doing exactly what you stated above.

Another issue for lenders regarding cats:

Joe Blow buys a 46' Skater with twin 1350's for $700k. Gorgeous boat and Joe Blow has had 4 cats before with tons of experience. Joe Blow then decides he wants to enter the boat in his local boat club's kilo run for fun. Unfortunately something tragic happens while running the kilo and the boat is severely damaged or destroyed. Joe Blow calls his insurance company and his boat that was insured for $700k with the lender listed as additionally insured / lien holder, and finds out that since the boat was entered into a "race" his insurance is NULL & VOID (has happened many times before) since he was entered into a race or timed speed event (read the fine print on all insurance policies).

Now Joe Blow is screwed and so is the lender. The lender now has to rely on Joe Blow to pay them in full since the boat is damaged beyond repair or destroyed.

That problem does not exist when lending on yachts.

Banks have lost their ace on boats to be frank if somebody doesnt take care of it and its broke, it isnt worth jack. Plus boats depreiate so quickly. I dont blame them banks

Bank Fraud ?
 

Please correct me if I'm wrong,but isn't representing a high performance boat as a bow rider or a cruiser in order to circumvent a lender's guidelines a form of fraud ?